More systems are being implemented in the cloud as SaaS solutions by teams that are working remotely. We look at the challenges this poses, and what can be done to mitigate the risks.
The move to cloud and remote working (hybrid or otherwise) is inevitable. Deloitte reported in 2019 that 36% of treasury management systems were deployed in the cloud / SaaS. In recent statistics presented by Adenza, 75% of all new North American sales were cloud SaaS offerings, and 67% in Europe. With the increased adoption of cloud SaaS solutions, and remote working on the rise, new system implementations are facing significant hurdles.
In this article, we will look at some of the challenges that we have encountered in working with our clients, and review some of the approaches that we have seen be successful in mitigating these new delivery risks.
Nobody Knows the Troubles I’ve Seen
Most system vendors choose to deliver their cloud SaaS solutions from an offshore delivery center, with the aim of centralizing the delivery to a single team. In most cases this offers a reduced implementation cost compared to an on-site team. This delivery team may be working on several client projects simultaneously, depending on the size of the team, and often relies on using a pre-configured system that is then tailored to each client’s needs.
Having a team working remotely, potentially in different time zones, complicates the communications between the vendor and client teams. The effect is that the client’s team becomes decentralized from the implementation activity. The vendor is reliant on understanding any business requirements through documentation written in the initial phase of the project. It is hard to overstate the importance of that.
With a less active role in the delivery, the client becomes dependent on the vendor providing a solution to address the business requirements. The challenges include: project management; the knowledge gap between vendor and client; interfaces and integration; and how internal business processes are adapted to meet system best practices.
Lean on Me
Vendors often provide some initial training and demos at each delivery stage to show the functionality being delivered, but, unless the client has prior experience of the system, they do not know or understand the complexities of the vendor solution being implemented. You do not know what you do not know: the infamous unknown unknowns.
There is usually more than one way to configure the system and the client is putting a large amount of trust in the capabilities of the vendor resources. It is not simply fine tuning a pre-configured system; the vendor’s resources need to understand the client’s business.
One of the major causes of implementation delays is when clients deviate from the vendor’s out-of-the box solution. There are numerous valid scenarios that result in a customization being required to the vendor solution, but these can be costly and have significant, unintended long-term consequences. Managing the vendor solution capabilities against the requirements at the start of the engagement will assist in the planning of the end delivery.
I Got You (I Feel Good)
Unfortunately, there is no easy shortcut to mitigate these risks – this market has significant demand and limited teams with the ability and track record to assist. Our recommendation is to stand up a staff team to work with the vendor. Then task those key in-house staff to engage in the project and become future system experts. This will help with the long-term support of the system. Ensure that adequate training is provided by the vendor. As a reference point: an hour demo at the end of each sprint is not adequate.
Additional support can be provided by bringing in resources that have experience of implementing the vendor solution. Be sure to understand their capabilities and check references. Using a third-party vendor’s resources, working closely with the staff team, increases the ability to challenge the vendor’s delivery and ensure business requirements are being met. This is also beneficial to the vendor as the solution delivered is more likely to meet the initial project drivers, thus starting the long-term relationship between the vendor and client on the right footing.
Let’s Stay Together
No system operates in isolation, and this is also true of cloud SaaS solutions. The vendor will likely provide out-of-the-box integration to Bloomberg, Refinitiv, and other major platforms, but the project will need to build other upstream and downstream interfaces. The complexity of the integration will determine the resource requirements. Integration can be as simple as a file transfer, or require more effort, as with a point-to-point service call. This often requires the client to have a development team, but they will not immediately understand the data model and format of the incoming cloud SaaS solution.
There are five possible approaches to integrating the vendor solution:
- Entrust the vendor to deliver all interfaces. They would need to be taught the data model of any in-house or proprietary systems but should have extensive experience building similar interfaces for other clients.
- Use the internal development team, with the vendor providing the necessary data model and mapping knowledge of the cloud SaaS solution. This is likely to come at a cost for the vendor resources and time.
- Train the internal development team resources in the vendor solution. This again may come as an additional cost both in time and money but provides in-house knowledge of the cloud SaaS solution for the long term.
- Recruit skilled developers with knowledge of the vendor solution to embed within the existing team. This will require time to recruit and would need a longer-term view of the planned resource pool.
- Use of a third-party team that has domain knowledge of a range of external systems, and access to additional or replacement resources if required. This approach reduces key resource risk by having multiple resources available, and factors in implementation handover back to the client from the outset.
A Change is Gonna Come
In general, clients have processes that were defined and changed over time to mitigate the limitations of the legacy system. A crucial part of any implementation is to review and redefine those internal processes to align with best practices and functionality of the new solution. Vendors will, as part of the delivery, conduct workshops to ascertain the business requirements, but few will give good recommendations on business process changes. Many people forget that these teams are integration consultants, not change management consultants.
The project needs a team that combines an in-depth understanding of the new system’s functionality, as well as the ability to parse the changes required to business processes. Without the system knowledge, the common practice is to implement a solution around the current processes, resulting in only a small improvement in the business, or significant customization of the system. An inability or unwillingness to change business processes will equally result in a sub-optimal implementation.
Higher and Higher
Lucido has experienced this at first hand and was able to work with the client to redefine the processes to eliminate redundant steps in the business workflow. Our team has combined over a century of hands-on experience in implementations of vendor solutions and are ready to impart that knowledge to assist any client on their journey. We have SMEs that can help a client better understand the vendor solution, the business requirements, and assist in refining and streamlining their processes. No matter where you are in your system implementation, Lucido has cloud SaaS solution specialists that can be relied upon to give the assistance you need. Reach out if you would like any support.
