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ChaPter 3 • ProjeCt management 63

There is a downside to the use of COTS software. Because it is not meant to be fully cus-
tomizable, the theatre company lost its ability to change the software to include key features in
its donor database that users relied on. COTS software may also include errors that could expose
an organization to liability issues.
There are other disadvantages to consider with the purchase of COTS software, including
the fact that packages are programmed rather than being focused on human users working in a
business. Additionally, users must live with whatever features exist in the software, whether they
are appropriate or not. A disadvantage that grows out of this is the limited customizability of
most packaged software. Other disadvantages to purchasing COTS software include the neces-
sity of investigating the financial stability of the software vendor and the diminished sense of
ownership and commitment that is inevitable when the software is considered a product rather
than a process.
To achieve some perspective on systems being developed, you should recognize that over
half of all projects are built from scratch (two-thirds using traditional methods like SDLC and
prototyping and one-third using agile or object-oriented technologies). Most of these are devel-
oped using an internal systems analysis team. Programmers may be in-house or outsourced.
Fewer than half of all projects are developed from existing applications or components. The
great majority are modified, some extensively. Less than 5 percent of software is off-the-shelf
software that requires no modifications at all.

Using the Services of a SaaS Provider
Organizations may realize some benefits from taking an entirely different approach to procuring
software: outsourcing some of the organization’s software needs to a SaaS provider that special-
izes in IT applications.
There are specific benefits to outsourcing applications to a SaaS provider. For example,
organizations that want to retain their strategic focus and do what they’re best at may want to
outsource the production of information systems applications. Additionally, outsourcing soft-
ware needs means that the organization doing the outsourcing may be able to sidestep the need to
hire, train, and retain a large IT staff. This can result in significant savings. When an organization
uses SaaS, there is little or no expenditure of valuable employee time on nonessential IT tasks;
these are handled professionally by SaaS.
Hiring a SaaS provider should not be considered a magic formula for addressing software
requirements. Some drawbacks to the use of SaaS must be seriously considered. One disadvan-
tage is a general loss of control over corporate data, information systems, IT employees, and
even processing and project schedules. Some companies believe that the heart of their business
is their information, so even the thought of relinquishing control over it is distressing. Another
disadvantage is concern over the financial viability of any SaaS that is chosen. There might
also be concerns about the security of the organization’s data and records, along with concern
about confidentiality of data and client privacy. Finally, when choosing a SaaS provider, there
is a potential loss of strategic corporate advantage that might have been gained through the
company’s deployment of its own innovative applications created by its employees.

Evaluation of Vendor Support for Software and SaaS
Whether you purchase a COTS package or contract for SaaS from a provider, you will be dealing
with vendors who may have their own best interests at heart. You must be willing to evaluate
software with users and not be unduly influenced by vendors’ sales pitches. Specifically, there
are six main categories on which to grade software, as shown in Figure 3.9: performance effec-
tiveness, performance efficiency, ease of use, flexibility, quality of documentation, and manu-
facturer support.
Evaluate packaged software based on a demonstration with test data from the business
considering it and an examination of accompanying documentation. Vendors’ descriptions
alone will not suffice. Vendors typically certify that software is working, but they do not guar-
antee that it will be error-free in every instance, that it will not crash when users take incorrect
actions, or that it will be compatible with all other software the organization is currently run-
ning. Obviously, they will not guarantee their packaged software if it is used in conjunction
with faulty hardware.