Posted by Mike Krga | July 27, 2021
In a time before software as a service (SaaS) subscriptions, solutions were purchased with perpetual licenses. A perpetual license offers a customer access to a software application in perpetuity, hence the name. The license holder has indefinite access to a specific version of a software program by paying for it only once. For this right, the customer normally pays a one-off license fee to the software vendor.
While there are vendors that still operate under the perpetual license model, nowadays SaaS subscriptions are more and more becoming the norm. With SaaS subscriptions, the cost is expensed rather than capitalized and payment is spread over the life of the solution rather than in one up-front lump sum.
One of the biggest pressures with either model though is the ability to shorten the time it takes to extract value from the software investment. In perpetual license models, that pressure mainly resides with the customer. In the SaaS model, the pressure to get value is more evenly shared between customer and vendor, however, customers are increasingly pressuring vendors to shorten that critical time to value.
The time it takes to derive value is often measured by time to value (TTV). Value is the benefit a customer is expecting to receive from an individual product or complete solution. It’s not the value the vendor wants to deliver, it’s the perceived value from the customer’s perspective.
With large and complex solution implementations like ERPs, it’s particularly hard to reduce TTV. Enterprise solutions are complex because the software offers tremendous flexibility to address a wide variety of business problems. It typically requires significant effort to design the processes, configure the system behavior, test, train and deploy the software. Once the solution is up and running it can be a beautiful thing, but getting there can be a challenge to the TTV metric.
So, what are some ways to reduce TTV for complex software implementations? Let me share five key ways with you.
A vendor should provide a customer success manager (CSM) whose job is to make the implementation process as smooth as possible. The CSM educates and guides the customer through the implementation process, how to set their implementation team up for success and how to make the choices that reduce TTV.
Before making a large software investment, make sure the product has an intuitive application appearance and behavior. An intuitive application requires less conceptualization, training and will shorten the implementation effort. User adoption is quicker and with less errors reducing the time it takes to acclimatize to the new solution and to begin extracting value. This product usability refers to both using the product plus configuring and testing the solution. Automated configuration and testing tools that are easy to understand and manage for the user allow rapid adoption and system configuration.
In order to reduce product implementation complexity, tasks and deliverables should be condensed to only those that are absolutely required. There should be less dependency on heavy design sessions and project documentation while spending more hands-on time configuring and validating the system using tight iterative feedback loops.
It’s a good best practice to first deploy only the basic functionality required to support operations. Optimization of processes and functionality can come after. This provides both the customer and vendor time to make adjustments to initial design choices once the solution is working in live operations. By focusing on minimum functionality for the initial implementation, the project effort is shifted to optimizing around real-life use of the solution.
Oftentimes, companies struggle with implementing complex software solutions in-house due to the lack of resources with the appropriate skill sets. Let’s face it, most companies don’t have professional software implementation teams. Time to value will be reduced if managed by expert software implementors. The critical role the customer must play is defining the business needs, validating the software and ensuring the solution will run their business.
As the software industry shifts toward SaaS, there is an opportunity for all parties to pursue faster time to value. My closing advice is to be adaptable and willing to change some fundamental implementation assumptions and approaches. The ideas I’ve shared for reducing time to value are a great starting point, but it’s a metric that requires continuous learning. At Tecsys, we’ll share the lessons we learn on tackling this challenge.
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