21 Oct 2019

SaaS isn't the answer to transformation

Businesses all over the world are failing on digital transformation, however Australian organisations seem to be struggling more than others after placing second bottom in the most recent ‘Digital Maturity Index’.

According to research done by McKinsey, 70% of all digital transformations fail and Gartner say that just 8% of Australian enterprises are getting results from their digital transformation activities. There’s lots of reason as to why this is the case, but there’s one key problem that seems to be at the root of many of them: businesses have been throwing technology at the problem and buying the next new SaaS platform will not provide you with transformative results no matter how much the advert for it says that it will.

I’ve spoken before about the need for organisations to focus on service transformation, rather than digital transformation, and I believe that many of the problems that businesses are having with digital transformation are as a result of the almost myopic view that technology is the answer. Instead of starting with a technology set that will simply digitise the analogue or, worse still, just move what you have to the cloud, you need to think about the core issues that you’re looking to fix and what you want your end-state (and service) to be.

Your organisation is large and complex, with unique ways of operating, skill-sets and technologies; and only through the lens of your organisation’s own circumstances and goals can you work to find solutions that will deliver the outcomes that you want.

SaaS is not the answer to transformation

Software-as-a-Service (SaaS) technologies are often talked about as being shortcuts to transformation and an easy way for organisations to future-proof their business models.

Despite its rapid growth and adoption (SaaS spending in Australia grew 24% between 2018 and 2019, to $3.3 billion), given the results discussed above, it’s clearly not the answer otherwise so many transformation projects wouldn’t be failing. SaaS platforms often claim to provide evolution out-of-the-box, but as anyone who has ever been involved with implementing a CRM system will tell you: it takes a huge amount of work and personalisation to simply make one fit-for-purpose.

What’s necessary is for us to think about the complete journey that our users or customers are going through, the many touch-points (and systems) that they’ll come in contact with in the process, how data needs to be shared across them, as well as how we will need to alter internal processes to drive improvement and adoption. Only through getting this picture and then redesigning it to achieve the desired outcome can you hope to go out and select the right technologies that will enable you to achieve it – not before.

Organisations that have invested heavily in SaaS platforms to deliver service change and who aren’t getting the results they wanted need to reassess their efforts, and fast.

Not only are transformation projects failing and not delivering a return, but the approaches that are being taking are meaning that it’ll be harder (and more expensive) to unpick and come back. This is because skill-sets and abilities are being lost, critical functionality is beginning to reside outside of organisations, and that bringing our employees along on the journey due to past failures is becoming ever-harder.

There are also some questions that need to be asked of SaaS models more generally, specifically:

  1. Cost & dependence. SaaS platforms OPEX models may have made expensive software affordable for all, but the sheer number of them that now exist in every department across our businesses means that spend in this area is growing and only getting larger. Can your business afford this into the future?
  2. Data compliance, sovereignty, and security. Do you know where your data sits? What legislation applies to it? How it’s being protected? 
  3. Back-up and DR. What would your organisation do if one of your SaaS platform providers went bankrupt or suffered a disruptive cyber attack? Would you have a single image of all the data that sits across your business at any one time? The likelihood is no and that’s a big risk for your organisation.

The good thing is that there is an answer to this problem and the wider service transformation piece, and that’s to move to hybrid working environments.

What are hybrid environments?

Simply, it’s about adopting an approach to buying (and running) technology that enables you to put together complete, integrated solutions that aren’t wholly reliant on a single platform or methodology for delivering it (i.e. SaaS).

Integration is key to all IT environments, so a hybrid approach means that you can host and use applications that exist in the public cloud, private cloud, or on-premise, and then adopt networking approaches that can link it all together in a way that delivers brilliant performance.

Why are hybrid environments a superior solution when it comes to service transformation?

It’s not that all SaaS is bad – some of it does things brilliantly – it’s just that a hybrid approach that utilises SaaS for some parts of customer service and leaves open the option for other technologies is invariably best across the board.

Hybrid means choice and it is the only approach that can deliver service transformation because:

  1. It enables you to create integrated technology platforms that can support the holistic change that you want and personalise it to your business.
  2. You can pick technologies that meets your needs, not big house technology providers’.
  3. When changing technologies you don’t have to throw everything out and start again – this saves cost and time, but also makes user adoption easier (a big failure point in transformation projects).  
  4. You can pace change to suit you and your projects.
  5. It’s scalable without always increasing cost, opens-up CAPEX models, and doesn’t leave you reliant on single technologies or ever-growing OPEX expenses.
  6. Doesn’t tie you to one technology providers’ technologies and development programmes.

If I’m not listening to technology providers, where should I be getting advice?

It’s important to seek-out local expertise and partnerships from independent experts. This is because:

  1. They can get an understanding of your complete business, your desired outcomes, and have knowledge of what all the available solutions are, so that they can plan a successful service transformation project that meets your needs.
  2. Service transformation needs a whole-of-business ICT approach because it involves the total rethink of you operations – only a team with a wider range of skills is capable of doing this.
  3. This won’t be a short project, you need to work with a team who are available close by because only through incremental change can you avoid organisation-shock and project failure.

Using a single ICT provider guarantees that the systems put together have been done so with an eye to the whole, that you can manage them efficiently both during and after the transformation project, drive user adoption, and that, should a problem arise nor or further down the line, there’s an unparalleled level of responsibility to get things right, fast.

The way ahead

SaaS or cloud doesn’t mean better, neither is it often the cheapest, best performing , or secure solution.

Adopting hybrid infrastructures that can support your service transformation is always going to be superior and will future-proof your organisation and new developments in the field  of networking (Hybrid Networks) are facilitating this approach. Before moving anything to the SaaS or the cloud, ask:

  1. Is this platform being sold to me as a complete solution?
  2. Is there another way to buy the software?
  3. Where is my data going to be hosted?
  4. How is my data going to be backed up – could I do this myself?

No longer is a one technology project, like a SaaS platform, the answer to ‘digitally transforming.’ The end goal needs to be service transformation – a whole of business approach that fundamentally improves the customer experience.

Ask yourself what it is that you need from technology now and how you can avoid becoming too closely tied to a single solution in case your needs change, often the answer will be different to the one you expect.

Top