Driving digital maturity with SaaS transformation – Part 1

Debunking Common Myths About Internal Branding

Posted by Akhand Singh and Jeffery Hall on February 27, 2020.

Digital transformation can foster a faster, more agile approach to application deployment — a goal shared by many digital businesses. Organizations aspiring to maintain their competitive edge and execute on digital transformation strategies need modern and flexible business applications – enter the “The SaaS (Software as a Service) Technology”. SaaS has grown rapidly in the past decade and has become a key driver and deployment model for most commercial business applications, helping applications buyers to leverage technology innovation more rapidly, improve customer experience, and accelerate their transformation growth.

There’s a lot to appreciate about the SaaS model: Flexibility, quick implementation, cost benefits, ROI and the promise of an always-on pipeline of innovation through continuous updates. Yet just as many digital transformation efforts have stalled, organizations have also been slow to fully embrace SaaS apps or realize the true benefits of SaaS implementations. So how can we look beyond the hype to take advantage of the SaaS? And how are some leading digital mature organizations deploying SaaS? What are some of the benefits?  Additionally, to what extent are the expectations of an organization met on the SaaS success factors i.e. Improving processing speed? Integrating seamlessly in the company’s stack? Improving user experience and end-user adoption? Lowering costs?

 

Let’s find out answers to these questions and some actionable recommendations for organizations considering SaaS in their digital transformation strategy.¹ In our survey, we assessed the value of SaaS solutions by comparing full SaaS stack versus companies with mixed stack by understanding their journey and growth pattern.

What has worked for organizations?

1. Companies who moved their entire technology stack to the SaaS reported significant benefits compared to mixed-stack companies

In the survey, we found out that organizations moving their entire technology stack to the SaaS saw significant benefits in multiple areas when compared to the mixed stack organization² Here are some key benefits reaped by highly mature SaaS organizations:

2. Companies with all-SaaS stacks saw strong results for ROI

In our survey, for all SaaS solution, a full SaaS stack exceeds ROI expectations for more than 2/3rd of our respondents, indicating better business case development for SaaS solutions. ³ SaaS model promotes more ownership and accountability to business stakeholders, which can help them to realize benefits faster and reduce friction with the technology management organization. In our survey, we found out that when trying to capture the highest ROI possible, building a consistent stack can provide better results.

Keep in mind that when considering all options for upcoming technology implementations, it is important to recognize that implementation costs have shown in some cases to not be significantly different from previous on-premise implementations.

3. Faster implementations

In the survey, we could see that highly mature SaaS companies experienced far greater speed benefits. Companies who committed fully to a Cloud stack realized significant improvements in top-end processing speed, even relative to companies with a 75 percent Cloud stack. Organizations that committed to a full transition to the Cloud stack made infrastructure changes more quickly, allowing for faster deployment and quicker improvements when feedback indicated the need for changes.

Software decision makers consistently cite speed and agility among the most important factors of employing SaaS. The configurability of leading SaaS software products is an architectural advantage that simplifies implementation and enables changes to application setup following go-live.

4. Embedding technology innovation in SaaS platforms and ecosystems

The familiarity with application usage allows users to more quickly adopt to SaaS solutions, because in the course of time, they get more comfortable with consistent updates rather than massive overhauls after long time periods. This allows SaaS buyers to recognize the increased value of the technology platform in addition to the functionality of the applications themselves. Organizations, for example, continue to innovate at the platform level with AI and other latest technology innovations in the market.
SaaS solutions enable organizations to adapt to new technologies faster and more easily at the platform level and leverage innovation through the vendors’ ecosystems.

What hasn’t worked for organizations?
Organizations love the speed, flexibility, and business agility that SaaS enables, but as they adopt SaaS, they can also encounter new challenges, such as:

    • Managing frequent updates. Whereas on-premises software updates are infrequent, and customers can often defer or even skip them, SaaS upgrades are more frequent and non-optional. This requires an increased change management effort to decide when to put resources in place to evaluate, test, and activate version upgrades.
    • Dependency on SaaS vendors for operations and security. There is high dependency on vendors to operate and manage the solutions. Organizations usually end up in trouble where the support included in the base subscription is not enough and requires extra paid support to get better results, increased help desk support, and dedicated representatives.
    • Not achieving expected ROI and cost savings: Organizations generally assume that Cloud and SaaS solutions would deliver significant cost savings, from an implementation and operations perspective, but from the survey we learnt that only slightly more than half achieved their expected business case results. The same is true for ROI, as many respondents believed that a SaaS transition would pay for itself but found the implementations to require similar cost structures as on-premise implementations.⁴
    • Multiple purchases and widespread usage without considering architecture: SaaS subscription usually starts off too small to notice or properly address but can soon grow into an unwieldy problem. Many SaaS purchases are “just for a few users” or “just for a short time” — but then grow to become important, entrenched enterprise solutions without fitting in the overall technology architecture.

      SaaS consists of hundreds of niche solutions, few of which are built on the same platforms. Organizations purchase multiple SaaS solutions facing diverse architectures with varying skill requirements and integration challenges due to the layers of acquisitions the vendors have used to build up the SaaS portfolio.

    • Minimal due diligence and amateur negotiations during purchasing SaaS:  Organizations may not conduct the due diligence they need to understand technical integration capabilities, technical or contractual limitations or skill requirements. Business buyers may also fail to do the important ask of due diligence during vendor selection.Additionally, SaaS negotiation requires a customized negotiation approach; neither traditional software negotiation tactics nor hosting practices from the books. Many leaders are still unaware about the questions they should be asking to identify hidden costs and missing terms, which is one of the main reasons for budget overruns.

      Organizations can start by recognizing that creating a SaaS strategy or getting a SaaS subscription is only a first step. Yes, SaaS might be only one of the pillar in your overall digital transformation, but it’s still critical to know where you want to go, how to get there, and what medium would be the best to reach your objectives – of course with a balance between cost and comfort. Stay tuned for part 2 of this series where we’ll discuss leading practices for SaaS implementation.

      Akhand Singh is a senior consultant in Deloitte Consulting LLP’s Digital & Cloud Enablement practice, advising global client across industries to help them activate their digital organizations and prepare them for digital transformations.

      Jeffery Hall is a specialist leader in Deloitte Consulting LLP’s Digital & Cloud Enablement practice, advising and managing client business transformations driven by digital innovation.

Leadership development reimagined: Developing leaders in the flow of work

BYOP uses current business challenges as content for leader development

Posted by Wayne Robinson, Neil Alger, Kyle Sandell, Natalie Elghossain on Febuary 21, 2020.

“I never teach my pupils. I only attempt to provide the conditions in which they can learn,” said inventor Albert Einstein. As discussed in our first blog post in this series, in some cases, traditional leadership development programs are failing leaders by attempting to teach leadership divorced from the realities of their day-to-day work.1 Instead of focusing on teaching skills in an artificial environment, we argue for creating the conditions within the “flow of work” for effective problem-solving while developing problem-solving skills required to successfully lead in the future. We believe that problem-solving is the most critical leadership capability for leaders in a complex and ever-disruptive world. How do leaders develop those critical problem-solving skills? The Bring Your Own Problem (BYOP) methodology.

Continue reading “Leadership development reimagined: Developing leaders in the flow of work”

The future of work for provider supply chain executives

Part 3: Embracing technological solutions and digital workforce

Posted by Eileen Radis, Paul Kreder, Jen Brown, Paul Atkins, and Kurt Banas on Febuary 20, 2020.

The future of work encompasses changes in work, in the workforce, and in the workplace. In preparation for these changes, supply chain executives will need to identify innovative ways to become an agile organization. This can be accomplished through the combination of empowered organizational design, robust talent strategies and implementing innovative technologies.  Reimagining supply chain will prepare leaders with the insights needed to proactively prepare for the future of healthcare and further help their workforce to operate at the top of their license.   This blog will focus on three strategies to help supply chain executives prepare to make the shift in future of work: (1) digitizing supply chain (2) activating automation and (3) optimizing the workforce.

Continue reading “The future of work for provider supply chain executives”

Automating HR service delivery: Demystifying the conversational AI market

Posted by John Brownridge, Greg Vert, Gautam Shah, & Simon Schoon on February 19, 2020.

Conversational AI is a hot topic for organizations evaluating the next generation of tools to optimize HR service delivery or seeking to augment the work of HR professionals and people managers. Yet many of our clients are taking a “wait and see” approach to a confusing and highly fragmented market. For those willing to learn how to navigate this landscape, there may be substantial opportunities to improve work outcomes for HR and the overall employee experience.

The adoption paradox: Conversational AI in HR

With a 40 percent increase1 in smart speaker ownership in the United States over the last year alone, the pace of adoption of tools that automate conversational interaction is staggering. Many of us have become accustomed in our personal lives to chatting with an assistant to send money, check our credit score, buy insurance, or make a reservation—sometimes without even realizing we are doing so. More than 30 percent2 of CIOs have deployed conversational AI as a channel to engage front-office customers, and adoption in the back office (notably within the IT function for high-volume transactions like password resets) is increasingly widespread. However, this type of consumer-grade experience is still rarely provided to employees as a means of quickly answering a HR inquiry or taking a HR action.

What explains this paradox? Undoubtedly, HR leaders are faced with a confusing, crowded, and maturing buyers’ market. Virtually every major cloud and ERP provider is investing in tools to automate chat interactions across their product suites, with many making bold claims about what their solution can do. Yet the path to viable conversational AI can be long and winding. It involves an iterative, “fail fast” mindset and leaders moving past common misperceptions and understanding the real-world performance and application of conversational AI. The HR function was an early adopter of cloud and has some of the most innovative technology within the corporate arena; it’s now time to lead with this new opportunity to free up capacity and refocus the work of HR professionals to efforts that drive team and corporate performance whilst reinventing the employee experience.

Let’s start by defining conversational AI

Conversational AI is any solution that combines natural language understanding with analytics or machine learning and automation to orchestrate a business outcome. It differs from other applications of AI; it offers a means to make customers’ lives easier and faster by speaking in their own language, via any channel, to interact with tools, insights, data, and applications.

Yet not all solutions in this marketplace are born equal. In fact, there’s a broad spectrum of capability within the vendor landscape. Supporting complex conversations requires a higher degree of intelligence, and today’s leading solutions are not simply chatbots. Instead, these should be considered digital assistants.

Figure 1[HJ1] . Conversational AI maturity model, Deloitte Consulting LLP, 2020

Conversational AI is also not a self-learning technology. Solutions must be “trained,” much like human employees. In contrast to robotic process automation (RPA), it’s more dynamic in its ability to follow business processes and engage directly with customers.

The conversational AI market

There are more than 1,000 vendors3 currently operating in this space. A majority of these offer a rudimentary question-and-answer capability (that is all too often obscured by layers of the latest AI buzzwords within their external marketing). Certain vendors have begun to emerge as leaders, with a proven ability to deliver enterprise-ready solutions across market segments. Yet the complexity of the market continues to be staggering, and understanding what you get for your money has never been harder. Do I need more language control or less? Does the complexity of my use case warrant a more expensive tool? What level of capability do I need from my in-house talent to get value, and should I prioritize speed to deployment or developing a highly bespoke solution that meets the customer experience standards of my business?

Faced with these choices, HR leaders need a framework to understand the current landscape. We see four different types of tool set emerging and break them down below to help support you in your market evaluation:

SOLUTION TYPE 1: Enterprise technology providers

Chat features that are embedded in to existing HR cloud, ERP, or CRM technology offerings.

Why would I use this type of tool?

“I want to make the most of my existing HR technology investments, keeping my environment as simple as possible, without introducing extra cost or worrying about automating significant amounts of work.”

What are some potential drawbacks?

  • Some cloud and ERP providers are playing catch-up in capability with product innovation, often lagging behind pure-play providers.
  • The assistant also typically has a more limited ability to integrate and take actions in third-party apps, based on a design that is focused on improving access to services within the native application (with some notable exceptions).

SOLUTION TYPE 2: Platforms

Pure-play conversational AI that offers a full spectrum of capabilities out of the box.

Why would I use this type of tool?

“I want a fully featured conversational AI solution that can automate a broad spectrum of work across the HR function and other areas of my business. Product innovation is key, and it has to be simple to deploy, integrate, and secure.”

What are some potential drawbacks?

  • Platforms are often the costliest providers, and the business may have limited or no existing relationship, given the assistant is the primary offering of the vendor.

SOLUTION TYPE 3: Frameworks

A “build-your-own-bot” tool set with limited capabilities or features provided out of the box, but the ability to add more services at different license costs and develop simple use cases fast.

Why would I use this type of tool?

“My priority is speed and flexibility. I want to develop proofs of concept at low cost to prove value, in order to ‘fail fast’ and learn.”

What are some potential drawbacks?

  • Applying framework tools to complex enterprise process landscapes often requires strong in-house technical development capability.

SOLUTION TYPE 4: Points solutions

Assistants that have been developed to automate a specific HR domain like talent acquisition, often including predefined language taxonomies and assets designed to accelerate implementation timelines.

Why would I use this type of tool?

“I’m looking to turn the customer experience and efficiency needle in a particular area of my service and want to do this with as little work as possible in-house to be able to achieve this outcome.”

What are some potential drawbacks?

  • There is often limited or no capability to scale point solutions to other HR domains.
  • The vendors are typically smaller in nature, with few large enterprise customers and less proven integration and security models.

A call to action

Robotic and intelligent automation technologies present major disruption and substantial opportunity for the HR function, and conversational AI is just one facet of a much broader HR automation landscape. Despite the “wait and see” approach being taken by many of our clients, the technology is here to stay and should be recognized as one of the key HR technology priorities of the next one to three years.

At Deloitte, we’ve developed several assets to help you to thrive in your journey to experiment and adopt technologies, ranging from tools to support opportunity assessment to accelerators for different implementation phases. Reach out to learn more.


Authors: John Brownridge, Greg Vert, Gautam Shah, & Simon Schoon


1 Bret Kinsella, “U.S. Smart Speaker Ownership Rises 40% in 2018 to 66.4 Million and Amazon Echo Maintains Market Share Lead Says New Report From Voicebot,” Voicebot.ai, March 7, 2019, https://voicebot.ai/2019/03/07/u-s-smart-speaker-ownership-rises-40-in-2018-to-66-4-million-and-amazon-echo-maintains-market-share-lead-says-new-report-from-voicebot.

2 Gartner, https://www.gartner.com/document/3953723?ref=solrAll&refval=232991575&qid=45139abfeb9b8baf1dff49e8.

3 Gartner, https://www.gartner.com/en/documents/3953723/market-guide-for-conversational-platforms.


Human capital leadership in M&A: Lessons learned from third annual Human Capital DealMakers Event

Posted by Danielle Feinblum, Cliff Mansfield, Grant Listek, Stephanie Miragliotta, and Claire Logan on February 18, 2019.
No matter the size, industry, or location, every deal comes with great challenges and even greater learnings. What if you had the chance to hear from peers across industries about the creative solutions that led to success or steps they wouldn’t take again in retrospect? Deloitte’s1 third annual Human Capital DealMakers Event brought together 29 HR M&A leaders to share their experiences, discuss current challenges across the M&A life cycle, learn about recent trends, and network with one another to establish valuable connections for the future. Continue reading “Human capital leadership in M&A: Lessons learned from third annual Human Capital DealMakers Event”

Transforming performance management? Part 3: Invest for success

Part 3 of a 3-part series

Posted by Joan Goodwin, Diane Morris, Greg Scott, and Josh Davis on Febuary 06, 2019.
The pressure is on. Many organizations are realizing their performance management approaches aren’t suitable for the new realities of work and certainly aren’t agile enough to meet future needs. In fact, as reported in a recent Human Capital Trends, 79 percent of executives rate redesigning performance management a high priority, with 38 percent calling the problem “very important.” Continue reading “Transforming performance management? Part 3: Invest for success”

Elevating the workforce experience: The digital lens

Posted by Maribeth Sivak, Jennifer Rome, Gabe Stavsky, and Jannine Zucker on February 04, 2019.
For a while now, the digital experience in people’s personal lives has long surpassed their digital experience at work. We’re able to connect with others and share ideas quicker than ever (social media platforms). We have access to information and content anytime, anywhere (mobile, tablets, smartwatches). And there are an abundance of intuitive self-service applications and tools that make our lives simpler and easier every day. Individuals have now come to expect the same superior, high-touch experience at work as they do in their personal lives. According to Salesforce research, 71 percent of employees want the same level of technology at work—simple, intuitive, and easy—as they have in their personal lives.1 Continue reading “Elevating the workforce experience: The digital lens”

Sharpen your 2020 communications strategy with a simple New Year’s resolution

Posted by Melissa Yim, Heather Shaw, and De’ Shonda Burton on January 31, 2020.

It’s January, and we’re starting another year in a brand new decade. Like many of you, I’ve made some personal resolutions, but I also like to include professional resolutions. A few years ago, I resolved to use internal communications as a way of creating meaningful connections between employees and the organization. I didn’t know how to begin, so I ended up abandoning the goal and becoming one of the millions of people who give up on their New Year’s resolutions. That did not sit well with me, so I took some time to determine what went wrong. I quickly realized my original goal had been too broad, and if I wanted to be successful with my communications resolution, I needed to simplify my approach. My solution? Ask these simple questions. Continue reading “Sharpen your 2020 communications strategy with a simple New Year’s resolution”

Defining TA’s Future: Partnerships, Paradigms, and Possibilities

Posted by Denise Moulton and Tim Davis on January 31, 2019.

Bersin’s most recent High-Impact Talent Acquisition study1 found that high-performing talent acquisition (TA) functions are building the workforce of the future through deep integration with the business, a strong focus on relationships, experimenting with technology, and reinforcing the organization’s people culture. However, many TA functions continue to operate in isolation, often lacking a connection to or an influence on business strategy.

Continue reading “Defining TA’s Future: Partnerships, Paradigms, and Possibilities”