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The economic slowdown in the US will increase outsourcing to countries like India and China.



3 Things You MUST Know in Order to Achieve Effective IT Adoption with SaaS  

By Chris Dowse, Founder & Chief Executive Officer, Neochange, Inc.

Effective IT Adoption may not be a familiar term. Essentially it is a proxy for business value and is characterized by the following attributes:
  • Core functionality that is measurably connected to business outcomes

  • A high percentage (85%+) of targeted users actively engaged with core functionality

  • Sufficient levels of high-quality data to provide actionable insights

In our work I’ve found that the majority of enterprise buyers believe that SaaS delivers faster, cheaper and higher rates of Effective IT Adoption than on-premise software. By logical extension they expect faster time-to-value and larger improvements in business performance. Both these expectations seem reasonable given the marketed advantages of SaaS: Faster deployments, lower implementation costs, simpler functionality and ubiquitous access.

But, back to Gartner’s prediction, are these expectations grounded in reality?
In short, I don’t think so. SaaS is likely heading for an Effective IT Adoption expectation gap because of one key assumption that enterprise buyers often make: the assumption that the software by itself can deliver Effective IT Adoption in complex business environments. Clearly, this assumption is unrealistic when you consider the collective social complexity and change capacity of hundreds or thousands of users. Imagine, the myriad of competing needs and interests that are typically associated with enterprise software deployments and then factor in the volume of competing initiatives that are concurrently in play.

Even so, like any expectation gap there are insights that, if understood and acted upon, can narrow the gap without the necessity of setting our sights too low. The following three insights are critical to closing this expectation gap and will enable enterprise buyers to capitalize on the strengths of SaaS to deliver significant business value.

Insight #1: The Adoption Process is Longer Than You Think
As early as the ’60s, studies of ‘technology’ adoption have concluded that there is an
organizational adoption process (see Figure 1) that, if followed, increases the likelihood of initiative success. Software initiatives that adhere to this process achieve faster and greater business value.
Unfortunately the majority of attention, and therefore investment, tends to focus on just one phase of this process – the implementation phase. This narrow approach is one of the key contributors to a lack of Effective IT Adoption. The following aspects of the process warrant further mention to broaden our focus.

Figure 1

I. Skipping the Readiness Phase Ironically Delays Time-to-Value
In our short-term centric world, many organizations skip the critical stage of aligning
commitment to a software-enabled change. In addition, little thought is given to the implications of process changes required or dictated by a software deployment. Ironically, the perceived up front time-savings are more than offset during and after implementation. This occurs because higher levels of user resistance are encountered and unknown impacts disrupt operations and derail desired benefits.

II. Effective Usage Requires Ongoing Investments and Attention
In reality, most significant, sustainable changes take about 18 months to take hold and settle into the bottom line. Many organizations often use all their money and ‘attention capital’ in the implementation stage and fail to achieve full value realization. To achieve full value realization ongoing investments are required for areas such as training and support. Also, executive sponsors need to continue managing ‘mind-share’ after deployment by communicating to employees how effective usage is benefiting the organization.

III. An Organization’s Capacity for Change Dictates How Fast Benefits Can be Realized
Capacity for change is the limiting factor for organization’s attempting more than just automating business as usual. Many organization’s struggle because their leadership/management teams are adept in functional disciplines (sales, product development, etc.), but less so in the discipline of change. A related misunderstanding is the perception that change leadership can be delegated to the core implementation team, it cannot. Change leadership is a shared responsibility through all levels of management.

Insight #2: Good Software Isn’t Enough
More than 80% of the factors that drive Effective IT Adoption have nothing to do with the software. Therefore to be successful, organizations need a more robust discipline than traditional software deployment methodologies. Specifically, a more integrated discipline (see Figure 2) would address the complex interconnection between the software solution, the operating capabilities of the host environment and the organizational commitment to software driven change. The following are three key areas of focus, which if executed in parallel deliver Effective IT Adoption.

Figure 2

I. Driving Organizational Commitment
Managing expectations and concerns accelerates Effective IT Adoption and helps avoid unnecessary adoption risks. Ideally, organizational commitment efforts will position stakeholders as owners of software-enabled process change and less as its victims.
  • Market the Value – quantify and repeatedly communicate the value of effective usage to the organization and develop “what’s in it for me” messaging for critical stakeholders

  • Proactively Influence Stakeholders – create opportunities for stakeholder involvement, design usage metrics and incentives to align behavior towards buy-in

  • Maintain Strong Governance – execute active executive sponsor involvement, define performance outcomes to direct and track success, hold managers accountable for progress

II. Building Supportive Operational Capabilities
  • Developing supportive operational capabilities significantly enhances a software solution and requires more effort than just software usability training.

  • Refine the Operating Model – formally assign decision rights, define new roles and ensure responsibilities are understood, revisit organizational structures

  • Enhance Change Leadership – develop manager’s communication and expectation management skills, assign dedicated transition management resources

  • Develop User Skills – enhance domain specific skills, increase decision management competency to provide actionable insights

III. Tailoring the software solution to the unique character of the host organization
Tailoring the solution requires more than just defining feature requirements. Keeping the organization’s unique culture and business needs at the forefront of solution deployment decisions increases the likelihood of success.
  • Consciously choose the process maturity jump – decide whether you are automating business as usual or increasing process capability, understand the impacts of process maturity jumps, invest in workflow and data models before deploying software

  • Focus software enabled capabilities on high-value areas – define a combination of pain points and desired business capabilities to prioritize functionality deployment, deploy functionality that is highly valued by front-line employees early to create momentum

  • Develop Capability-Based Deployment Plans – account for internal deployment bandwidth, factor in time to stabilize the foundational functionality

Insight #3: Too Much of a Good Thing Can Hurt You
Like most things, strengths become weaknesses when they are taken to the extreme without consideration for unintended side effects. Currently, the SaaS model places a premium on speed, simplicity and customization. These strengths can undermine the end goals of a software initiative if enterprise buyers let them proceed without limits. Enterprise buyers should keep an eye on the following:

I. User ‘Feature Fatigue’ from Faster and More Frequent Upgrade Cycles
Software vendors tend to think of upgrades as a good thing for customers. The logic is more functionality equals more benefits. The SaaS model allows for accelerated release cycles. When these release cycles are constantly used for functionality and usability enhancements users can become disgruntled with their moving target and disengage from using the software.

II. Increased Organizational Complexity from Multiple Configurations
In large enterprises, various divisions/departments have specialized business needs for their software. The ease of user-driven configuration with the SaaS model can result in some organizations having many different configurations in their organization. This is problematic for organizations that are attempting to drive process consistency across the enterprise. Also, ‘power users’ driving configurations can chase off mainstream users who declare the deployment too complex and/or cumbersome.

III. Fragmented Business Disciplines from Incomplete Process Coverage and Siloed Data
SaaS price points and functional simplicity are enablers for grass-root, viral adoption. As the software expands into the organization some users conclude that the deployed functionality is incomplete in the context of their entire business discipline. In addition, the absence of IT involvement can result in siloed data that prevents actionable insights being developed. Both these potential adoption risks create the perception that the software is less valuable to the organization, which ultimately results in users opting-out.

High Achievement Occurs in the Context of Unrealistic Expectations
While I have stated that I believe the expectations of SaaS delivered software are too high, I also believe the obvious benefits of the SaaS model suggest we should not drop our sights too low. If we accept that the software itself is just one actor in a much more complicated drama then it should be clear that the three insights discussed need to be addressed.

Progressive enterprise buyers will close the expectation gap by harnessing the strengths of SaaS and by spending more energy addressing the areas that have traditionally plagued software deployments. Inevitably, this will involve redirecting deployment savings into activities that promote Effective IT Adoption before, during and after implementation.

This is not a trivial effort. In fact, for some it will require a complete paradigm shift. But in our world of technology-driven change we must all adapt and evolve to survive – those who do will unleash the full benefits that the SaaS model has to offer.

Chris Dowse is Founder and CEO of Neochange, the leading management consulting firm focused exclusively on the complex challenge of Effective IT Adoption. The company is based in San Francisco with resources in the UK and Australia. It developed the innovative Adopt IT TM methodology and has consulted with executives of Fortune 500 companies such as Wells Fargo, Cisco, DirecTV and McKesson to help mitigate adoption risks and manage business transformations in the areas of IT management, CRM/SFA and Enterprise Risk Management. Neochange is also retained by industry-leading ISVs ($20M to $1BN in revenues) to develop and execute their user adoption solutions/practices. Chris is a cited industry thought leader on organizational adoption and software-driven transformations. His research and opinion papers have been published in various technology channels such as Information Week, SoftwareCEO and Sandhill.com. He frequently presents at C-level events and round tables on the leadership challenges associated with transforming software companies and corporate IT. For article feedback, contact Chris at inquiries@neochange.com

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