SaaS’s dirty little secret

Gartner research by Christian Hestermann titled SaaS ERP Only Reduces Part of the Effort Needed to Implement and Operate Your ERP spells out what many of us involved in SaaS implementations have known for a long time.

Just because the application (ERP, CRM or other line of business app) is cloud or SaaS doesn’t mean that it can be implemented in days.  As the report says “Do not believe the hype about the ease of implementing a SaaS ERP” and more importantly “Do not confuse the implementation with installing a system, and recognize that most implementation activities are not eliminated by using a SaaS solution.”

What will it take?

This is welcome research from one of the respected analysts but it is enough to stem the tide of hype coming from the ERP/CRM SaaS vendors? Is it going to require some high profile cloud implementation failures to make customers wary of the “It only takes  5 days to implement” bullshit?

But if you are a SaaS software vendor you need to sell seats quickly and in volume if you are going to be able to make the business model work. And that is going to drive a hard-nosed, pushy “just buy the software” sales technique. What is most disappointing is that the SaaS ERP / CRM vendors have reinvented how software is delivered and configured, and they could have also changed the way it is implemented by embracing a new, but proven approach. But they haven’t and have abdicated to the Systems Integrators (SI) who have replicated the old, broken approaches.

Dirty little secret

The losers here are the clients; unfulfilled promises, lost benefits, poor user adoption. The SaaS vendors also suffer; poor user adoption, high cost of support. So why is the internet not littered with SaaS implementation failures, like we used to hear about SAP, Oracle and Siebel?  Here are the Top10 (on premise) implementation failures.

The reason you don’t hear the stories is a dynamic of the SaaS business model.  SaaS software is paid for as it is consumed. No longer can the vendor dump millions of dollars of seats on a client and run. The annuity revenue depends on a good / successful implementation. The better the adoption, the greater the recurring revenue.

However, implementation projects are still significant pieces of work. That is why the major SIs are all SaaS implementation partners. As the Gartner research report points out, the only phase of the implementation that is quicker with SaaS is the software installation/configuration.  The other phases such as Requirements Capture, Business Design and User Training are still required and still take the same time.

The reason why you will not find any failed cloud implementations, is that after the SI has finished the project, the SaaS vendor’s Customer Success team takes over. They often have to go in to patch up the client’s implementation to make it really work. In some cases they will completely rework the entire project at no cost to the client. That is HOW important it is to get a great implementation.

SaaS implementations do not take 5 days. SaaS implementations are not 100% successful. SaaS has a dirty little secret.

Aligned incentives

The client wants a great implementation – business benefits from software.  The SaaS vendor wants a great implementation – annuity revenue stream and low support costs.  The only party who is not that bothered is the SI as they get paid whatever the result. Maybe that is harsh, but they don’t care enough to really change the way they deliver, especially as it is new, different and that feels risky.

Isn’t it ironic: those who peddle change, are least happy changing.

But there is a different approach – process-driven – that is proven to deliver an implementation that has fewer configuration errors, quicker end user on-boarding and higher adoption, and also lower support costs.

A different approach

1. The SaaS vendor develops a hierarchical process map that describes the generic end to end process for the standard configuration of their app. Let’s call the map, “QuickStart”. The QuickStart map goes down a couple of levels and has links from process steps to the related screen in their app and other supporting materials (training, config, hints & tips).
2. The SaaS vendor uses the QuickStart map to demonstrate their app in the sales cycle.
3. SaaS vendor wins the deal and makes a copy of the QuickStart map available to the client and SI for the project.
4. In live workshops, the client and SI change the QuickStart map to reflect the differences in the client processes, which helps define the app customizations that are required.
5. The updated QuickStart map is used for User Acceptance Testing of the customizations and for training.
6. It is also used as the way to train, guide, support new users as they come on board. This helps massively with adoption.
7. If the client needs support, then they can give the SaaS vendor Customer Success team access to the map, so that they can quickly understand how and why the app was customized.
8. Finally it is the basis for future improvements or implementing new releases of the app.

Risky and costly?

For the SI it seems riskier as they need to start using a hierarchical mapping approach, rather than plastering the walls with Visio flowcharts or completing MSWord questionnaires.  But hey, it is not rocket science for highly paid SI consultants. And besides – it is 2016, not 1980.

So why have you not heard of it before?  Simple.  When we developed the approach back in 2004, we were a small process mapping software vendor based in the UK and our app was affordable by only the Fortune 500.  The majority of implementations were SAP, Siebel and Oracle. Salesforce was a great idea, but had limited traction in the Fortune 500. The big SIs had a limited incentive to change.  And STILL we had some great results. Below is one of many quotes that are in the public domain.

The new owners of Gatwick have invested in a program to transform financial efficiency through SAP.  The P2P Accelerator has given us a head-start on our end-to-end process capture, which has enabled us to deliver user acceptance, system configuration and business improvements significantly quicker.

Ian Dobson, SAP Program Director at London Gatwick Airport

But now, there are a huge number of enterprise SaaS apps being implemented in companies of every size. And now we have a new company and new process mapping app in the cloud. To deliver a process-driven implementation project, all you need is Elements Process Knowledge and Salesforce Player; both of which are free, for ever, for everyone.