At recent SaaStr Annual 2016, Zach Nelson (CEO of NetSuite) made a very interesting point about Enterprise Customers.

As NetSuite started targeting enterprise-level customers, they encountered very different information technology ecosystem. When they were tartgeting small and medium sized customers earlier, Netsuite would often manage implementation project by themselves, along with end-to-end Service contract. For big-scale enterprise customers, Netsuite had to navigate myriad IT structure involving existing Software vendors (SAP or Oracle) , SI (System Integration)/AO (Application Outsourcing) partners  as well as variety of cloud hosting services.  Eventually, Netsuite rolled out separate division to target Enterprise customers, since entire business model was different from the one successfully used for small/mid-sized customers.

That brings us to the point of – How Enterprise level customers should approach any SaaS product implementation.

Here are some pointers for Enterprise Customers who are planning to go ahead with Big-scale SaaS Implementations.

  1. Basic principle of due diligence in software selection does not change much. Though, you should expect lot of involvement as well as flexibility from SaaS product vendor. You might have missed the same from existing enterprise vendors (SAP or Oracle) which are used to pushing products via dedicated SalesReps. It would be welcome change for you.
  2. Software FIT is very important since additional customization/development to suit your requirement is often minimal and costly. In most cases, it is not even possible if its not on SaaS product roadmap.
  3. Core purpose of any software product is to  improve existing business processes, even though software delivery mechanism in this case is different (Cloud-based). That does not free you up from other tasks such as business process re-engineering or managing organizational change or training end-users. You can still expect to spend same (in some case higher) effort in this domain.
  4. While lot of standardization as well as minimal configuration might make give impression for faster implementation , do not expect much reduction in effort for requirement gathering/fit gap analysis or user testing. Typically, these activities are covered either by SI Implementation Partners or customers themselves. So, while SaaS vendor might push you for aggressive timelines, you should hold guard and take reasonable view of it.
  5. Never under-estimate on integration/data management effort. In most cases, SaaS product vendors claim to be responsible to specific business process, onus of integration/data will typically fall on customers.
  6. Consider increased effort (especially from IT Division) on coordination across different parties  – SaaS Product Vendor, SI Implementation Partner, Hosting company. It is also important to understand (and outline upfront) how responsibilities are segregated across these parties.
  7. Skills – SaaS product implementation skills are scarce (thus not cheap). So, expect staffing crunch for SI Implementation Partner or even SaaS Product vendor. Would also be important to get upfront commitment on key resources (or even work out staff augmentation model). Expect to pay higher bill rates if you wish to on-board skilled resources. If you are still anchored to old price points due to existing rate cards, it makes sense to revisit these agreements to include separate digital skills.

All the best for your SaaS Journey.

By the way, you can check Zach’s interview here.