Several years ago, the only way to obtain an enterprise 
application was through a long, arduous and expensive system implementation of on-premise software -- and oftentimes, after all the hard work, the project would still quietly be considered a failure.
Times -- and, more importantly, technologies -- have changed. Complex, on-premise implementations still exist, to be sure, but companies now have alternative options, thanks to Software as a Service, or SaaS.
Vendors in almost every tech category have moved into this delivery mode, either to provide an additional option for clients or to incorporate pre-existing systems in a hybrid strategy. Many vendors, of course, are pure-play providers, and have been since the beginning.
While the business case for SaaS is a compelling one -- cheaper; easier to implement; automatic and more frequent application upgrades -- it is by no means a foregone conclusion that it's best in every case.
Yes, SaaS has been part of the software landscape for several years now, but as new vendors enter the market after SaaS-ing yet another application -- or even, more granularly, another function -- companies are having to start the evaluation process from scratch. For those firms, and for the companies that are completely new to the SaaS environment, the following best practices could come in handy.
Perform a Needs Assessment
Boston Corporate Finance uses SaaS in its back office operations for customer relationship management, database management and security functions, Brad Adams, an analyst with the investment banking firm, tells CRM Buyer.
At face value, it would seem that much of this functionality should be largely commoditized by now -- that is, CRM or security features should be the same from suite to suite. However, that is not the case in either on-premise or SaaS environments.
While most firms know to conduct a needs assessment before an expensive on-premise implementation, they might be tempted to skip the process for a SaaS application that is seemingly easy to turn on and off.
"When we were deciding what to implement, we didn't want to make a hasty decision and get something that wouldn't map to how we work," Adams said. So, the company worked through all the ways that the application would be used. For example, several of its employees travel by train in areas where connections are spotty. They need a CRM app with strong briefcase and synch capabilities, and Boston Corporate considered those criteria when seeking a vendor.
Survey the Landscape
Salesforce.com (NYSE: CRM) 
. RightNow (Nasdaq: RNOW) . NetSuite . Oracle Siebel On Demand (Nasdaq: ORCL) . For those following the SaaS CRM space, these are the first names -- and oftentimes the last -- to come to mind when compiling a list of potential vendors. "I don't think I have even seen a deal lately where Salesforce.com wasn't on the short list," Sheryl Kingstone, an analyst with the Yankee Group, tells CRM Buyer.
In many cases, Salesforce.com -- especially since the advent of its AppExchange -- is the right answer. However, companies would be doing themselves a disservice if they didn't keep abreast of new entrants into the market -- and, particularly, new areas of functionality being provided over the Internet.
In the CRM space alone, there are more than 150 on-demand CRM providers, according to figures from Tier1 Research. It can be difficult to rate the functionality -- especially when most on-demand vendors begin with only a handful of clients. However, consider this: In 1999, so legend goes, Salesforce.com landed its first customer, which signed up 10 seats.
Consider the Complexity
As on-demand technology becomes ever more complex, it is easy for implementing companies to get a little too enthusiastic mapping out complex systems they would like to see implemented in-house.
Even a seemingly standalone application implementation -- such as on-demand security -- can be unexpectedly complex, Compuware Covisint's David Miller, chief security officer, tells CRM Buyer.
In some cases, firms actually have to delve into highly technical details -- even though one of SaaS' selling points is that such matters can be left to the vendors. Consider on-demand security, which Covisint has begun to offer. "Customers don't always understand the issues involved, or how many resources are necessary to solve the challenges," Miller said.
Then there are those companies that are completely embracing SaaS throughout the enterprise, using it to support more complex CRM processes. Examples might include real time integration of a SaaS application into an enterprise's back-end or cross-departmental processes.
For such firms, projections that Gartner (NYSE: IT) released last year may be particularly dismal: Through 2010, 75 percent of complex CRM SaaS deployments will fail to meet enterprise expectations.
"SaaS is a great option, but some of the implementations a few leading companies are attempting may be too much for the applications -- at least at this point," Kingstone said. 
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