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Achieving the promiseWhy Software as a Service requires a new approach to Application Management

Accenture is supporting more and more clients as they turn to Software as a Service (SaaS), turning to the cloud first for core business functions. Vendors like Salesforce.com™, Workday®, NetSuite®, Oracle® and SAP® are enabling organizations to seek breakthrough results as applications become increasingly powerful and the security and scalability of the cloud more reliable. However, we have seen that broader SaaS adoption also requires organizational and operational change to help manage applications effectively. SaaS demands a new approach to post-implementation application management to deliver all the business promise of which it is unquestionably capable.

In today’s high velocity business world, software is taking on a new role as a key strategic asset and a major source of competitive differentiation. Applications are helping to drive the pace of change, managing new business complexity and enabling organizations to respond rapidly to new opportunities. Accordingly, there is a decisive movement away from monolithic applications towards those that are cloud-based and have built-in mobility and analytics. These qualities are essential as enterprises adapt to rising complexity and harness the power of digital technologies.

In this context, SaaS is becoming a must have for many organizations. It promises to secure value by always working with the most recent release and being up-to-date with new functionality and innovations. SaaS can also offer cost effectiveness and ongoing flexibility. And all this can add up to measurable technology and business benefits for many enterprises.

But—and it is a significant “but”—realizing those benefits and value is only possible if the services are effectively—and continuously—managed. And that may not be as straightforward and simple as some SaaS adopters believe. Experience shows that for the majority of enterprises adopting SaaS, the reality is that their overall IT environment is becoming more, not less, complex as a result of hybrid technologies. There is a gap between the speed and agility of SaaS applications and the older, slower legacy systems that they operate alongside. Managing this new, hybrid ecosystem after the initial deployment of cloud-based applications requires a fresh approach—and it’s a challenge that requires the business to work with IT.

From “go live” to “go, go, go”Approaches to the traditional application implementation follow a well-trodden path. Design and build moves to testing and go-live and from there into steady state maintenance. The SaaS world is different, and “go-live” is no longer the only focus.

Instead, business transformation is a continual process post-implementation with value realization arising from the ability to improve, adopt and adapt as SaaS vendors add new functions and features and the businesses themselves change. That means, in many ways, IT is required to become more, not less, engaged with the business to make sure that they are doing more than simply “keeping the lights on,” by supporting the realization of ongoing value. In fact, in a SaaS environment, continuous delivery innovations such as DevOps and Agile align business, development and operations stakeholders in order to optimize application delivery. This improved interaction combined with increased automation transforms delivery, allowing IT to rapidly evolve as business needs change.

IT and the business: a new relationshipThat fluid dialogue and exchange is one aspect of a new relationship between IT and the business that is required to help SaaS be successful over the long run. SaaS creates a new dynamic—and reshaped roles—that can benefit both sides if done right (see Cardinal Health sidebar for an example of this in practice). While it’s true that SaaS shifts some technology control and a degree of autonomy to the business, that’s far from the whole story. SaaS management helps to bring the business and IT together, making joint decisions, throughout the life of the application. To help get the most benefit, the business and IT are required to be engaged and sitting at the same table, right from the earliest planning stages of any implementation—even before making the decision to adopt a SaaS solution.

Agile mindsetSuccess with SaaS also demands a new mind-set that eschews a “high performance counsel”. The approach that has guided on-premise software implementation to date, requiring endless testing cycle after testing cycle to arrive at a flawless go-live,

is required to be replaced with one that embraces “good enough” in the context of iterative, adaptive and ongoing management. By looking as far ahead as possible in the release cycle, organizations can adopt a new, more agile mind-set that allows changes to be accommodated in subsequent releases. Everything “right first time” no longer applies.

New skills to help unlock new valueAs the SaaS vendor now controls the schedule for releases, resources to support ongoing SaaS updates and improvements must be considered upfront. That means establishing an integral operational and support model in parallel with any new SaaS implementation. In particular, this requires resources who are comfortable and conversant in both business and IT domains—resources that are likely to be scarce and consequently in high-demand. Those same experienced resources will also be essential to extracting value from a further major benefit of SaaS: the community that develops from having hundreds—if not thousands—of organizations using the same platform. They should be able to spot the insights that will emerge from a real-time user community, tapping into a stream of potential enhancements.

Many organizations will struggle today with the in-house resources they will require to extract the maximum value from SaaS, manage frequent updates and avail themselves of the benefits provided by new features. Finding ways to train, recruit or source those key resources and experience from third parties must therefore become a priority.

With SaaS moving rapidly from fringe to mainstream, enterprises are understandably anxious to reap the benefits it offers. They recognize the major role that SaaS will play in helping them to become more agile, responsive and innovative organizations. But to realize that vision, enterprises will also be required to move to a fundamentally different model and a new approach to application management—with the resources to match.

Cardinal Health went live with Workday in 2010, initially supporting 23,000 employees in the US and Puerto Rico. Since then, users have been added in China, Malaysia, Singapore and Canada and the company is moving to Workday as its global Human Capital Management (HCM) platform.

One of the key benefits that Cardinal Health wanted from Workday—fast-paced innovation—also turned out to be one of the biggest challenges: the Human Resource Information Systems (HRIS) team quickly realized that managing the frequency of releases required a new approach, particularly in the relationship between IT and HR. Relying on an IT team with multiple competing demands on their time was delaying HR’s ability to deploy innovative enhancements. In response, the HR information systems team developed a new approach. Kelly Johnson, Director, HRIS, M&A and Governance at Cardinal Health, explains: “During our first year we found that we were struggling to

keep up with the pace of change. With IT resources stretched, we put a business case together that proposed having HR resources configuring Workday. After a successful pilot with Talent Management, we’re now in the position where we can take on much of the configuration work ourselves. IT moves it into production and that handoff process provides a safety check.“

Piloting this new way of working with Workday’s Talent Management application (chosen as a less risky area that wouldn’t impact on payroll or downstream systems) the new approach helped to successfully spread workloads between HR and IT resources. As Kelly Johnson explains “we now leverage all our resources as one team. We look at who has the capacity, the right experience and interests and because we can assign and spread work that way, we’re able to do more and do it quicker.” A clear delineation between build and run activities enables the HR team to help keep pace with innovation at the same time as verifying that steady state operations are effectively managed.

Cardinal Health™–a new approach for helping reap the benefits of SaaS-driven innovation

Cardinal Health’s HR information systems team is now really helping to drive the roadmap for Workday. They’re in control of deciding on the functionality they want and then are allying with IT to monitor that a safe move into production with each new release is done. That shift also means that HRIS requires a new kind of resource. Kelly Johnson describes the new approach: “When we hire for HRIS roles, we’re looking for people who understand the end-to-end HR process, possibly from experience gained elsewhere in the business, and who are tech savvy to a certain degree, but not to the level of an IT resource. But we can train them in the environment and get them to the right level of proficiency really quickly. The result is that we have a very different relationship and operating model with IT. HR has the ability to drive what and when we upgrade, including releasing new functionality to our business.”

Critical success factors

In assisting organizations of all sizes, and in all industries and geographies to transform and enhance their application management capabilities, Accenture has discovered a number of critical success factors in delivering application management for SaaS. Top factors are:

• Build a support organization that is both scalable and able to deliver short burst projects.

• Define support roles and verify alignment with SaaS requirements.

• Equip the support organization with the right technology skills and agile methodology.

• Employ intelligent tools to harvest previous experience and use automation to infuse intelligence into IT delivery, resulting in breakthrough productivity, performance and quality gains.

• Create an organizational framework for continuous improvement that can harness innovations that come from ongoing SaaS updates.

These proposed critical success factors have helped:

A large global investment research firm – After a successful Salesforce implementation for multiple business units, Accenture took on responsibility for the ongoing development and maintenance of the

Salesforce solution. The support has helped reduce the company’s annual operating costs and increased productivity with our automated delivery approach, which led to lower ticket volumes and the ability for the team to perform additional enhancement work with the same amount of resources.

A leading global security services company – After a successful Workday implementation, across more than 50 countries and for more than 60,000 end users, Accenture took on responsibility for the ongoing development and maintenance of the Workday solution with nearly 80 percent of the company’s employees and locations now using Workday.

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Accenture is a leader in helping organizations move to the cloud to take advantage of a new era of service delivery and flexibility, where applications, infrastructure and business processes are brought together and delivered As-a-Service. Accenture’s Cloud First agenda offers comprehensive, industry-focused cloud services including strategy, implementation, migration and managed services, and assets including the Accenture Cloud Platform that can drive broader transformational programs for clients. Accenture has worked on more than 13,000 cloud computing projects for clients, including three-quarters of the Fortune Global 100, and has more than 21,000 professionals trained in cloud computing.

For more information, please contact:Saideep Raj Cloud First Applications lead Managing Director, Accenture saideep.raj@accenture.com

Bhaskar Ghosh Group Chief Executive Accenture Technology Services bhaskar.ghosh@accenture.com

www.accenture.com/AMforSaaS www.accenture.com/saas

This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative. mc934