Tag: SaaS

How to Optimize Your Software Spend and Save Money | LinkedIn Live


How to Optimize Your Software Spend and Save Money

View the event on LinkedIn, which was delivered live on Wednesday, July 5, 2023.

Spending on software licenses and SaaS-based products constitutes a significant portion of an enterprise’s IT budget 💰. Now more than ever, it is imperative to understand the best practices enterprises can take to optimise ⚖️ their software spend yet maintain functions and user experience.

📢 📢 In this LinkedIn Live, we will discuss how you can start reducing your outflow on software and the prevalence of reusable software licenses. We will share valuable💱 insights and practical strategies to achieve just that, in particular, in the European region.

What questions will the event address?

✅ What are best practices for enterprises of any size and from any industry to optimise their spend on software?
✅ What is reusable software? Is it compliant with the usage law? How can enterprises leverage it to reduce their software spend?
✅ Why is it important to discuss software spend optimisation?

Meet The Presenters

Lennart Martens
Head of Sales Europe | PREO Software AG

How Enterprises Can Achieve Full Value from ServiceNow Investments | Blog

In response to changing market demands, ServiceNow has expanded its platform over the past two years, from primarily managing IT workflows to providing full enterprise solutions. Read on to learn the best practices from industry leaders to ensure your greatest return from ServiceNow investments.   

Since our inaugural ServiceNow Services PEAK Matrix Assessment in 2020, the software company has significantly expanded its portfolio to go beyond IT Service Management (ITSM) to new offerings that help clients drive business growth, increase resilience, and enhance employee productivity.

Our recently published second edition of the assessment found about 65% of enterprises are exploring scaling up ServiceNow investments for end-to-end process modernization. CIOs who have upgraded their IT workflow on ServiceNow are now looking to transform business processes and integrate the platform with existing systems of record, engagement, and intelligence.

Based on our interactions with industry leaders, we recommend enterprises consider the following factors when seeking to modernize their business processes with ServiceNow:

  1. Shift away from IT to business Key Performance Indicators (KPIs)

The watermelon effect of KPIs in ITSM is not new. Over the past two years, we have addressed several situations where ServiceNow clients struggled with having all the metrics look green on the outside but are red on the inside.

The reason often is two-fold – tracking irrelevant metrics and overreliance on IT metrics. Enterprises need to track relevant metrics closely tied to business outcomes while being aware of the pitfalls in measuring these metrics.

ServiceNow customers are tracking business KPIs such as customer experience, reduction in touchpoints, percentage of issues resolved by self-healing, and cost efficiency. Leading service partners are proactively collaborating with customers to course correct and update KPIs and tracking methods during quarterly and mid-year reviews.

  1. Minimize customization

Early adopters leveraged ServiceNow to make custom applications and create a final product that mimicked organizational processes. These solutions were developed on the go to meet demand. As ServiceNow continues to push new and improved versions, it has become very difficult and costly for these customers to make updates due to the huge technical debt.

Clients that adopted ServiceNow largely out-of-box are more agile and tend to benefit from improved processes. Enterprises should modernize their processes to fit the standard offerings and minimize customization or wait for the offerings to sufficiently mature before investing.

  1. Select the right transformation partner

We think Albert Einstein’s famous statement, “The definition of insanity is doing the same thing over and over and expecting different results,” unfortunately, applies here. Most enterprises need qualified staff to help guide and manage the project over multiple years. They also need to deal with unplanned turnover, the ServiceNow talent gap, inflexible contracts that don’t allow for strategy changes, ever-shrinking budgets, and, last but not least, the desire to have measurable outcomes. But often, enterprises end up using the same vendor selection and RFP processes without taking these factors into account.

Leading enterprises have not only updated their vendor selection methods but also have started planning for attrition, contractual flexibility, and outcome accountability right at the beginning of the engagement.

Large enterprises now are more open to engaging with specialist ServiceNow partners for module-specific requirements, especially for non-ITSM products such as Human Resources Service Delivery (HRSD), Customer Service Management (CSM), and Governance, Risk, and Compliance (GRC). This is mainly owing to the specialized focus and right mix of flexibility and agility that large Global System Integrators (GSIs) often fail to offer.

We are closely tracking demand and supply-side developments in ServiceNow. For more insights, see our report, ServiceNow Services PEAK Matrix Assessment 2022, which sheds light on the ServiceNow partner ecosystem.

We would like to hear your thoughts on your ServiceNow investments and the growing adoption of innovative operating models to achieve business outcomes. Please reach out to us at [email protected] and [email protected].

You ca also find out What’s Ahead After a Decade of Digital Transformation in this webinar as we share perspectives on what’s in store for the digital transformation industry.

Cloud IaaS Versus SaaS: The Fight for Industry Cloud | Blog

A blog I wrote last year discussed the ugly market share war among the three top cloud infrastructure providers – Amazon Web Services (AWS), Microsoft Azure (Azure), and Google Cloud Platform (GCP.) Now we need to talk about how Independent Software Vendors (ISVs) like Oracle, Salesforce, and SAP are changing the battle with their industry-specific clouds.

Cloud IaaS vendors don’t have an industry cloud

The fact is that AWS, Azure, and GCP don’t really have industry clouds. These cloud IaaS vendors enable clients to run business applications and services on top of their cloud platforms, but haven’t built industry-specific application or process capabilities. They acknowledge that their clients want to focus more on building applications than infrastructure, which defeats their positioning in the industry cloud market. The core of what they offer is compute, data, ML/AI, business continuity, and security, and they rely on technology and service partners to build industry-relevant solutions. For example, GCP partnered with Deloitte for cloud-based retail forecasting, and AWS joined with Merck and Accenture for a medicine platform. They are also partnering with core business application vendors such as Cerner and Temenos.

Cloud SaaS providers have an edge

ISVs have continued to expand their industry cloud offerings over the past few years. For example, in 2016 Oracle acquired Textura, a leading provider of construction contracts and payment management cloud services, SAP introduced its manufacturing cloud in 2018, and in 2019 Salesforce launched its CPG and manufacturing clouds. Further, Oracle and SAP have built solutions for specific industries such as retail, healthcare, and banking by focusing on their core capability of ERP, supply chain management, data analytics, and customer experience. And while SFDC is still largely an experience-centric firm, it is now building customer experience, marketing, and services offerings tailored to specific industries.

So, what will happen going forward?

  • Industry cloud will change: Today’s industry clouds are one more way of running a client’s business; however, they are still not business platforms. Going forward, industry clouds will become something like a big IT park where clients, partners, and other third parties come to a common platform to serve customers. It will be as much about data exchange among ecosystem players as it is about closed wall operations. Enterprises in that industry can take advantage of specific features they deem appropriate rather than building their own. And, they will become a “tenant” of the industry cloud vendor’s or ISV’s platform.
  • Cloud vendors will heavily push industry cloud: AWS, Azure, and GCP will push their versions of industry cloud in 2020 and beyond, with strong marketing and commercial campaigns. They’ll likely be tweaking their existing offerings and creating wrappers around their existing services to give them an industry flavor. But, of course, the leading ISVs have already launched their industry clouds and will expand them going forward.
  • Channel push will increase: Both the cloud infrastructure service providers and the ISVs will aggressively push their service partners – especially consulting firms like Accenture, Capgemini, Deloitte, and PwC. The cloud vendors will also push their technology partners to build solutions or “exclusively” migrate applications onto their clouds.
  • Mega acquisitions: Historically, there hasn’t been any major acquisition activity between infrastructure providers and large software companies. But one of the top infrastructure providers might acquire a “horizontal” ISV that’s making inroads into industry clouds, like Salesforce or Workday, rather than buying a vertical industry ISV. Disclaimer: I am not at all suggesting than any such acquisition is in the cards!

So, what should enterprises do?

  • Be flexible: Enterprises need to closely monitor this rapidly evolving market. Though the paths IaaS providers and ISVs take may not meaningfully conflict in the near future, there may be stranger partnerships on the horizon, and enterprises need to be flexible to take advantage of them.
  • Be cautious: Because the cloud vendors’ channel partners are being pushed to sell their industry cloud offerings, enterprises need to fully evaluate them and their relevance to their businesses. Their evaluation should include not only business, technical, and functional, but also licensing rationalization, discount discussions, and talent availability for these platforms.
  • Be open: As the market disrupts and newer leaders and offerings emerge, enterprises need to be open to reevaluating their technology landscape to adopt the best-in-class solution for their businesses. This is as much about an open mindset as it is about internal processes around application development, delivery, and operations. Enterprise processes and people need to be open enough to incorporate newer industry solutions.

What do you think about industry clouds? Please share with me at [email protected].

Digital Transformation Reveals Limitations Of Software Packages And SaaS | Sherpas in Blue Shirts

Most large enterprises were on a journey for the past 30 years where a higher and higher proportion of the core systems driving the enterprises was software packages or software as a service. Traditional wisdom for companies was “don’t build – buy.” Then, again, as companies undertook digital transformation journeys, the prevailing belief was that the best way to do digital transformation is to get there as fast as possible by buying (not building) many components, using third-party software and SaaS products. Now, two disruptive forces are starting to shift the balance between build vs. buy in the IT world.

Read more in my blog on Forbes

Learn more about our digital transformation analyses

It’s getting crowded in here: leveraging crowdsourcing for app delivery | In the News

As the application services industry has evolved and grown over the last three decades, the technology ecosystem has expanded to comprise companies delivering applications across SaaS, traditional license, and open source models. Everest Group believes that, with digitalization as a strategic enterprise priority, the application services industry is on the cusp of another disruption, one that cannot be addressed using traditional app delivery methods.

Read more in Intelligent Sourcing

80 Percent of Enterprises are Well Along the Road to SaaS Adoption, with Many Relying on Service Providers to Guide Adoption Journey | Press Release

Accenture and Deloitte are named Leaders in Everest Group PEAK Matrix™ list of top IT service providers in SaaS implementation market

Enterprises are seeking newer mechanisms to consume and provide software to their end-users. Consequently, consumption-based models such as Software-as-a-Service (SaaS) have mushroomed in recent years. According to research conducted by Everest Group, over 80 percent of enterprises have either piloted adoption or already adopted SaaS solutions. These high adoption trends suggest SaaS is no longer a fringe construct. Rather, it has become a prime investment focus for enterprises.

“Though we would expect mega enterprises to constitute the largest proportion of deals, the smaller enterprises take up that mantle,” said Chirajeet Sengupta, vice president at Everest Group. “As-a-Service models are compelling to businesses of all sizes, because they offer access to enterprise-class technology in flexible consumption models, in line with business fluctuations.”

Everest Group also found that traditional technology providers are aggressively adapting their business models to maintain dominant market share, with Oracle, SAP and Microsoft representing a combined 69 percent of SaaS deals.

Despite assumptions that SaaS is easy to deploy, enterprises often find the opposite to be true. SaaS adoption can be plagued with challenges such as vendor risks, integration challenges with legacy systems, security issues, privacy concerns, hesitancy to use shared technology, and problems with network availability, latency and bandwidth.

As a result, system integrators are playing an integral part in this adoption journey, by helping enterprises integrate and deploy SaaS products. In fact, nearly 42 percent of revenue among service providers for SaaS engagements is for consulting and customization.

Everest Group profiles ten leading IT service providers in the SaaS implementation services space in a PEAK Matrix™ report. Accenture and Deloitte are named as Leaders; Capgemini, Cognizant, HCL, Infosys, TCS and Wipro are identified as Major Contenders; and Dell Services and L&T Infotech are categorized as Aspirants.

***Download Complimentary 4-page PEAK Matrix™ Preview Here***

Insights into each provider’s vision, major services portfolio, key solutions, and recent investments in the domain as well as additional research findings about the SaaS implementation services market are described in “SaaS Implementation Services – Market Trends and PEAK Matrix™ Assessment & Profiles Compendium.” A preview report is available for complimentary download here.

About the PEAK Matrix™

The Everest Group PEAK Matrix is a proprietary framework for assessing the relative market success and overall capability of service providers based on Performance, Experiences, Ability and Knowledge. Each service provider is comparatively assessed on two dimensions: market success and delivery capabilities. The resulting matrix categorizes service providers as Leaders, Major Contenders, and Aspirants. Companies that demonstrate strong upward movement in successive reports are recognized as Star Performers. Everest Group recently announced a recalibrated methodology, in which innovation, intellectual property and technology take center stage.

In SaaS We Trust (or May be Not) | Sherpas in Blue Shirts

Although Software as a Service (SaaS) has become widely adopted, some organizations’ application management practices have not changed to reflect this.

All too often enterprise SaaS upgrades are handled in the same way as on-site software. Risk averse enterprises tend to rely on their IT service providers and their methodologies to support a mix of on-site and SaaS applications. The methodology is often the same for both types of software: The ITS provider lines up staff, according to its traditional application management strategies; one to oversee the upgrade, another to do impact assessments, another to fix issues on the day and so on. Before you know it, you have a team of half a dozen people lined up to help with the SaaS upgrade. In the meantime, the upgrade gets done remotely overnight by the SaaS software provider who has automated a large part of the process. It is not unusual for the on-site ITS team members to sit there looking embarrassed while twiddling their thumbs.

This is not to say that SaaS clients should throw caution to the wind and rely 100% on the SaaS providers’ best efforts. Instead they need to revisit best practices and follow upgrade strategies that fit the SaaS model. This should result in a reduction in the effort to oversee an enterprise SaaS upgrade by more than 50%.

Cloud and SaaS have had a huge impact on the ITS market already. This is evident by the reducing size of contracts. With increasing automation in the cloud, this trend is set to continue. The more adaptive of organizations will be reaping cost reduction benefits well ahead of those who stick to older approaches for managing their applications. The question to ask yourself: Is your organization stuck in tradition or adapting for its benefit?

The Empire Strikes Back in the Services World | Sherpas in Blue Shirts

I’ve been blogging about the changing world of services and how the growth is in the SaaS and BPaaS space. However, capturing SaaS and BPaaS opportunities is incredibly frustrating for large service providers, especially incumbents. Their efforts to win these deals often end up like David defeating Goliath.

That’s because, for the most part, customers select the new players in the SaaS and BPaaS space, like Salesforce and ServiceNow, instead of existing providers. This is similar to where we were in the dot-com era with startups threatening to sweep away the traditional players. Why is this happening?

Two frustrating challenges for providers

First, SaaS and BPaaS tend to originate in SMB markets, which is not where the revenue is for the large incumbent service providers; large enterprises adopt SaaS and BPaaS as point solutions. As point solutions, SaaS and BPaaS hold relatively modest opportunities for large providers’ growth and revenue.

Secondly, SaaS and BPaaS offerings are based on a different business model. The as-a-service business model requires a complete rethink of traditional service providers’ delivery systems. This forces providers to move to either a multitenant environment with all the implicit change management issues for clients, or to an automated vehicle that is likely still in the early stage.

Like the Star Wars movie saga, the empire will strike back

At Everest Group, we believe that now, as happened in the dot-com era, the empire will strike back. We think the way this will happen is through switching to an Enterprise IT-as-a-Service model. Borrowing from the Star Wars movie, we believe the dominant providers will strike back and reassert their role in services.

Instead of coming at IT services from a point solution and multitenant environment like SaaS and BPaaS, Enterprise IT-as-a-Service moves the entire service supply chain, component by component, into an as-a-service model. Rather than trying to have the entire supply chain operate on a single platform, it allows enterprises to migrate the individual components – data center, platform, talent factory, software licensing, etc. – into a supply chain model with components aligned with service lines.

Not all providers will be able to make this change, but those that do will be able to flourish and reignite their growth. The Enterprise IT-as-a-Service model favors large incumbent providers over startup SaaS and BPaaS providers.

SaaS models are most robust in SMBs. In the large enterprise, they manifest as point solutions, thus breaking the Dillinger principle – you rob banks because that’s where the money is. Service providers go after large deals in large enterprises because that’s where the money is.

Increasingly, the investment thesis on Wall Street favors the SaaS and BPaaS providers and rewards them with higher valuations because of their potential to disrupt industries. But we think the empire has a good chance of striking back. Traditional providers’ existing knowledge of the enterprise environment and ability to orchestrate the entire supply chain through the Enterprise IT-as-a-Service model will be favored over the SaaS and BPaaS players entering the market.

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