With its benefits of flexibility, cost efficiencies, and rapid scalability, it’s no wonder that many organisations are turning to software-as-a-service, or SaaS, to answer their technology needs.
SaaS allows organisations to outsource their software requirements off-site and access them when they need them, via a web-based interface. Used for anything from accounting software to content management systems, SaaS is typically accessed on a subscription basis. Small surprise then that the mass adoption of SaaS has meant a sea-change for the way software is consumed, worldwide.
For procurement professionals, SaaS has numerous benefits: not least the ability to access software resources on an as-needed basis, but - like all changes - it comes with its own set of challenges.
This post outlines eight best-practice procedures for making sure your organisation's migration to SaaS runs like clockwork.
Get internal buy-in early
Entering into a SaaS agreement is a big step, and one that will only work if the solution works well for all your end users. Pave the way for successful adoption by consulting with your end users upfront, gathering your user requirements and involving them in the decision-making process as much as possible. (See our earlier post around how to gather user requirements)
Be aware of Total Cost Of Ownership (TCO)
Like most new models, it can be easy to miss some of the peripheral costs associated with a move to SaaS - and the flexible nature of SaaS can make cost estimation even harder. You can increase your likelihood of having all the costs covered by identifying upfront the many factors that can influence the cost of running SaaS applications. Just some of these influential factors include compute capacity, network traffic, storage and number of users. Incorporating these factors into your planning gives you a much better idea of your TCO from the outset.
Scrutinise your Service Level Agreement
Service level agreements are more important than ever in a SaaS-driven world. They guarantee the level of performance, availability, and security that your SaaS vendor will provide, and outline a plan of action (or compensation) in the event that your provider fails to meet these guarantees. Ensure you have watertight SLAs in place so that you are covered for all eventualities.
Be prepared for a different pricing model
Moving to SaaS means moving from the typical fixed-price contracting model to a more flexible on-demand,or pay-as-you-go model. No wonder SaaS can be a challenge for procurement! Make sure you’re taking advantage of the flexibility that SaaS offers, by seeing monthly usage reports and opting for a plan that allows you to respond to fluctuating market price. Tools such as AWS’s Simple Monthly Calculator are a great way of working out usage.
Tighten up internal governance
The on-demand nature of SaaS can spell a bit of a procurement free-for all in many organisations, while internal politics and individual preferences can make it difficult to manage service provider engagements. Make sure all end-users have clear guidelines around who has procurement responsibility for SaaS: this clear, consistent governance will be your ally in ensuring your organisation gets maximum returns from your new SaaS arrangement.
Consolidate your assets
If you are sourcing different services from a single provider, explore whether you can integrate them all into one contract. Not only will this make your SaaS provisioning simpler to manage, it will create clearer accountability and increase your negotiating power.
Budget for training and testing
One of the draw cards of SaaS is that it is easier to implement than new on-premise software: but you still need to allow adequate time and budget for thorough testing and training, particularly if you’re integrating with other systems. Sure, your new system might be simple to use: but only if your staff are trained to make the best use of it. Training is also a great opportunity to manage the transition to the new software, lay down some ground rules and get internal buy-in and adoption.
Embrace the future
At the end of the day, SaaS has opened up a whole world of opportunity for technology procurement. It offers procurement professionals the flexibility to continuously take advantage of the very latest best-in-class technology, while increasing visibility into consumption and spend, lowering total cost of ownership and operating cost. It might feel like a minefield now, but it’s well worth it in the long run.