May 26, 2016
Getting the Most from your SaaS InvestmentsShane Cough
So, the war between on-premise and cloud solutions is over and SaaS has won. Of course, right? Those last holdout “on-prem” CIOs are now in the very small minority, and you can almost picture them standing on the last server barely floating on a rough sea—holding the last ERP system upgrade on CD in their left hand, and a fist full of network cables in their right.
Companies like Amazon and Salesforce have transformed the IT function in ways that still have yet to be fully understood. Now, business users are buying software, running their businesses on platforms completely outsourced and even purchasing and implementing analytics tools. This is great, right? Well, mostly, yes.
BUT, there are functions that an IT practice brings to bear other than storage, organization and access to information. What about systems governance? What about prioritizing projects across competing departments? What about optimizing configuration and security for the future? Balancing the demands of different user groups accessing the same systems?
Let’s focus on Security for a minute. Do you have one systems administrator who owns your cloud-based system? Or do you have 40 people with systems admin rights who, at any given time, could delete all of your data, break all of your workflow rules or WORSE completely screw up your currency tables, messing up your forecasting numbers and bookings numbers without you even knowing it so that you are reporting the wrong numbers to your board for a full year before you realize it?
Yes, buying SaaS has transformed business operations—-particularly for the mid-market—in a positive way. Companies with 50 employees and $20 million in revenue now have access to sophisticated tools once reserved for the Fortune500. Meanwhile, that Fortune500 company can implement radical business changes in months or weeks for tens or hundreds of thousands of dollars when prior on-premise or hosted solutions meant years and millions.
Now, it’s time to take a good hard look at what is required to get the most out of investment in SaaS/PaaS applications upon which modern companies completely run their businesses. As software rose to prominence in the 1990s, so too did the expectation of paying annual maintenance fees of 20% of the license costs to cover upgrades, bugs, troubleshooting and support. Likewise, the SaaS buyer should expect to invest beyond the licenses to optimize their investment.
The following are areas in which we see dramatic under-investment:
- Governance: A CRM encompasses Marketing, Sales, Operations and Finance functions. Who is the systems admin, and which department do they role up to? What is the list of priorities? How does one department’s use of the system effect another’s? Who is negotiating the overall license arrangement with the vendor? What does the data health look like?
- Systems Administration: Is your sys admin employing best practices based upon general IT training and software-specific training, or is the sales ops guy or gal with the most tech experience just learning as he or she goes? How many users do you have per systems administrator? 50? 5,000?
- Strategic Consulting: Is anyone in your organization an operations and/or systems subject matter expert? Can you connect the dots between the very top-level strategic imperatives in your organization and the system(s) upon which you run the business?
- Systems-specific Expertise: Do you regularly seek the consult of a true expert in the system(s) your business depends upon?
- Knowledge Transfer: What happens when your system guru goes away?
- Code Auditing: Do you know the quality of work your internal or external developer is delivering? Have you had more than one over time? Can anyone give you a tour of the code, or are you going on an archeological dig each time you revisit?
There are typically four components to the modern, open and leading SaaS platforms:
- What comes out of the box
- What gets configured to fit your business operations requirements and company culture
- Custom code written specific for your business automation, unique processes and user experience requirements
- Plug-ins and Apps
A good SaaS vendor with an open ecosystem like Salesforce features a wealth of easily accessible information and support when it comes to the out of the box solution. But what about those parts unique to your business? Are you documenting it? Are you ensuring redundancy in internal knowledge? Do you have a consultancy you can trust to improve, maintain, change and support it?
Additionally, there are three keys to successful implementation and on-going employment of any system:
- Data Health: Is data hygiene a one time exercise, or are you regularly cleaning and maintaining the data? Have you minimized user error and inconsistencies in data entry by opting for pick lists over text fields wherever possible?
- Management Buy-In: Do senior managers depend upon information and insights gleaned from the system? If not, it won’t be around for long.
- User Adoption: Do end users feel that the system makes their lives easier? If not, they won’t use it.
All of these areas suffer when there is no one to weed the garden, remove dying and diseased plants, prune the healthy ones, and account for behavioral changes due to seasonality every quarter.
- Setting Appropriate Investment Expectations: Wait, I thought we bought SaaS to save money and that it works out of the box, and now you want more to make it work?
- Access to Resources: Even if you have budget to hire a developer for the open SaaS platform you are leveraging, good luck finding, competing for and retaining them.
- Right-sizing: You determine that you need ½ a developer, 2 hours a month of strategic consulting, 20 hours of configuration work and someone to be on call for user and security changes. How do you hire for that? Instead, you end up with one full time employee with limited systems admin experience and a smattering of coding or a series of contractors who do one-off projects.
So, what is the answer? How do you balance investing in an open, extensible and business-user-friendly platform with the need for security, governance and IT best practices? It starts with setting the right expectations for what that on-going support needs to look like:
- A single point of authority
- The right ratio of systems administrator-to-users
- A steering committee
- Functional bench depth
Easier said than done. Consider investing in the following areas:
- On-going training: Systems evolve, and people only retain so much information. Sending your users and admins to classes and investing in building a curriculum specific to your instance of a platform can boost productivity and user adoption profoundly.
- Retaining a consultancy: A partner with bench depth and various systems skills (strategic, configuration, development) can be a great way to augment your internal team with a solution that fits your budget.
- Regular strategic reviews: Taking the time to look at where you are as a business and how your systems support the top line strategic goals on a regular business can ensure that your evolving platform aligns with your company’s strategic trajectory.
There is no question that the war is over, and SaaS has won. What victory looks like will depend upon how the organizations now building their businesses on cloud-based platforms choose to protect, enhance and optimize those investments.