Impact of SaaS on Consulting Engagements: A Customer View

The jury has voted: SaaS is here to stay. I believe that’s a good thing. I’ve been involved in the movement to move enterprise software “off premise” from the early days of the technology, and I am a diehard advocate. Not only does SaaS deliver the obvious benefits – no hardware procurement and deployment, no need to deal with upgrades, rapid deployment, capital efficiency, etc – but the model is much more customer-centric than the traditional enterprise software business. If the value falls off or isn’t delivered, you simply switch…which makes the provider put a much higher emphasis on taking care of the customer.

And for the Professional Services side of things, the change to our profession from this new approach to delivering enterprise software (sorry Marc it’s still software) has been striking. Now that we can deliver services remotely, our consultants don’t have to live on airplanes and hotels, we have more flexibility in managing our resources, we can reduce implementation costs (which makes the product easier to sell), and the list goes on. To reinforce the point there have been five PS Pulse articles about SaaS and Services since my last article, and the impact of SaaS on Professional Services has been thoroughly discussed. What more can be said?

Well, I have a different view, one from the customer side of the equation. For those of you who don’t know me, let me explain that I have spent the better part of my adult life delivering enterprise software as a programmer, IT executive, founder of an implementation-focused consultancy, VP Services and management consultant. I have been around and involved in all sides of the business of enterprise software. For the past five years I have been advising and assisting companies in the never-ending quest to improve performance, and all of these customers have utilized SaaS. As I have mentioned above, I’m a convert…no, make that advocate…of SaaS. But, while some things have gotten better thanks to SaaS, many are the same or are more challenging than before. And these are the things that offer lessons and opportunities to PS leaders.

Why do companies embark on system projects? The answer is simple: to make their businesses more efficient or to sell more products or services. That’s it, nothing more and nothing less. Sounds easy. But as we are all aware, the execution of this quest is difficult at best, and fraught with some pretty common challenges: expectation management, executive commitment, adoption, cost, complexity and budget overruns, to name a few. Let’s discuss two key challenges and the impact that SaaS has on them:

Challenge: Expectation Management

Otherwise known as the “Sunday buffet” of features. What starts off as a simple “We need to improve forecasting” becomes a 27-stage sales process. How does SaaS improve this situation for the customer? The early SaaS applications acted a great tool for holding down feature creep because they had very limited customization capabilities. Today, however, the SaaS products have phenomenally easy development and customization capabilities leading to the danger of returning to the days of out of control customizations and feature explosion.

Opportunity:

       This puts a huge premium on your consultants’ ability to manage scope. It also lends itself perfectly to Agile-like development methodologies that use time-boxed iterations in the place of waterfall-like methodologies, with fixed time frame deliverable-oriented Statements or Work. Regular iterations and feature releases will also lead to development momentum, that will lead to deeper ongoing relationships and ultimately more revenue per customer over time.       

Challenge: Adoption

Nothing changes here with SaaS. In fact, adoption remains a thorny problem. But now adoption is also a thorny problem for the software provider, simply because they can lose a customer if the system is not used. I could make the case that the adoption problem (which could also be called the “I’ve always done it this way, why do I have to change?”) is actually more difficult with a SaaS solution, for two reasons: (1) the ease and speed of implementation make it easier to skip past the hard thinking that needs to be done around change management, and (2) the high degree of remote work coupled with the increased implementation speed is not conducive to gaining a deep understanding of the business situation, nor is it conducive to relationship building between the consultants and the customer.

Opportunity:

Here again, it’s time to rethink how we do our work and why we do some things. Every implementation that I have been involved with over the past few years has included a very high remote consultant component, with a trend toward functional and business consultants routinely conducting requirements and design sessions remotely. And in every one of these situations there was distress on the customer side of things that was never picked up on by the consultants. And in most of these situations, once the implementation was completed the services team did very little follow-on work.

I have two recommendations for PS Leaders:

(1) Force more face time in your methodology, especially during design, and (2) Adopt a more Agile approach (see “Expectation Management”) and blur the line between “go live” and “post-implementation support.” Speed is great, but impact is more important. In order to have impact you need adoption – and that requires effort. The best way to make that happen is to continue to deliver value while building the “trusted advisor” relationship. This requires time and effort but will result in a better product, a more committed customer and enhanced revenue for the provider.

I could add a couple more sacred cows of Professional Services delivery that should be re-examined in the light of the new SaaS world to my list, but I’ll leave that for another day.