Why SaaS has not Replaced Manual Excel
By now you have probably heard the hype: Software as a Service (SaaS) is taking over the enterprise, with one survey showing adoption rates at over 74%. The future looks rosy – according to Gartner, total sales of SaaS applications is projected to double over the next three years with even the poorest segments growing at almost 20% per year. The value propositions of lower cost, higher availability, faster implementations, and easier administration should appeal to every organization that is considering the approach versus the traditional on-premise model.
While organizations increasingly invest in SaaS applications, manual processes and spreadsheets continue to drive operational activities in virtually every company. The unreliable, uncontrolled nature of manual “shadow solutions” creates risk and inefficiency for teams and departments who depend on them, yet in most cases they feel no effective alternative exists.
From ERP to SaaS, without leaving Excel
Every organization has highly unique business objectives, operational processes, workflows, and desired outputs – meaning each solution or application needs to be highly customized. Over the past 20+ years, this has been addressed with expensive, heavily tailored enterprise resource planning (ERP) software solutions that tie together finance and operations in a highly effective manner. Yet, the expensive, slow, and labor intensive nature of customizing these platforms leaves gaps and (out of necessity) vendors focus on solving only the largest most pressing business problems. Medium sized issues with business impacts from millions of dollars are still left to manual processes and offline shadow solutions.
In large part, these medium sized issues are driving the rise of SaaS applications, addressing common business problems across a large number of organizations. While the standardization of this approach drives relatively lower effort and cost, it means that any use cases specific to an organization are unlikely to be solved by an existing SaaS offering – and the same manual shadow systems continue to persist.
Why Companies Continue Using Shadow Systems
Accessing and Modeling Data:
In the majority of use cases we have consulted on, the manpower allocated to manual shadow systems or offline spreadsheet work is related to accessing, merging, and manipulating data. Oftentimes, this data needs to be “modeled” to reflect unique business logic – a customization not possible with the rigid nature of multi-tenant applications. In other cases, the problem is that information isn’t in a format that can be easily automated, such as data that is manually collected within spreadsheets.
Aligning with Internal Processes/Workflows:
Sometime SaaS applications have little difficulty accessing, displaying, visualizing, and interacting with information. The challenge lies in the unique business processes that ultimately result in the ability to make correct decisions and take action. The heavy standardization of SaaS based solutions, means they typically have a “hardwired” process aligning with their suggested best practices which can be an unrealistic expectation for most operational functions.
Front End Design for Specific Use Cases:
In each of these situations, the end goal is for a user to make an optimal decision or take the most effective course of action. For different organizations, triggering that action is dependent on a wide variety of factors including environment, process, work style, organizational structure, and so on. For a solution to become actionable, it’s critical to leverage user-centered design that fits the unique workflow of each organization which is something SaaS applications struggle to accomplish given the limited flexibility of multi-tenant architectures.
Even with apparent shortcomings SaaS may present, the fact is that shadow systems and spreadsheets are unreliable, uncontrolled, and present tremendous financial risk. At the same time, purpose-built SaaS applications can be a bit like a hammer, when not every problem is a nail. ERP’s and other enterprise systems are typically expensive, complex, and unresponsive solutions to medium size problems.
So how do successful organizations move to automated systems that reliably and effectively improve operations?
Custom Solution Development
The merits of custom solution development are obvious – a solution can be tailored to the exact needs of the business. Yet, the perception exists that it is expensive, time consuming, and difficult to manage and administer. However, retroactive cost analysis typically finds that a custom solution, either built from scratch or leveraging a highly flexible platform as a baseline, is far less expensive than ongoing subscriptions to multi-tenant applications.
One of our clients recently fell into the trap of “buy” over “build” when purchasing technology to manage operations across their call centers. Despite evaluating and even piloting numerous SaaS and on-premise call center management solutions, they failed to see the expected performance impact.
With these factors in mind, our team evaluated the work effort required for a custom application and found the cost for both initial development and ongoing maintenance to be significantly less than annual subscriptions to their non performing SaaS applications. Our development team wrote a custom API to unlock critical data from its source system. Next, User Interface and User Experience design experts from our in-house design agency SILK Digital worked closely with call center managers and other end users to design an optimized experience.
The end result is a mobile (tablet) application utilized by managers on the call center floor, leveraging trigger based alerts to notify them whenever action is required. By aligning the application with their process, the technology moved from a passive resource to an active part of the ongoing workflow, resulting in optimized operational performance and a measurable business impact.
An approach that fits your current environment
Regardless of the technology approach, it is critical to work within the context of your existing IT environment. While moving away from manual processes is ideal, it is also dangerous when one-off solutions are implemented for each use case. Introducing new complexities and risks to the organization and becoming burdensome to manage. From the outset, it is important to consider the existing environment, policy, and preferences from a technical perspective. The approach must be platform neutral – that is, the initial evaluation of the technical environment will drive options that are ultimately considered. From there, the most practical approach can be identified and implemented.
While business technology has evolved greatly in recent decades, there are many operational business issues with no magic solution – there are many effective technology approaches to addressing operational issues including SaaS, configurable on-premise, modifiable platforms, and custom development. While purpose-built software applications may address your business pain, their solution is not always optimized for the unique considerations in a specific company. Rather than evaluate and invest in applications, companies should further embrace a solution-centered approach. Starting with a thorough evaluation of requirements and considerations, organizations and their consulting partners can work together to identify, select, and implement the most appropriate solution.