SaaS Cloud Transformation: Culture

“Culture Eats Strategy for Breakfast” - Peter Drucker

The adage from Peter Drucker is so true for any company embarking on the cloud transformation journey. Even if you have a strong strategy, sharing a unified culture with your team members is essential to successfully implement your strategy.

?As a result of a shift in the buying patterns, almost every enterprise software company is on?the?cloud migration journey towards offering?Software?As?A?Service?(SaaS). It is not a choice, but a matter of survival. Before taking any arduous task such as climbing a peak or preparing for a marathon, we train our body and mind. SaaS cloud transformation is no different. The?journey is an extremely big shift in the overall strategic?direction?and?requires the organization to brace with challenges along the way.?

Multiple aspects have to be considered before taking the SaaS Cloud transformation journey. It should always begin with a cultural shift of the people’s mindset in the company towards a cloud-first approach.

Executive Management

Personally, for me, it starts with the executive management’s strong conviction and sponsorship in the cloud-native or cloud-first approach. There are multiple reasons such as agility, availability, elasticity, better operations, & growth potential for embarking?towards SaaS offering, but costs should not be one of the primary ones. Cloud infrastructure hosting costs, no matter what the hyper-scalers make you believe, are not going to be cheap. If not managed with some guard rails, organizations will end up with a huge bill for the monitoring and hosting costs.

SaaS cloud transformation should be treated as a growth strategy for the companies. The executive management should be completely aligned to the growth story of the SaaS business and not be too concerned with the challenging operating margins.

Business Model

Ultimately, the primary reason for any business is to create value for its shareholders and hence the business models of SaaS should lead to sustainable growth and profitability over a period of time. In this aspect, the SaaS business model is completely different from the traditional enterprise software. Unlike traditional marketing, Digital Marketing plays a big role in the acquisition of the customer in the SaaS world. The SaaS sales cycles are usually very short, mostly self-serviced with multiple payment options, and the offerings start at a low price point. To cater to a wide range of customers from individual consumers to SME to Enterprise, SaaS offerings should be metered and have multiple usage-based tiers from Freemium to Enterprise. The tiers have to be thought through to gradually transition the customers across the tiers to increase the revenue potential. These new business models also mean that a change in the Sales commissions as the revenue is usage-based and not upfront.

Preparing teams

Once the overall company strategy with a proper business model is aligned to embrace the challenges of the SaaS, it is very important to prepare the teams?for?cloud-native development. A good forward-thinking cloud-based engineer is more than just a?good?coder.?As it?is very important to train various development teams within the organization on cloud fundamentals,?you need to?upskill your development team. They need to understand the CICD, cloud hyper-scaler capabilities, deployment models, tools,?and technologies related to the cloud infrastructure.?

All hyper-scalers offer extremely good foundational courses at discounted prices. In some cases, you may also consider hiring talent from outside who have experience in?the transformation. Lifting and shifting existing products in the cloud could get you quick wins but using cloud-native technologies will always be more beneficial in the long run. It is also important to build a?process-driven and collaborative culture, which?will help in bridging the handovers across the R&D, DevOps,?CloudOps, and?Support teams.?

SaaS Companies?also?need to be extra cautious with the?ever-increasing?hacking of businesses?for sensitive data. A culture of being aware of security aspects and zero tolerance to any security issues?are very important. Developers should be aware of building?secure?software and?SecureDevOps?principles should be?a?part of the development practices.?

Extreme Ownership

A 360-degree view of customers' usage patterns across all teams within the organization is one of the recipes for a successful SaaS offering. Further, for a reliable SaaS offering, a culture of imbibing the Site Reliability Engineering (SRE) philosophy along with?an?obsession?for?customer success, operational and engineering rigor is a must. It should be a part of the change management doctrine from the beginning of the transformation journey and not an afterthought. The SRE culture will help to build an extreme sense of ownership within the teams, enabling faster rollouts of products?and?capabilities, improve efficiency, build good collaborative practices,?which will lead?to customer delight.?

These are not the only challenges an organization goes through in the SaaS cloud transformation journey. Feel free to share your views about the cultural transformation challenges you faced in your organization.