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SaaS usage scenario: contract negotiations and RFP processes

January 3, 2012

Do you know what one of the biggest concerns is when you consider outsourcing your own IT department? It is the question where to store the documents outside the reach of the IT people you want to outsource. You might argue that accessing data unauthorized is against the law and the contract but let’s face it, people in fear of their job would not be stopped.

Another scenario but also very risky is data security during contract negotiations, let’s assume for an M&A project. You do spend a lot of time to secure your internal data integrity. But the moment you communicate with the outside world all your security is gone. You send contract drafts to lawyers and the other party. You have lost complete control whether the data is being sent to a private consumer email address from there on. Heck the recipient could even be on a consumer email system without you knowing and there goes your high level of security.

In the old days of outsourcing (not only IT outsourcing) whenever there was a transfer of assets but especially a transfer of employees (TUPE, §613a, etc.) there was tight control over the data. To assess the data of the assets or the employees you had to enter a room where there were printouts of the data and where not allowed to take any information away. Nowadays with digital information this has changed. Information is being sent around, copied, worked on, etc.

Imagine you are in charge of an RFP process. You have several bidders that need information. You get questions from these bidders. You have to organize meetings. You have to provide a method of receiving information from the bidders. Even if you have organized yourself let’s say with the help of Microsoft SharePoint internally (which is a huge step already) you still struggle with the external parties. Sending out documents or receiving these per email may just fail due to document sizes. You are not sure whether your email is received and read. You are forced to communicate through “old means”.

Does any of the problem statements above sound familiar to you? You might want to consider a SaaS solution to break out of the misery. Let me explain how.

Think of a place in heaven  in the cloud where you have a safe document repository, a way to communicate (email, message board, IM) and full control which individual has access to what content. You would not have to wait for your internal IT to argue, purchase HW and license, set it up and make an internal system to you which then would not be available from the outside. Your investment is limited as you purchase the place in the cloud for a limited time only and you would pay per user.

This is what cloud collaboration solutions like Office 365 from Microsoft or Google Apps, to name the two biggest, can deliver. You’ll get an enclosed environment where you can give access to internal team members as well as external support staff and even bidders. You can create separations so that shared content is available to all but also have drawers of information only available to a limited group. The integration of email and instant messaging gives you save means of communication without involving your own IT department or information leaving the controlled environment. You avoid that anybody misses important information by having this one stop shop and through the built-in integration of mobile platforms even reach people on the road.

Not only do you limit the direct operational cost compared to setting this up through your own IT department if they would be able to do so at all. You also increase the productivity of the teams involved internally and externally. This usually results in better and faster negotiations but surly in less miscommunications. On top of that you are reducing the risk. Which risk you ask? Actually you reduce several risk types.

  • The risk of exposure of confidential information towards media
  • The risk of exposure of confidential information to internal audiences
  • The risk of data getting lost or being hacked on accounts (e.g. consumer mail) outside of your control
  • The risk of missing to notice important information which might result in delayed timelines as well as economical disadvantages.
  • The risk of not giving all bidding parties identical information and therefore one or more parties an unfair advantage which might result in legal action against you.

You might wonder why this status quo today in negotiations is not getting data privacy officers on the barricades, why legal departments do not intervene or why the CIO has not addressed these business risk through IT yet. Let me ask slightly provokingly, is it due to:

  • Lack of alternatives
  • Lack of risk awareness
  • Involved individuals being from a generation rather wanting to stick to “that’s how we have always done it!”
  • A wrong perception about the cost involved

It cannot be one thing for sure. It is not the external parties not playing along. In my experience there are already so many terms around the whole process of bidding and negotiations enforced that the usage of a cloud communication platform would rather be welcomed then damned. Actually I do believe there is an additional reason. Nobody ever thought about using the cloud in this way!

The whole cloud discussion gravitates around technology. The appliance of cloud services to solve real life business challenges is an approach and skill set barely used. If we want the cloud to succeed as a success this is what is needed. I do have a row of simple but eye-opening scenarios for SaaS and I continuously think about ways how cloud could support real life challenges. Join me in that quest. If you have ideas or want to learn about mine reach out.

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