At the onset of the pandemic, a lot of software buying decisions were put on freeze, ongoing implementations had huge scope changes, and enterprise software needs dramatically shifted towards the cloud and SaaS.
Executives who are responsible for their organizations’ enterprise platform services are well aware of the disruption caused by the COVID-19 crisis. Here are three things that happened in 2020 that were not so normal.
- Accelerated project timelines – At the beginning of 2021, UPS rolled out ServiceNow ITSM globally in 27 weeks; in a normal year, a project of this scale would have taken at least two years. While greenfield rollouts were few, there was a massive jump in projects that were incremental in nature, often related to platform modernization, new module implementation, and functionality improvement. The delivery timelines for these projects also drastically improved, in some cases up to three times faster, especially in verticals such as retail, healthcare, and manufacturing.
- Shift from high on-premise to 100 percent remote delivery – A global service provider signed and delivered a US$10 million+ engagement for S/4 HANA implementation across nine manufacturing locations, replacing two legacy ERP systems, all in just 11 months and all remotely. In 2020, we saw multiple such examples where going from RFP to blueprinting to go-live and subsequent improvements happened in a complete remote model. For an industry that had historically emphasized on delivery teams to be on-premise, this was a huge shift.
- Scope changes on the fly – Enterprise platform service deals typically have many scope changes simply due to their scale and the impact they have on business processes. These scope changes normally lead to enterprises’ dissatisfaction as service partners are not flexible with all the changes. While in 2019 ~25 percent of enterprises ended up meaningfully changing the scope during the entire course of platform implementation, this number jumped to ~60 percent in 2020.
Doing the above three things while maintaining the quality of delivery is nowhere close to normal. Our research suggests a 27 percent y/y improvement in average CSAT scores for enterprise platform services delivered in 2020, which is a testament to the fact that service partners and technology vendors did an amazing job of meeting enterprise expectations. (Based on feedback from 88 enterprises in CY2020 and 70 enterprises in CY2019, across multiple PEAK Matrix® assessments of enterprise platform services research.)
As we move out of the pandemic phase over the course of 2021, a lot of these not-so-normal things will not go back. That means enterprises will have a herculean task of ensuring that their service partners continue to meet their raised expectation bars and their future enterprise platform priorities. This makes the partner selection process critical.
Here are five things that enterprises should do when selecting their enterprise platform services partner in 2021:
- Evaluate remote delivery capability – Remote delivery is here to stay. While over the last year we saw some service providers doing an amazing job of implementing projects over Zoom calls using multiple tools and collaboration solutions, many others still have a steep learning curve ahead. Enterprises should look for service providers’ investment in repackaging disparate tools into a single offering, which improves the overall reliability of services. IBM’s Dynamic Delivery, TCS’s Location Independent Agile, and Wipro’s Agile Anywhere are a few examples.
- Check for talent with industry expertise – By virtue of multiple failed digital transformation initiatives, many enterprises have realized the importance of process modernization over just digital transformation. The increasing adoption of Pega and ServiceNow along with investments by other tech vendors such as Microsoft, Oracle, and SAP to build industry expertise into their software is a strong indication that having industry and process expertise from here on will be critical. In fact, in a recent work for a client on the need and urgency of industry- and function-specific talent, we discovered that 45 percent of enterprises regard it as vital, while 37 percent see it as good-to-have. Additionally, 66 percent of enterprises were willing to pay high price premiums for such talent. (Based on Everest Group research with 175 CXOs of enterprises with revenue > US$1 billion.)
- Evaluate integration competency – There is a huge difference between a go-live system and a system that is useful. With the increasing sprawl of SaaS, both internal and external integration has become a massive challenge for enterprises. For example, in our recently published Salesforce assessment, we found that almost 70 percent of enterprises struggle with integrating Salesforce with other applications and platforms within and outside the Salesforce ecosystem. Enterprise should look for service provider’s investment in building expertise and solutions that bridge this integration gap.
- Look for capabilities across the entire stack – Any cloud platform that is implemented today will double its functionality scope next year; Salesforce and ServiceNow are the best examples of this. Thus, enterprises need to have a long-term horizon and should not partner with a service provider that has a hard time keeping up with the selected tech vendor’s innovation and only has capabilities around the vendor’s product offerings.
- Ensure your service partner can be a thought partner – If there was one thing that this pandemic taught us regarding digital transformation, it would be that it is not only for the Walmart and Daimlers of the world; it is also for our local retail store and small-scale car manufacturing company. Thus, innovation is no longer a good to have or value-add in overall service delivery satisfaction…it is a must-have. Enterprises should evaluate if the service provider has processes that can systematize innovation even when delivering projects remotely.
What has been your experience with enterprise platforms and their service partners? Please share with me at [email protected].