The term shelfware is largely applied to the concept of purchased software that was never deployed or implemented in a manner to achieve the benefits and intended value of the investment. SaaS and software subscription vendors may have you believe that is not an issue with their offerings because “as a subscription” the service can ramp up and ramp down as needed to suit the business needs. The same can be said for IaaS/PaaS, but for the sake of this discussion I’ll keep the focus on SaaS/subscription.
Customers are preconditioned to envision the steady state use of software and the benefits that will be achieved, as that is what is necessary to justify the investment. What is often at issue are the SaaS/subscription vendors’ and customers’ failure to consider the lifecycle expenditure in ramping the service and as a result the urgency under which they should operate to achieve the intended goals.
There are many that are reading this now who would argue that they do not fall into this group, and you may not be wrong. However, your experience and approach are not universal, and it has been my observation, sorely missing at a large number of organizations.
While SaaS is essentially software as a subscription with services, it still requires integration into your organization’s technology stack and business processes all while typically billing at its full production rate. That is the trap and motivation for me to share my thoughts on this topic. This is not an issue for organizations that organically grow with a service but can be for those making an architectural leap in pursuing a transformative venture or switching from one offering to another.
Perhaps you’ve successfully executed a pilot and the decision has now been made to fully embrace, insert your SaaS/SW vendor’s name here, and perform a companywide rollout. Your organization has negotiated with the vendor, entered into a 3 year SaaS contract with an annual spend, and all seems good, but and this is where the issue occurs.
My argument is, a SaaS offering is shelfware both at the beginning or end of its lifecycle unless it is delivering on the goals intended. This is not new to software deployments but given the shift over the past decade from perpetual license sales to subscriptions and SaaS, the fiscal cost of time has increased 4x, which should drive some greater urgency.
Take for instance a $1,000,000 perpetual license sale which carries the typical 23% support costs. Each month’s delay equates to $6,388 in unrecouped expense. Going on the industry norm that a 3 year SaaS/subscription tends to equal a perpetual license sale, that same month’s delay is now costing the organization the equivalent of $27,777. That $21,000+ delta should drive more urgency, but surprisingly I’ve seen companies execute a contract at some deadline and then casually spend a quarter working through how they will go about the implementation process. This is costing the organization money, more now than ever, and why I am promoting the term “Zero Day Shelfware”.
My recommendations are not new to project planning, but SaaS does change some parameters and certainly the financial urgency.
- Execute a POC. SaaS does make performing POCs easier since infrastructure is not required. A small POC may be possible with a trial or pay as you go subscription. Larger POCs may benefit from special “POC Contracts” to get access to support and full feature functionality, if otherwise limited. Vendors do not typically lead with or offer POC Contracts, so investigate.
- Model the scale up/out over the time needed to support your goals and investigate if a stepped contract is available and best suits the organization’s growth requirements and cash flow.
- Model the implementation process.
- Identify integration points and develop a plan of attack to minimize complexity.
- Identify any ancillary tools needed and the expense associated with their use.
- Gauge the work effort to be performed and the skills needed. My colleagues and I have seen many SaaS projects initiated, followed by a 2-3 month delay before personnel were productively working on integration.
- Assign personnel and pre-train if possible. There is no need to learn while the contract meter is running.
- Identify resource gaps and how to address them.
- Draft hiring requirements and determine your organization’s ability and willingness to hire and include that in your decision making.
- Engage consultancies if resource demands can’t be met, are temporary, or skills can be better sourced under contract. Subject matter experts like to freelance so the best resource may be a consultant.
- Review compliance requirements and ensure the project does not run afoul of country, state or industry regulations or best practices. Although under a SaaS arrangement you are transferring data processing responsibilities to another party you remain the data controller and your compliance and legal obligations remain.
- Engage corporate counsel and review client contracts to ensure you are contractually free to pursue a SaaS arrangement. I’ve worked with an organization that discovered only shortly before pursuing SaaS, that contracts with their own clients restricted them from operating in a shared resource environment (i.e. public cloud).
The goal is to have all potential obstacles addressed and all technical and resource elements scoped and ready to be executed upon as a package, so implementation can begin immediately. In this fashion you can minimize the time your project is considered shelfware and ramping, versus complete and delivering on the goals of your organization.
Focus Technology Solutions has been working with clients for over 20 years to develop their technology roadmaps, execution strategies and perform platform rollouts. Of particular interest, as it relates to this topic, is our work in accelerating Data Integration, pipelines, secure transport, and warehousing in support of the application and business intelligence ecosystems, O365, cybersecurity and IT administration.
Please feel free to contact me at email@example.com if you would like to discuss how Focus may be able to help in your efforts.