Why SaaS / Cloud implementations require less consultancy?
I experienced that the implementation of Saas-applications and Cloud services require substantial less consultancy than on premises implementations. Within my company AllSolutions I experience that we require arround 20 – 25 % of the days for implementation compared to on premises implementation from Microsoft Dynamics, Microsoft AX or SAP-implementations.
In general the implementation ERP SaaS versus ERP on premises requires 20 % of the number of consultancy days. For CRM implementations this is even better, SaaS requires just 10 % of the number of days required for on premises. Dell implemented Salesforce, 4000 employees within 12 weeks.
I received a Cap Gemini presentation about their first experience with a Cloud Computing implementation. They made a joke about the way how they offered their services. They mentioned that they should have offered it fixed price, due to the fact that they realized the project just in 25 % of the days they budgeted.
Why is this so important? This means that the cost for implementation of business support systems is reduced dramatically. Normally with a ERP implementation consultancy costs are 5 till 10 times the license fee. SaaS and Cloud services are subscription based financed, OPEX instead of CAPEX. If the implementation costs are low it will be much easier for an service provider to take them into the subscription fee. Besides that the total implementation costs are lower and we get a better ROI, also the implementation time is much shorter. This means the ROI can start earlier. If we at AllSolutions can implement a company within 3 months, the on premises competition takes at least 12 months.
So I really wanted to know what the reasons behind this reduction were. Besides the easy to think of reasons, like no implementation of hardwae, no order time and no installation of the software (no mistakes). So I did some study on this subject. I still do not have all answers so readers help me to find them. I came to the conclusion that there is not one reason why the implementation time is shorter and the costs are lower, it is a combination of several reasons. The following list I have retrieved so far:
1. No hardware and software installation, no network implementations, the functionality is available on all company, and non company locations, with a internet connection.
2. SaaS Software is written in modern tools SOA oriented which makes innovation easier.
3. Integration with other applications is easy and not comparable with the integration of ‘old’-days software.
4. There is just one version of the Software
5. All the data is centralized
6. Provisioning is online and easy to do
7. Piloting is easy after having users provisioned, the parameterization can be done with groups of people online.
8. The software and services are standard and flexible organized.
9. Training time is reduced due to the following facts :
a. The user interface of the software is webbased and users are experienced with these type of interfaces.
b. People are online in their own office and can be followed online.
10. Companies who select SaaS / Cloud applications already expect that those applications are more standard than on premises applications. They easier accept the best of breed process that are presented by the supplier than with implementations on their own premises.
The last argument, which has substantial impact, was quite new for me. I didn’t expect this. SaaS-companies are doing their best to make customer adaptations possible, and then customers are telling them that they have chosen a SaaS-service for the reasons of standardization and the use of best of breed processes.
I can’t give yet an indication about which of those reasons have the most influence on the reduction of implementation time. People with experience on this issue, please comment. This effect of Cloud Computing has a tremendous business impact. Not only can you innovate without investments, but the innovations can be implemented earlier and at lower costs. Not only for SaaS-users has this impact, its impact is also huge for the current IT-community. They can’t ask the same ammount of money for implementation as in the “old” IT-economy.
Posted: May 5th, 2010 under SaaS.
Tags: cloud computing; implementation; SaaS; ERP; CRM
Comments: none







