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Alvaro is a seasoned technical project manager and consultant. He has rolled out numerous SaaS implementation projects and delivered complex cloud and AI-driven projects at numerous companies worldwide.
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Software as a service (SaaS) has reshaped business operations through its scalability, cost-effectiveness, and support for remote work. Accounting for 34% of the $491 billion spent on cloud technologies in 2022, SaaS is the largest segment of global cloud spending. But implementing a SaaS solution—especially when migrating from an on-premises legacy system—can present substantial challenges for a project manager, including unplanned expenditures, lengthy implementation timelines, and the orchestration of large, highly skilled teams.
As the growth of SaaS is expected to continue, fueled by digital transformation initiatives and AI advancements (popular SaaS products include Open AI’s ChatGPT and API, for example), it’s essential to be aware of the complexities involved in a SaaS implementation project and how to address them effectively.
This article describes the characteristics, benefits, and risks, as well as the necessary implementation and change management strategies, for the successful integration of SaaS into various types of businesses. Drawing from my extensive experience spearheading these types of projects, I provide real-world insights and examples to illuminate the path toward successful SaaS deployment.
SaaS is a transformative business and distribution model for digital products. It started to see significant growth around the mid-2000s, with the arrival of major SaaS companies such as Salesforce, which launched the first major SaaS customer relationship management (CRM) solution, and Google, with its Google Apps suite of productivity offerings.
The real explosion in growth occurred in the last decade, with the expanded availability of cloud storage and the reliability of internet connections making cloud-based services cheaper, more feasible, and attractive to businesses. Remote work pushed this adoption further, as companies needed to speed up their digital transformation efforts and respond to an increased demand for apps enabling online services like telehealth, e-learning, and e-commerce.
The SaaS business model encompasses several key characteristics that can benefit businesses:
Most companies assume that—like the popular SaaS services Netflix and Spotify—SaaS products should require little to no implementation because their delivery occurs through the internet and should be plug-and-play. In most cases, this assumption could not be further from the truth.
As complex as implementation can be, it is worth it. For example, I was part of the implementation of a SaaS-based airline core system for a major Latin American airline that was grappling with outdated legacy systems that hindered its operations and customer service. It needed a scalable and flexible solution to handle its growing passenger volume and to improve efficiency. The implementation required meticulous planning, extensive testing, and collaboration with many of the airline’s teams, as we faced the challenges of migrating complex data structures, integrating various airline modules, and ensuring a seamless transition without disrupting operations.
But once implemented, the SaaS core system enabled the airline to streamline operations and provide an exceptional customer experience. Real-time updates and efficient flight management capabilities allowed the airline to handle increased passenger volume, and the scalability of the SaaS solution ensured it could adapt to changing demands.
Based on my experiences and those of my colleagues all over the globe, I put together the following best practices for SaaS implementation that can help project managers lead this process regardless of company size or industry.
I once worked on an implementation project for a midsize company that was transitioning from an outdated on-site system to a SaaS email system; implementation quickly became complex, involving data migration, settings configuration, and integration with existing clients and devices.
From this experience I learned the necessity of taking a strategic approach and carefully considering the following factors:
Despite all the challenges, the SaaS system brought substantial benefits, such as enhanced security, improved collaboration, and easier email management. It also provided the flexibility of accessing emails from any location or device, which reduced maintenance costs while allowing the IT team to focus on strategic initiatives.
Metrics play a vital role in SaaS implementation, providing valuable insights into the success of the process. Organizations can track key metrics before, during, and after implementation to evaluate impact and identify improvement areas. This tracking is largely overlooked by many organizations involved in SaaS. According to the 2023 Snapshot Survey: SaaS and Cloud Spend Optimization & Automation, 64% of companies experience unplanned SaaS expenditures. The primary causes of this waste and inefficiency are reliance on outdated processes, inaccurate projections during license procurement, and a lack of promptness in decommissioning licenses when they are no longer required.
To avoid this situation, SaaS project managers must keep a close eye on the following metrics:
Metric | Description | When to Use |
---|---|---|
Test Acceptance | Identifies how many use cases/tests are being met in previous evaluations and simulations | Before migration |
Downtime | Measures the duration of system unavailability or inaccessibility |
During and after migration
|
Users Impacted | Tracks the number of users affected | |
Processes Impacted | Identifies the number of affected business processes | |
Bugs Identified | Measures the number and severity of software defects discovered | |
Data Integrity | Evaluates the accuracy and completeness of data migration | |
Performance Metrics | Tracks system performance parameters such as response time and throughput | |
User Satisfaction | Gauges user satisfaction levels with the new system |
After migration
|
Cost Efficiency | Measures the cost savings or cost-effectiveness of the migration |
SaaS project managers share a common challenge: People resist change. Introducing a new system often generates fear and insecurity among employees, who may be concerned about its impact on their work routines and job security. McKinsey & Company points out that resistance from employees and management leads to the failure of nearly 70% of digital transformation initiatives. To mitigate this issue, I recommend implementing these change management strategies:
During the SaaS email system implementation, my team organized sessions during which employees could practice using the new features and functionalities. These personalized trainings for each department focused on real workflows and enabled faster and more effective adoption.
Remember, people are crucial to the success of any project: Be prepared to provide proper training tailored to the specific needs of each team.
Project managers can use cutover strategies to minimize disruptions and ensure a smooth transition to a new system while reducing the risk of data loss or system downtime. A cutover plan outlines the steps and actions needed to migrate data, users, and processes. It also defines the timing and sequencing of the migration and identifies contingencies or rollback plans.
Before my implementation of a SaaS CRM system for a growing sales-driven organization, the company needed help managing customer data in a centralized system that tracked sales activities and nurtured customer relationships. The solution had to be capable of scaling with its expanding customer base and providing real-time insights to drive sales growth. I decided that evaluating several cutover strategies would be crucial for the success of this SaaS implementation plan, as each offered different benefits and considerations based on the organization’s specific needs and risk tolerance.
By analyzing the pros and cons of different strategies, project managers can make informed decisions that align with organizational goals, resources, and overall implementation objectives.
Here are some common types of cutover strategies including their benefits and risks:
For the SaaS CRM implementation, we adopted a phased cutover strategy. This allowed us to migrate sales teams and customer data sequentially, minimizing disruption to ongoing operations and enabling a gradual adoption of the SaaS CRM functionalities. The phased approach enabled me to effectively manage the complexity of integrating the new system with existing business processes and third-party applications.
When comparing these migration cutover strategies, always consider the potential impact on the business, such as the risk level, resources needed, compatibility and functionalities integration, and the operational complexity of managing two systems.
The following table compares cutover strategies and their impact:
Strategy | Risk Level | Resources Needed | Compatibility and Functionalities Integration | Operational Complexity |
Big Bang | High | Low | Moderate | Low |
Parallel | Low | High | Moderate | High |
Phased | Moderate | Moderate | High | Moderate |
Incremental | Moderate | High | High | High |
Hybrid | Low | High | High | High |
Remember to account for stabilizing time after the migration. During this period it is crucial to monitor the new system closely so it works as intended and any bugs or unforeseen problems can be addressed promptly. Having a rollback strategy in place can help mitigate issues found during the stabilizing time.
Implementing SaaS solutions is essential for companies to stay competitive in today’s digital landscape. The benefits of SaaS—scalability, cost-effectiveness, and support for distributed teams—are undeniable. However, transitioning from legacy systems to SaaS systems can have a significant impact on tasks such as data migration, integration, and change management.
To navigate these challenges, project managers need to understand the intricacies of SaaS implementation, including evaluating risks, resource requirements, and compatibility, and managing old and new systems. They must also consider measuring success through key metrics, addressing human factors through change management strategies, and choosing the right cutover strategy to minimize disruption and ensure a smooth transition. If you haven’t helmed a SaaS implementation plan yet, consider this your key to unlocking this revolutionary software delivery model.
SaaS implementation refers to the steps taken to integrate a software as a service solution into an organization’s workflow. It involves customization, data transfer, user training, and ensuring that the software aligns with business objectives.
Implementing a SaaS platform involves several steps: understanding the needs of the business, choosing and customizing an appropriate SaaS solution, migrating existing data, providing comprehensive training to users, and continually monitoring and optimizing the system for best results.
Typical examples of SaaS solutions include customer relationship management (CRM) systems that streamline client interactions and enterprise resource planning (ERP) platforms that optimize business processes. These services are hosted in the cloud, negating the need for local installations.
Santiago, Chile
Member since October 16, 2019
Alvaro is a seasoned technical project manager and consultant. He has rolled out numerous SaaS implementation projects and delivered complex cloud and AI-driven projects at numerous companies worldwide.
PREVIOUSLY AT
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