What SaaS transformation means for your IT operating model: Part Two

As software as a service (SaaS) moves into the mainstream, revolutionizing how businesses run, a paradigm shift for IT operating models is in the works.

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Jay Yuno

As software as a service (SaaS) moves into the mainstream, revolutionizing how businesses run, a paradigm shift for IT operating models is in the works. Organizations must navigate significant changes, moving from relatively lengthy, IT controlled software releases to automatic vendor controlled software releases; from fixed resources to flexible, scalable support; from traditional in-house roles to shared roles with software vendors; from total technology control to focusing on process and functions; and from IT-led customization to business-led configuration.

In order to make a smooth transition with any SaaS implementation, there are a variety of new operational capabilities that have to be mature by the time the software goes live, says Barry Brunsman, principal in KPMG's CIO Advisory practice and leader of the U.S. IT Strategy l practice.

“The new software support approach has to be ready to work the way it is supposed to work on Day 1, or else it can be very disruptive and expensive,” Brunsman explains. “You don’t have a two-year period after go-live in which you can figure it out.”

Joe VanLoy, Advisory director at KPMG, adds that organizations have to come to terms with what changes need to happen in their IT operating model. 

“Clients often have this ‘uh-oh’ moment,” he explains. “They overlook what it takes to get there and live with something as fundamentally different as SaaS.”

While specific needs may vary depending on the SaaS implementation, the laundry list of capabilities required to be mature by go-live is long and complex. There are issues related to IT security and risk, including new audit and compliance controls, updating cybersecurity strategies, and refining IT risk management strategies. Data management and governance have to be reimagined to support new rules and processes. New talent management strategies need to be implemented, with new roles and responsibilities defined by HR, and the shift to SaaS requires a rethinking of training budgets. 

A host of factors also need to be evaluated in order to understand the number of personnel required to deliver the newly mature capabilities. For instance, what is the skill level and capacity of existing resources? What siloed functions exist that increase complexity and number of roles? What level of automation will exist for support processes and procedures?

To ensure an effective SaaS go-live, say Brunsman and VanLoy, organizations should identify high-priority capabilities based on potential risk, such as security, risk/compliance, service delivery, and app support. Next, they should develop an approach to accelerate maturity on high-priority areas, such as process definition, KPI development, job description changes, SLA updates, and training. Finally, it’s time for pilot implementation.

“The impact on the IT operating model when transforming with SaaS goes far beyond wrestling with roles and responsibilities,” says Brunsman. “It’s about changing the processes and the way of working—developing the operational capabilities to manage this massive paradigm shift, so you understand where you need to be by the time you have to go live.”

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