Don't be burnt by SAAS
Dave Jones MCIPS
Procurement leader with extensive experience in several sectors | Head of / director | Brings collaboration, improvement and pace
Having worked in procurement for a while now and specialising in technology procurement, I have had the pleasure of seeing my fair share of deal cycles. This includes, at a guess, leading or overseeing over 1,000 deals in my time (scary thought!).
The pressure will undoubtedly mount to conclude a deal. Driven both from the supplier perspective to secure the revenue and from your own business to start enjoying the benefits from the investment you are about to make.
It is sometimes the case that there is pressure to overlook or underestimate the following areas and rush to start implementing.
Thousands of customers have integrated our solution - it is proven and really easy
You may be told during demos that thousands of customers have integrated the software into hundreds of legacy environments with no issue. Whilst it will of course be true that lots of customers will have integrated the product it is critical to spend time diving into this in more detail :
....Questions to ask
>How does the data model facilitate different business units use of the same data in different ways to meet their own business objectives. Several business units will need to use the same data but will be using it in different ways to facilitate their individual needs. What experience does the provider have of a process to reach consensus and come up with an aligned data model? Who will do the field level mapping between your existing and new system?
The system is so easy to use. Your users will not need training.
Undoubtedly business IT solutions have come a long way in the last five years. Users are expecting the same kind of experience from a systems perspective that they have at home. Users will still need some form of training alongside communication and PR around the new system and process.
....Questions to ask
>Speak to other customers who have installed the solution. How did they ensure the solution was adopted in their organisations? What is the culture in your organisation? Do people tend to follow new processes with minimal fuss or do you need to invest in a network of change agents
Updates to the solution are delivered all the time. They are fully tested so you can accept them without concern
One of the main benefits of SAAS is undoubtedly the constant stream of updates without the historical internal IT overhead of upgrading and testing your on premise solution. Whilst the cost will be lower there will still be an cost and you also need to consider implications on other solutions in your estate
….Questions to ask
>How often are updates provided? How long do customers have to test an update before it is rolled out? Can I see some of the release notes for previous releases? What training materials are provided for new features and functionality?
Beware of the long term commercials and consider the exit
Your organisation will potentially be investing a significant amount integrating the new SAAS solution into your organisation. The longer you use the new solution the more locked in you will become to that product. Protecting yourself commercially is critical as well as having an exit strategy.
....Questions to ask
>What happens to pricing after the initial term? Will new features be integrated into the core product or be a future upsell? How will you exit the solution in the future? Are your suppliers, customers, group companies etc. all licenced to use the product?
Service levels
Unless you ask this will often be overlooked or not included in your contract. It is critical that a discussion on service levels take place so you understand the suppliers model as if you moving from on prem to SAAS there are key differences.
....Questions to ask
>What is the uptime of your solution over the past 12 months? What were the last 3 outages? How quickly will you respond to our issues / feature requests? What is your process for prioritising feature requests into your future roadmap?
Conclusions
SAAS has undoubtedly revolutionised IT and allows businesses to benefit from the economies of scale it brings plus faster access to new features and arguably quicker business case returns.
I am a big supporter of these solutions and also the vast array of startups who have entered the market since this technology came to the forefront.
I have only touched on the considerations in this article. I would love to crowd source more tips from the Linked In community. I will issue a new article in a few weeks with a selection of your comments and will also name check you.
Global Head of Indirect Procurement for Charlotte Tilbury Beauty
4 年Great article and loved the example questions. Thank you so much for sharing, looking forward to the next article!
We provide Companies, Not-for-profit organisations and partnerships Independent Carbon Consulting Services to support Climate Change Management to Net- Zero. Report, Reduce Transition
4 年Dave well you touched a nerve, your comments echo my own thoughts. As an intelligent layman rather than a technology expert, the supporting claims have always smacked of being too slick and a long way from real world experience. I look forward to reading your summary article.
Oalia, Smart Procurement - Rejoignez-nous !!
4 年Thanks for this great article Dave. This is actually a topic that I discuss regularly, with my customers, partners and prospects. As I have been on both sides of the mirror, selecting SAP and ARIBA s a Procurement Director in the early 2000, and selling now a pure SaaS Solution as a vendor, I can see that the rules of the game have not completely followed this evolution. Some of the guidelines you are giving here are really fit for purpose, and should be largely adopted in my view. Happy to discuss it if you want.
The only pay-as-you-go strategic sourcing tool, averaging 70x ROI in just 6 weeks
4 年Excellent article Dave Jones, great to learn about your experience of buying SaaS. I thought I'd offer a few thoughts as a co-founder of a SaaS company, as well as a hands-on Procurement professional: 1. Get the SaaS tool into the hands of your user community as early in the decision cycle as possible. So many SaaS vendors claim that the tool "is easy to set up, easy to use, requires no training..." and their skilled sales teams make it seem so, but I would so put that to the test immediately. All SaaS tools should have some kind of Sandbox environment, if not freemium and free trials on a truly self-service basis. Only the truly complex, archaic SaaS providers won't be able to offer some hands-on experience, and they can be quickly eliminated. 2. Clue is in the name, Software as a Service. The Service part should be scrutinised as if you were investing in Management Consulting services. Ultimately the effective change management, knowledge transfer, ongoing advisory, customer success etc. should be delivered alongside the standard licence fee. Be wary of SaaS providers that are just "techies", unless its a true commodity purchase like a stand-alone CRM tool, but instead invest in those that demonstrate a rich pedigree of expertise in your particular function, be it Procurement, Marketing, HR or whatever. Researching the top management is worthwhile as part of that, to give you the steer on what kind of company it is. 3. Do your online research. Many SaaS companies are written about on the web, whether on independent review sites like Capterra or G2, or on public forums like Google and Facebook, or on private blogs. Obviously be wary of the "independence" of certain sites, as many are sponsored, but you can get a good feel of whether a SaaS provider is "going places" by what is written about them on the web, or vice versa. It's easy to factor in a scored section on your RFP to cover off this research piece. Ultimately, it's what we do at home when screening a product or service, so it should be done more at work rather than relying on supplier-fed responses. Gone on a bit, so I'll stop there!
Commercial Leadership | Service Transformation | Procurement Specialist | Coaching | People & Planet Focus
4 年Some good points here Dave Jones. I think the 'out of the box' sell / buy from the customer is a huge risk, invariably its not true or not what you really need once customers put the time in to the detail of their requirements and ultimately costs spiral and or/timings slip. Change management is also critical especially making sure this isn't the first thing to get crossed of the project budget when costs get scrutinised.