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Where Have the Services Gone?

The Center for Collective Intelligence (http://cci.mit.edu) at Massachusetts Institute of Technology (MIT) is established around the basic research question: “How can people and computers be connected so that-collectively-they act more intelligently than any individuals, groups, or computers have ever done before?”

I think this is a fantastic opening question to any software (or services) company looking to establish a solid value proposition. Or to take the position of any IT executive, how will the software connect with my organization, both people and processes, to allow my business to act more intelligently?

While the research and purpose of this Center is much larger and more impactful than a specific software application, it does generate a number of tactical questions and observations relevant to the current state of software today… web 2.0, the Cloud, Software-as-a-Service, On Demand…

Where have the services gone?
The increase of business and enterprise-class software moving to a software as a service (SaaS) or On- Demand model has influenced more than just shifting the infrastructure and models used to host and run the software, cloud based computing has also shifted the cost and service model for corporate software. The services involved with implementing SaaS applications have come under intense price pressure and are demanded to be “in-line” with a model of no up-front costs, recurring license subscription, and in many cases a free trial in some form. On a side note, Lincoln Murphy, Managing Director at Sixteen Ventures recently published a good paper titled, “The Reality of Freemium in SaaS” (http://sixteenventures.com). In many cases implementation services in today’s SaaS world means customer self-service or a nominal service charge for a limited configuration and training. Many thanks to the advances in technology and user interface design. So who is responsible for the success of a SaaS implementation and what is success in the SaaS world? In other words, who is responsible for connecting the people and computers?

In the past, the vendor or large system integrators would include the program and project management, communications, change management …with the scope of work. This was accepted and “in-line” with a model of multi-million dollar software license purchases, hundreds of thousands of dollars in capital expenditure, and million dollar plus implementation service contracts. Successes and failures aside, in essence the vendor or system integrator signed up to partner with the customer to manage the process integration and change management that goes with the software. Today the project war room is gone, and the “Change Agent” is not included with a SaaS or “Freemium” model!

There is a new partnership model emerging that brings a fresh approach to providing services. The ultimate measure of success for a SaaS business is renewals. Interestingly, this brings the customer and the vendor closer together on the measure of success, adoption and value realization. The exit criteria has not changed…the exit criteria is gone!

What has not changed is the need for strong sponsorship and leadership to change the business and systems so they may collectively act more intelligently. Critical to the success of any initiative and not to be taken lightly even though the upfront commitment in $$$ may be gone. Who will step up in your organization to deliver the leadership and drive change management needed for success? Who will connect the people and the computers?

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