This article is inspired by a LinkedIn Learning course titled "Everything as a Service (XaaS) is the Future of Business" and does not serve as a representation of any organisation.
Being in a SaaS company for over a year and from my previous experience, I have come across many organisations wanting to explore different SaaS solutions in the name of Digital Transformation. Perhaps a few pointers can keep us on track for understanding what it means to set Digital Transformation in place.
Key Questions to Ask
- What do you understand about Digital Transformation?
- Why does your organisation need Digital Transformation?
- What are you really trying to solve with Digital Transformation?
Factors of Consideration when Procuring a XaaS
Quoting Jonathan Reichental, there are 3 main factors of consideration when it comes to selecting a XaaS solution. They are performance, cost and preference. Below, I am listing them in sequence of priority in my own opinion.
- Performance
From a vendor's perspective, this is where we as Solutions Consultants can put up a good show by delivering customised demonstrations of solutions to the best of our ability. During sessions where you get to see how the tool goes into action, this is the time that you can ask as many questions as you can think of. Many decision makers or IT procurement managers tend to sit in demonstrations with an 'open mind to explore' or in other words, not prepared with questions or a discerning mind to evaluate tools because they feel they are not ready to commit to anything. This is a huge pity because you would miss the opportunity to see how a solution can potentially make a difference to your organisation's Digital Transformation journey.
2. Cost
We all know good things don't come cheap. When every organisation works with a finite budget, cost becomes an important factor of consideration but is that really the most important factor? Understand your organisation's needs and goals, make a list of the negotiables and non-negotiables of the solutions and evaluate the providers based on the list. Sometimes, letting a provider know your interest level and eagerness in introducing its Solutions for a real business impact may bring you some surprise in helping you to balance between cost and performance. Never let cost be the first hurdle to eliminate vendors in your decision making process otherwise you will be missing out on a whole new world.
3. Preference
Like B-to-C businesses where individual consumers are the end-users, organisations are made up of decision makers/ users who are individuals as well. We understand there can be some bias towards a certain vendor due to various reasons such as the UI/UX, word-of-mouth or simply how the consultant presented during the demonstration. Being responsible managers of your organisation, rationalise your thoughts and feelings so that you won't miss out on good solutions.
Especially in the world of XaaS, vendors are capable of optimising features and experiences overnight. Your bad experience as a user two years ago can serve as a reference for your consideration but should not cause a direct, major impact to your evaluation process today. Sometimes, it could be a good thing that your understanding of the flaws allows you to further evaluate a vendor's commitment in constant improvements based on whether or not the vendor has already improved those areas since your last interaction. Any prior encounter or experience is better than nothing; the more you explore, the clearer you know what you are looking out for. If you see that Vendor A cannot provide XYZ, then you know what to ask Vendor B on the capabilities you hope to see.
Think Short Term or Long Term? Build Internal Expertise or Leverage External Resources?
- Think about how ready is your organisation in committing to a Digital Transformation solution
If the overall digital maturity of your organisation is not high, chances are that you would take a 'roll-out-and-see-how' approach. Along the way, you may start thinking about other alternative solutions or changing the approach. If this is the case then it is more of a 'short term trial and error' approach; hence signing with a vendor for instant solutions would make a lot of sense for you to be more agile in failing fast and running fast even though it can be slightly costlier in the long run. Building your own internal resources from scratch would cost you even much more time and money especially if you decide to turn the steering wheel halfway.
- To what extent should you be retooling your IT and Procurement teams
Does purchasing a new software solution fall under the scope of your IT team or the Procurement team? Would it make better sense to have a IT procurement unit in the Procurement team or to retool the IT team to shift their capabilities from 'daily operations' to 'vendor management'? I have come across companies getting their office IT team to take on the role of both managing new solutions vendors AND running the technical daily operations of those solutions.
It is always good to retool your employees to meet new business needs but how far should you go? Especially if it is a 'short term trial and error' approach where you need to test if a certain solution would best fit, do you really want to be spending time on training your employees to know the finer 'how-tos'? Perhaps a smarter way is to train your people to be good at 'knowing what' instead of 'knowing how'; that means, get them to be capable of seeing which tools fit together for the overall puzzle so that they can be up to speed to solve immediate business needs instead of juggling the nitty gritty steps of operating every single tool while missing the bigger picture. There is a reason why each solutions vendor has its own solutions experts, customer success and professional services teams.
- Keep in mind the ultimate goals and benefits you hope to gain
Most of the time, automation/ efficiency/ reducing labour/ cost savings are the main few reasons for incorporating XaaS solutions. Measuring the outcome for such goals can be tricky and may end up counterproductive. Companies that try to save cost are likely to end up spending more while not being able to enjoy agility of matters.
For instance, some try to get the existing team to take on the maintenance and operations of the solutions in house but end up spending more on training or risk an increase in attrition rate because the existing team is either overly exhausted or does not have the right set of skills for immediate needs. Another instance is to purchase expensive equipment at a lump sum upfront for the sake of a lower amortization rate/year instead of renting at a slightly higher annual price. However, this is how many huge organisations are not able to be agile enough in improving their work processes because they can only replace systems once in every decade considering the initial large investments in the inventories as compared to small businesses that enjoy better flexibility of incorporating more advanced systems as and when the vendor upgrades/updates ironically because they cannot afford the huge upfront investments.
In a Nutshell
All in all, we are learning new things everyday so no one is truly a know-it-all expert when it comes to digital transformation. Every company is unique and so is its business needs. Just keep an open yet discerning mind, don't feel less than when it comes evaluating solutions vendors, have the key pointers in mind and we shall all be on track as we solve things one by one.
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