While SaaS is a flexible option that can be implemented much more quickly than traditional enterprise technologies, it also presents new challenges.
SaaS has the potential to fundamentally change how a business operates. There are therefore several important steps a company should take to prepare for the move.
1. Create a Cloud-Ready Organization
SaaS can provide the tools to transform how people work together. But to fully recognize the benefits, the organization needs to align with the new cloud-based model. This requires a collaborative approach that cuts through organizational boundaries.
For example, in a non-cloud environment, a sales rep looking for help to answer a customer’s technical question might directly email a colleague in engineering, hoping for a response within a few days.
But for enterprises that use SaaS applications, such as Salesforce.com and its collaboration tool Chatter, the rep’s standard process for answering a technical question might change. They could do a quick search of all Chatter posts to see if the question had already been answered. If it hasn’t been answered, they could post the question so it would immediately be visible to everyone in the company with the skillset to address it.
To take advantage of these new capabilities, people in different parts of the organization must learn to work together. Readying an organization for the shift from controlling and protecting information to facilitating the free flow of information is an important part of planning.
2. Redefine the Roles of IT and the Business
With SaaS, the business side of the enterprise has more direct control and responsibility for decisions about its systems and data. It can adapt its systems and processes to changes in the marketplace without having to go through the IT department.
SaaS therefore offers IT departments the ability to take on a more strategic role, with an increased focus on strategic technology issues and less focus on routine activities such as bug fixes, software upgrades and system maintenance.
It is important to assess how prepared the IT function is to relinquish control over routine system activities and to focus on using information and technology as a strategic driver. This typically will affect IT’s skills and staffing models, and suggests a realignment of business and IT leader incentives around these desired results.
However, for SaaS to be accepted into the enterprise, both the business and IT must understand and embrace their new roles.
3. Strengthen IT Governance
In the past, many organizations have coasted by with lax IT governance because their systems and data were largely contained within their own walls.
As IT assets shift to the cloud, weaknesses in governance can become a major source of risk. With SaaS, some IT assets are controlled by a third party and no longer reside within the real or perceived safety of a company’s systems.
Under this new model, strong governance is needed to help ensure the company’s security and privacy standards are maintained. This includes clear policies and procedures about user access and data quality, formal audit trails to support regulatory compliance, and robust controls to verify that the right things are being done—and to identify hidden issues before they become problems. Is there a governance plan that is consistently applied across the enterprise and how might it need to be strengthened?
4. Design a Cloud-Ready IT Architecture
Over time many businesses become trapped in a rat’s nest of redundant systems, data silos, point solutions, hard-wired interfaces and human middleware. SaaS can help solve this problem, but it may require some serious untangling to get there.
The key is to rationalize IT systems and assets into logical units that are highly cohesive (i.e. all revolving around the same business activity, instead of having related functionality scattered across unrelated systems) and loosely coupled (i.e. not hardwired into unrelated systems).
Having an IT architecture with these two critical attributes makes it much easier to carve out a specific business capability and move it into the cloud. This is a huge undertaking for many enterprises and does not have to be performed for every functional area at once. However, for most enterprises it is an important precursor to global standardization and SaaS adoption.
5. Define Criteria for Deciding Which Activities to Migrate
Define explicit criteria for deciding which capabilities are the best candidates for migration to the cloud first.
Questions to consider include:
- How mature are the existing SaaS applications for that business area, and do their capabilities align with the specific needs of your business?
- Are your existing systems and data in that area ready to migrate, or are they still a tangled mess?
- Which parts of your company have the strongest business case in terms of strategic impact and ROI, and are they hungry for improvement or likely to drag their feet?
Moreover, it is important that business and IT leaders agree on a common set of selection criteria for SaaS migration.
6. Develop a Cloud Strategy and Roadmap
The move to SaaS generally occurs in phases, so it’s essential to have a clear strategy and roadmap based on the defined selection criteria. One major factor to consider is an organization’s overall stance toward cloud adoption.
Some organizations take an aggressive position, moving to the cloud wherever they can, as quickly as they can, even if their existing systems are adequate. These organizations believe the benefits of flexibility, improved user experience and reduced IT effort outweigh the adoption costs.
Others are taking a more reactive position, considering cloud whenever a pressing need arises for a new system but not actively looking to replace systems that are currently sufficient.
Regardless of the approach, a SaaS adoption strategy includes guiding principles that reflect the organization’s overall stance toward cloud, a roadmap that specifies the order and timing of SaaS moves (as well as the required organizational, IT and governance changes), and specific plans for managing an agile transition.
7. Establish an Integration Plan
Integrating a SaaS solution with existing systems can be one of the most complex, costly and time-consuming aspects of cloud adoption. It is not uncommon for the integration effort to take significantly longer than deployment of the core SaaS solution itself – especially if the organization’s existing IT architecture remains tangled.
Internal politics can also be a major stumbling block, with various system owners vying to be the master source of data for the new solution.
Organizations going this route will need a formal integration plan that clearly spells out how, and to what extent, the SaaS solution will be integrated with existing systems, as well as which systems will be the master source of data. Moreover, it is essential to confirm that all system owners have bought into the plan.
Content courtesy (in part) of Deloitte, with special thanks to Paul Clemmons, Jason Geller and Adam Messer