Introduction
On November 20, 2024, in a presentation to Tech CEO’s, Gartner identified the future of business software to be Service – As – Software (SaS). It reflects an entirely new approach that respects the critical elements of your company that are truly unique: Product/Services, Operations and Business model.
This blog was written at Dr. Muddassir Ahmed’s request. In a recent post he was discussing the challenges of integrating enterprise supply chain software: https://www.linkedin.com/posts/muddassirism_the-hidden-truth-about-enterprise-supply-activity-7264198668285566977-Z7e_?utm_source=share&utm_medium=member_desktop),
To which I replied:
Dr. Ahmed asked if I’d care to expand on the design deploy portion of my response.
Legacy SaaS is pre-built supply chain software that requires compromise and coercion.
Because the software was already designed (pre-built), deploying it requires you compromise how your business runs and coerce employees to the new approach. Unnecessarily raising risk, cost and time required, often with unknown results/value.
SaS Flips the Script on SaaS
With SaaS, the struggle doesn’t end when you’ve gone live. Wait a few months/quarters and your business model will change. You then either redeploy or you go offline with tribal knowledge and spreadsheets. Most companies do not re-deploy and continue on for years/decades misaligned between the business and their software.
SaS eliminates legacy compromise and coercion by letting company subject matter experts (SME) design, in just a few hours, how the software works to fit their business and then deploy the solution with virtually no employee training. Because the employees designed the software, they already know how it works. Dramatically reducing the risk, cost and time required, enabling you to go-live faster and validate the actual results/value before taking on legacy system integration.
Using the Blue Ocean Strategy Canvas framework, we can make comparisons of SaaS v. SaS on multiple factors that, I feel, reveals the reason SaaS never really worked. I’m old enough to have been installing traditional on-premises supply chain software as SaaS came into existence.
The dirty little secret of supply chain SaaS is that it is the exact same software that you could/can buy on-premises. In other words, they took the exact same product, divided the one time traditional license fee + annual support costs by 3, added in fees for the computing resources, and created their SaaS price list. Years 4+ were just gravy to them.
Time
Employees are overburdened by keeping your business running. No company can afford to divert focus to implement ill-fitting software. Time measures how much SMEs spend on implementation, including meetings, documentation, requirement gathering, status reports, configuration review, testing, and change management.
• SaaS demands significant time, often beyond a 10 on the strategy canvas scale. Operations SMEs, crucial to daily tasks, lack this time. Companies hire hourly-paid consultants, adding time for knowledge transfer. Poor fit requires Operations SMEs to negotiate compromises. SaaS implementations can take 9-18 months and hundreds of hours.
• SaS requires the least amount of time from SMEs. The SME already knows the process and can draw a picture on a whiteboard of the workflow in a couple of hours. Typically, they already work with the required data, offline in a spreadsheet, so they can source and test the solution quickly. Project implementation can take 1 – 2 weeks and less than 10 SME hours.
Cost
Time is money. The time SMEs spend away from their jobs adds to costs, often overlooked due to salaried positions. Cost includes licensing, implementation, and support expenses. SaaS solutions may need external resources for implementation and support, increasing overall costs when SMEs can't keep up.
• SaaS requires the highest cost, often beyond the 10 on the strategy canvas scale. It is common that total costs to implement a SaaS solution can be 7 figures with mid 6 figure annual support cost.
• SaS is less expensive than SaaS, due in part to the lower Time required to implement. SaS also provides you with fixed costs to design and deploy only the service as software your business needs, charging a pay-as-you-go subscription cost per use after you go live. The cost to implement a SaS solution can be implemented for low to mid 6 figures with mid 5 – low 6 figure use charges.
Fit
Your business is unique, and 'best practices' often mean compromise. Fit combines process, data, and logic. When software fits your needs, no one has to compromise on their work. Poor fit leads to workarounds and operational gaps, filled with offline spreadsheets and tribal knowledge.
• SaaS has a low fit because the entire premise is compromise. The process, data and logic are all pre-built and you either compromise your needs or you pay really high customization fees to get what you need. Which of course, contributes to more Time and Cost.
• SaS achieve 100% fit because the solution was built to be trained by the SMEs. SaS vendors aid SMEs to identify/design exactly how the process, data and logic should work, including the situational awareness that exceptions require as a normal course of business. In just a few hours, contributing to less Time overall, SMEs can design the workflow their business/operations/products require.
Productivity
Improving productivity boosts gross or net margins, enhancing profitability and competitiveness. Your supply chain is crucial to your business model, with time and cost as key metrics. Productivity measures resource efficiency, essential for managing throughput, staying ahead of inflation, and handling increased volumes or rising labor costs
• SaaS productivity is average, reflecting the fit and compromises needed. Even post-implementation, operational gaps exist where the system doesn't fully support workers, slowing them down. Productivity suffers as workers go offline to complete tasks and then report back to the SaaS solution.
• SaS is the most productive. SaS was designed by your SMEs to create digital workforce assistants that make the job easier, faster and better. When combined with a control panel, SaS provides the overview necessary to make sure everyone knows what is happening, now. Customers achieve as much as an 80% gain in productivity in a matter of days.
Accuracy
Accuracy ensures the right product, place, and time. Uncertain inventory or order status undermines confidence in meeting commitments. Software accuracy prevents mistakes and maintains an audit trail, boosting productivity and aiding performance monitoring, compliance, and quality control.
• SaaS accuracy is slightly above the middle of the pack. This reflects the degree of Fit as well as the operational gaps exposed in Productivity. These same gaps also increase the amount of coercion/Training required to make sure workers do what is expected without making mistakes.
• SaS is the most accurate because it was designed by your SMEs to not let a worker make a mistake while recording a full digital breadcrumb that includes which worker performed which task for which reason and where they were standing (lat/long) as they did the job.
Agility
The past years have shown the need for agility in supply chains. Business models must adapt to new products, channels, and customers. Agility measures how well solutions adjust to changes, preventing operational gaps and ensuring fit, productivity, and accuracy.
• SaaS is effectively rigid. Changing how the solution operates requires redeployment of the original configuration and functionality and we’ve already highlighted the fit, time, and cost issues. Companies tend to implement a SaaS solution once and then it immediately begins to fall out of alignment with their business needs each passing month/year.
• SaS was made to be agile. Unlike SaaS, SMEs get to quickly design SaS in a matter of hours to fit the needs of today. SaS has a built-in advantage because it has already decoupled process, data and logic. Allowing smaller, incremental changes to existing workflows as easily as creating entirely new solutions to meet new requirements. The highest degree of fit, lowest time and availability of expert resources gives SaS the highest agility rating.
Training
Often the most difficult part of any implementation is where you have to coerce your employees to do their jobs differently. Since these workers are already working, it can be difficult to schedule time, and the time elapsed between training and go-live can exacerbate the issue.
• SaaS has the highest training required because it has the worst fit. The process of these solutions often bears no resemblance to the vernacular or method of how things used to be, and so extensive training is required.
• SaS requires virtually no training because the workers trained the software and train themselves in a matter of minutes. SaS workflows are a series of questions that the worker must answer. If the answer they give doesn’t match the data and the logic applied to each question, the worker can’t proceed, and the next question will not be asked. Changes to workflows become apparent as soon as the question pops up on their screen.
Recommendations
Gartner laid out a migration plan for legacy SaaS (foundational model) in the image below. While most legacy software can provide consistently good answers, they lack the remaining needs because their pre-built process, data and logic do not fit the needs of the business.
My recommendation, and the path we (Know What’s In The Box) have been fortunate to take for years, is look for a SaS solution that was built from scratch. Use it to augment your legacy solution. Maintain what you have to avoid the risk/cost/time/disruption/etc. of migrating a solution built for another time.
