Software as a Service (SaaS) has a compelling value proposition: one code base, available to everyone, hosted and supported remotely. But a decision to migrate to it shouldn’t be rooted in the technology alone—governance and adoption are the deciding factors.
Here are five areas you need to consider when planning a SaaS migration.
#1 Cloud brokerage
As SaaS portfolios grow, IT leaders become cloud brokers, focusing less on operational support and more on vendor management.
When CIOs embrace a cloud broker role, they spend less time arbitrating standoffs between IT finance (“Do more with less”) and infrastructure and operations (“There is no ‘less’ here”) and more time providing capabilities (helpdesk, procurement, and contract management skills) that make SaaS successful. Technical questions around capacity planning are nullified—the SaaS vendor takes care of that side of the house—and are replaced by a focus on business outcomes (e.g., Are there enough Microsoft Office365 Enterprise E5 licenses to support field sales?).
CIOs should embrace the cloud broker role to align SaaS to business outcomes.
»Related content: Embracing a hybrid IT mindset
#2 Shadow IT
SaaS is an enabler of shadow IT. Low oversight and pay-as-you-go billing empower business units (BUs) to provision their own IT solutions. For as long as corporate IT has been disparaged as ‘The Department of No’, shadow IT has existed to try and go around it.
The sheer variety of SaaS solutions (and the simplicity of signing up for free trials) is a nightmare to track and build a strategy around. A marketing organization wants to craft and manage its messaging on social (Sprinklr), tweak digital advertising content based on performance (RevJet) and get real-time insights into social posts (Blurrt): three SaaS applications to deliver three different outcomes.
There is a consumer-driven assumption that SaaS will sync with corporate IT. An end user doesn’t care about on-premises or hybrid solutions (go on, try it—see how quickly their eyes glaze over) but they do care about web traffic slowing to a crawl when corporate IT requires internet access via a virtual private network.
And, by the way, we can use single-sign on too, right?
Shadow IT amplifies connectivity issues between SaaS and corporate IT systems. Corporate IT uses request for proposal standards to iron out governance issues, but shadow IT spend isn’t pushed through the same stage-gate.
The office of the CIO is accountable for syncing SaaS with existing IT systems but shadow IT hides the true size of this accountability—until things don’t work. And then they need it right now. Or yesterday, preferably.
Accountability without total responsibility.
Welcome to the world of SaaS for CIOs.
CIOs are expected to provide connectivity between SaaS and corporate IT systems.
»Related content: Mapping cloud costs to a standard IT cost model
#3 SaaS governance
SaaS needs the same oversight as an on-premises application portfolio. There are several roles that typically manage SaaS relationships (Chief Information Security Officer, vendor managers, application owners), but it’s the CIO’s responsibility to align SaaS to the governance and service levels in place for the existing IT portfolio.
CIOs should apply the same governance to SaaS as on-premises IT solutions.
»Related content: Demystifying cloud costs
#4 SaaS creep
The SaaS pricing model of land (basic functionality) and expand (premium functionality and expanded use case support) impacts what you adopt today and what will be on a vendors’ sales roadmap tomorrow.
SaaS vendors are happy to go undetected by IT departments—less oversight means an accelerated sales cycle. But an IT vendor manager provides a more holistic view of SaaS than a business stakeholder with a corporate credit card and an immediate problem to solve. As more SaaS solutions are rolled out in an enterprise, there has to be a SaaS strategy to maximize negotiating leverage and rationalize duplicate capabilities. Individual BUs do not have that line-of-sight. Only the office of the CIO has the remit to validate that SaaS procurement is aligned to business goals—and isn’t a hodgepodge of randomness.
CIOs need a strategy to maximize SaaS negotiating leverage and rationalize redundant capabilities.
»Related content: Right-size your SaaS optimize cost and utilization
When application customization is a prerequisite, SaaS is problematic.
Customization is often more of a perceived issue rather than an actual one. Anyone who has worked in software professional services knows that customers push for customizations to support edge cases. Often these same edge cases can be achieved out-of-the-box, but sometimes they can’t. In either event, there has to be an evaluation of actual (rather than perceived) customization requirements before migration.
Standardization is a forcing function to improve existing processes. Email, teleconferencing, payroll, instant messaging: no-one really cares about these systems, but over time customizations creep into them. A SaaS migration imposes a clean slate and a standardized process. Salesforce standardization of the sales pipeline has been so successful that customers align to it rather than push for their customizations. Customers accept the standardizations because the out-of-the-box functionality is so compelling.
Ultimately, all SaaS solutions can be customized—particularly if there are enough zeros in the annual contract value for the vendor to justify the engineering investment. Customization drives product improvements—nothing validates a use case like a happy customer—but it’s not an action you should hang a migration plan on.
CIOs should leverage SaaS as part of their IT portfolio when they understand required customizations.
To learn more about leveraging the cloud to capitalize on opportunities, download the executive brief Embracing a Hybrid IT Mindset.