Monday, November 23, 2015

The Times They Are A-Changin'

Come gather 'round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You'll be drenched to the bone
If your time to you
Is worth savin'
Then you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'.

                     -- From Bob Dylan's "The Times They Are A-Changin'"

Spent some time with more really smart folks at Oracle last week.  Yeah, this people are really smart...I'm still wondering how they let me in the door.

During that time, I probably had three separate conversations with different people on how SaaS changes the consulting model.  Frankly, implementation is no longer a big money maker in the SaaS game.  The combination of reducing the technology overhead, reducing customizations, and a sharp focus on customer success is killing the IT consulting goose that lays the golden eggs:  application implementation.  You can see indications of it just in the average cycle times between subscription and go-live:  they're down to about 4.5 months and still on a down trend.  Bringing SaaS customers up in less than 30 days is something Oracle can see on the near horizon.  Unfortunately, as the cycle times for SaaS implementations shortens, it gets more difficult for an implementation partner to generate significant revenues and margins.  The entire model is built around 12-t0-24 month implementations - SaaS make those time frames a thing of the past.

So, if I were a SaaS implementation partner today, what would I do?  Frankly, I'd be switching to a relationship - retainer approach with my customers (not my idea...all those smart people I mentioned suggested it).  I'd dedicate teams that would implement SaaS, extend SaaS functionality, test new upgrades prior to rollout, and maintain your SaaS apps.  I'd build a relationship with those customers rather than simply attempt to sell implementation services.  The value to customers?  Your workforce focuses on the business rather than the software.  You need new reports or business intelligence?  Covered in our agreement.  Test this new release before we upgrade our production instance?  Covered in our agreement.  Some new fields on a user page or an add-on business process?  Covered in our agreement.  Something not working?  Let my team deal with Oracle Support...covered in our agreement.

Other ideas?  The comments await.

The times they are a-changin'...quickly.  Better start swimmin'.


MilesT said...

Agree with your points.

There is still a big chunk of time needed to do the initial business analysis and fit/gap to understand what processes need to change to get going, then designing the business change and training, and delivery of business change. And monitoring of the change over time to check the change has embedded (and if not, why not) See a theme here?

The bigger the enterprise taking a cloud system, the bigger the business change (more people). Some scope for consultancies to build their own IP in terms of deliver approaches and training courses that can be tailored to the client.

And then once the basic parts of the system are in, working out how to better exploit the new system and refining the process.

Some of this will be classic Lean six Sigma work (wandering round the DMAIC loop a few times), some more evolutionary (delivering completely new process subject areas).

In terms of technical work, data conversion is king. Followed by cloud to cloud and cloud to on premises integration for enterprises that take a best of breed approach.

I think there is also scope for consultancies help new businesses to get off the ground with their back office processes and some line of business processes covered by cloud systems. Basically help run parts of the business with consultants and cloud systems until the business can hire their own staff into the roles with the same systems. Next-gen Business Process Outsourcing if you like, with a easy exit, paid for as a monthly fee for the people on top of the system or an equity stake for a few initial years of support. Just what the next "Unicorn" needs.

Tim Warner said...

Floyd, absolutely agree. It's been our approach at Certus Solutions since day 1. We have many such agreements with customers and are looking to engage many more. Strangely, many customers still insist on a conventional RFP process which makes it difficult to respond to anything other than the implementation itself. However, slowly, this is changing. Or should I say "a-changing".



John Faucher said...

Great post Floyd - you have a solid grasp on the cloud evolution and it is always a pleasure to read your posts. As I was finishing your post and read your advice, "Better start swimmin", it made me pause. As a former swimmer and a guy that lives my life with analogies, I thought - YES - start swimmin, but make sure you are swimming in the right direction and in the right lane. The swim lane make me think of a great presentation that I saw at OOW 15, that detailed the customers life in the cloud. The life in the cloud starts with a decision and commitment to move a certain part of your business into the cloud and choose a cloud solution (everyone choose Oracle please - public disclaimer - I own Oracle stock). Your next chapter as a consumer, in your life in the cloud, is the implementation, and you hit this right on the head with your excellent post Shorter duration, narrow scope, sprints versus marathons as you continue your stroke in the swim lane that is the cloud. There are still three more chapters in your life in the cloud, if you want to realize the gold, and realize the business benefits that drove you to make that move to the cloud. The three remaining chapters are Embrace / Adoption, Enhanced Value, and finally Sustained Value. If you stop swimming after the implementation, you lose the race and any chance of fortune and fame as a swimmer or cloud champion. There are many tasks that fall within the remaining three chapters, and if you are not aware and focused on those tasks before you jump into the pool, your risk of drowning increases dramatically. Your post points towards a making sure, as cloud advocates and folks task with leading clients on their journey into and through the cloud, that focus and customer services are planned for and provided not only during the implementation, but through all chapters in the clients cloud transformation. The old days are gone, and I welcome the refreshing approach that true cloud solutions providers share knowledge and allow customers to be very successful in the cloud - did I say choose Oracle Cloud - yes they really do have the best solutions. Swim on my friend - thanks again for your post.

Gustavo Gonzalez Figueroa said...

Floyd, great post.
I think that it is a change that all the organizations that are in the implementation business are shifting -sooner or later- towards the new paradigm of cloud.
When we started talking about Fusion many years ago -2010- and the new way of setting up the application through FSM, we started to realize that the change was coming and it was a matter of adoption, security and when everyone would start to feel comfortable with having the investment and data somewhere else -right, let me say the word again, "Cloud".
Revenue-wise for implementation partners, the business should be expanded to other areas -rather than just implementation- as you said, but it is very important to mention that the methodologies and best practices must be inherited into this new cloud-world and that would make a big difference for companies that have done similar work with different tools.