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August 1, 2007

SaaS CRM Implementations Are Different
From time to time I meet with large and small systems integrators and related professional services firms. Whether we are jointly working on a client project or discussing business partner programs, it generally doesn’t take long for me to understand their experience in implementing SaaS ISV solutions. I’m going to use this blog post to clearly state that implementing SaaS business systems is different than implementing on-premise software systems and point out some of the differences.

First, let me start with what’s not so different between SaaS and on premise systems. SaaS business system implementations may be complex and require deep subject matter knowledge. “Plug and play” SaaS CRM or ERP implementations are generally a myth, at best limited to very small engagements and at worst set very inaccurate expectations. With that said, let me highlight a few fundamental changes associated with SaaS business system implementations:

A change in infrastructure planning assumptions. SaaS Services firms get that the Web is the new delivery platform and that a virtual delivery from the cloud will exceed any organization’s internal platform in terms of innovation, reliability, reach, evolution and value – and frame their implementation planning and vision around this reality.
Multiple phased projects. I rarely see big bang projects which were somewhat common place in the host-based processing and client/server eras. SaaS implementations generally leverage pilots, prototypes, proof of concepts, micro projects and multiple phased implementations in order to maintain an iterative process, close client involvement, achieve a more tailored system and show constant successes along the way.
More rapid project timeframes. As hardware and software installation are bypassed, there is real opportunity to speed up SaaS implementations and accelerate go-live dates as well as time to value. With visual prototyping tools and online sandbox environments (from Aplicor and other ISVs), iterative configuration prototypes can be experimented with in real-time.
Clients are more participative during the implementation than with on-premise solutions. They can design, view, test and influence throughout the implementation lifecycle. This approach of involving users early and often is a powerful change from the prior CRM and ERP era which I believe will ultimately decrease the number of failed implementations and significantly increase business systems value.
SaaS eliminates unnecessary time and money spent on low level technical infrastructure and increases the ability of IT to work alongside the business users to rapidly deliver value.
The IT leadership role often advances from a technical configuration management and maintenance planning perspective to a business objectives facing supervisory and oversight role. This really means less setup and maintenance and more prototyping, measurement and pursuit toward objectives. As you can imagen this is generally a very welcome change for most CIO’s and IT Directors who use this time savings to facilitate higher value added activities in areas such as business processes, workflow automation and goals achievements - and who ultimately move their IT organization closer to the point of business results achievement.
Web 2.0 and social media tools can have a synergistic effect with SaaS CRM systems. While services firms vary on their Web 2.0 strategies, they all get it. Some are in planning while others are implementing and delivering Web 2.0 client projects.

SaaS professional services engagements are getting larger over time. As SaaS deployments grow from departments to enterprises, software functionality constantly increases and administration/customization/integration tool sets (e.g. Forms Designer, Menu Designer, Workflow Designer, etc.) advance to enable greater automation and flexibility so to will professional services scope, delivery and value.

From the ISV perspective, organizations such as Aplicor are focusing hiring on business savvy consultants with deep industry domain knowledge who can quickly understand, assess and recommend business process and workflow automation changes which will produce the most material benefits for any given client.

Here’s something that may surprise you (or possibly not) – the largest global system integrators such as Accenture, IBM, CapGemini, BearingPoint, Deloitte, AnswerThink, etc. are not at all on board with SaaS. I started my career in this world and came to understand both their vested interests (of which they are still financially tied to on-premise CRM and ERP providers) and their cautious advancement. Although some make some occasional noise with regard to SaaS, make no mistake, they are not yet on board. However, just like Microsoft and SAP who admonished SaaS solutions as long as they could, these large system integrators will also come on board in due time. However, also like Microsoft and SAP, I suspect their SaaS evolution will begin as both a hedge and a defensive tactic before eventually truly embracing this new business model. This delay however presents significant business development opportunity for more nimble and more forward thinking system integrators, professional services organizations or specialty firms. It’s a chance to get in on the ground floor, while barriers to entry are relatively small, and provide significant client value which may steadily advance a line of business or entire services company.

SaaS is the most significant disruption to the business systems industry in a generation. The business opportunity stemming from this disruptive nature is clearly extended to professional services firms who embrace, leverage and lead this undeniable market movement.

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Posted by Chuck Schaeffer on July 16, 2007 in CRM Strategy
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