Common Reasons SaaS Applications Aren’t Being Optimized

Software as a Service (SaaS) is a method of software delivery and licensing in which software is accessed online via a subscription, rather than purchased and installed on individual computers. These web-based solutions make it convenient to perform business on any computer, tablet or smart phone. Applications can be as simple as Microsoft Excel (via Office 365) or they can be more complex to allow business lines to manage their data and business processes, securely. The software and servers are maintained by the vendor, which makes these applications attractive to business lines such as Human Resources, Finance and the IT folks that normally support these groups. However, if the software isn’t configured correctly during the initial implementation or maintained to keep up with frequent version updates then you aren’t optimizing your SaaS and getting the best return on your investment. Following are common reasons why we see firms not optimizing their SaaS applications:

1. Over-purchased Functionality – Often, as part of the original software license negotiation process the client purchases more functionality than can reasonably be implemented in the time-frame budgeted. Sometimes functionality is rushed and rolled out just for the sake of putting it into play, whether it was designed correct or not. In other cases, functionality is shelved for later so that the core implementation can be rolled out to meet the project deadline and budget. Implementation projects are typically scheduled to complete in time for an old system to be replaced and/or just prior to the business having to enter their busy season. As a result, any functionality not completed usually gets placed on the back-burner and in some cases it never gets implemented.
2. No Maintenance Program – The SaaS vendors change the software with each version upgrade, release schedules varying by vendor but some releases happen quarterly. As the software change, chances are so does your business. Each version release should be viewed as a mini-implementation project. Some changes are forced on all users whereas some are optional and they need to be configured in order to take advantage of them. If the business isn’t actively monitoring the functionality that is being released, reviewing it against their business needs and activating the optional enhancements, then the software isn’t being maximized.

Helpful Things to Know About SaaS Applications

• Usually software license fees begin when the contract is signed, not when the software is implemented in production. There is a negative return on investment until the system is implemented and being used. A delayed or extended implementation continues to eat into the return on investment.
• These applications are typically highly configurable, they are not custom. The application is designed to work for the masses so in some cases functionality doesn’t work as desired. Fully understand your business needs and match them to the system functionality to ensure it will work for you before you purchase it.
• The software is maintained by the vendor, however new functionality and changes to existing functionality are released on a scheduled basis. Some functionality is forced on all users whereas some functionality is made available through additional configuration. Make sure you have the resources who know your business and the technology being used.

Recommendations to Optimize Your SaaS

• If you are negotiating a contract with a SaaS vendor, consult with an experienced implementer to confirm the reasonableness of implementing the modules being purchased. A high-level discussion of your requirements can help determine if a module will work for your firm. Also, be careful of biting off more than you can chew. Don’t purchase modules that you can’t implement in the near term as you don’t want to pay recurring license fees on software that won’t be used. An experienced implementer can guide you on the core functionality that needs to be implemented at first and what functionality can be implemented later. In most cases it’s best to work with the core functionality first to help you understand it better, before venturing into new features.
• If you haven’t been maintaining the software version releases, develop a plan and assign the proper resources who know the business and the software. If you don’t have an internal resource who can be assigned to this, there are several vendors who offer this service. However, the best practice is to assign someone internal to your organization who knows your business.
• If you haven’t reviewed the system functionality in 12 months, consider hiring a vendor to perform a gap analysis and/or operational assessment to review your current business needs compared to the current system functionality and best practices.

To learn more about FinServ Consulting’s services, please contact us at info@www.finservconsulting.com or (646) 603-3799.