4 reasons why SaaS implementations fail

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Software-as-a-Service (SaaS) is rapidly becoming the go-to solution for businesses intent on boosting productivity and efficiency, while at the same time untethering themselves from committing to sizeable up-front investments in IT infrastructure, software and training.

SaaS implementations do promise a host of highly attractive benefits over their on-premise counterparts, but for many businesses that fail to perform the necessary due diligence before switching platforms, the results are often disappointing and a failure to meet ROI common.

When failures occur after implementing new software executives and project managers find themselves in a painful predicament: to assign blame on service delivery failure, or to examine, identify and display the businesses role in failed SaaS integration and execution.

When one digs beneath the surface of failed SaaS implementation a number of key factors often become evident. Upon more detailed and thorough appreciations of why SaaS implementations fail, findings generally point to the following four root causes.

A lack of clearly defined objectives for implementing cloud-based SaaS

A surprisingly high number of failed implementations share the lack of clear, well-defined and measurable goals for the SaaS implementation. Setting ambiguous, loosely defined and immeasurable goals is a key ingredient to implementation failure.

Any business looking to employ cloud-based capability first needs to be clear on exactly what problem or set of problems they want the software to help address and overcome. These problems and desired outcomes need to be relevant, clearly defined and measurable. It must be noted that cloud-based Software-as-a-Service implementation is not a panacea to all the troubles and challenges facing an organization, and should not be treated as such.

Pre-implementation, it is vital to have a vision and process for transition. This process needs to be clearly outlined and actionable. Roles and responsibilities for each team member need to be assigned and everyone, from executives through management to the worker on the factory or warehouse floor, needs to know exactly what is expected of them as well as how to interact with the new software platform.

The band aid approach

There is a well-known anecdote concerning a motorist who neglects to service and run his car. Eventually, after prolonged misuse the dashboard of his car begins to light up – no oil, dangerously high temperature, and low gas – and instead of stopping to service the car’s needs he merely applies a band aid over the flashing red warning lights. When the car eventually seizes, the stranded motorist lays blame on everything wrong with the car and fails to take account of his own contribution to the vehicle failing.

Just like the illustration above, a business with ineffective processes in place, untrained or unqualified people in key positions and major defects with product or services cannot expect to invest in a SaaS solution to act as a band aid to the deeper, more entrenched issues operating within their business.

Before a business considers implementing SaaS it is essential to ensure that its processes, people and products/services are not already functioning incorrectly. SaaS is a tool, nothing more. Which means that if this tool is put in the hands of people going about things the wrong way, they will simply be doing the wrong things more efficiently.

It is very important that process managers evaluate and identify what they are doing wrong and what issues need addressing, before moving on to implementing a software solution to help them overcome those issues.

Choosing the wrong service provider for the needs of the business

The most important considerations when choosing a SaaS provider are as follows:

  • Provider expertise
  • The quality of the SaaS solution itself
  • The level of training as well as support available
  • Transparent pricing

The chances of the SaaS implementation failing rise considerably if any (or all) of these criteria are unmet. It is essential that the SaaS solutions provider offer a program that lends itself to customization to best integrate with and meet the challenges and needs of your particular business. In some cases, niche specific solutions maybe called for, such as Unleashed for retail inventory, but for most businesses the ability of the software to evolve, scale and adapt as the business does is a must.

A further overlooked element is the level of support offered by the service provider. While many SaaS cloud providers generally offer separate tiers of service, each one separately priced, some do not.

Unless your budget is very constrained it always makes more sense to pay that bit extra to secure full support, on call, whenever you need it (phone support is available on Unleashed’s Large plan). Lack of support ranks as one of the greatest contributors to SaaS implementation failures amongst businesses, so it is highly advised to do the research and find a cloud SaaS provider that offers comprehensive support.


Pricing is a double-edged sword in that it cuts businesses both ways. Businesses either under or overestimate their software requirements. When a business overestimates the degree and complexity of service required to run their operations, they end up over investing and paying significantly more than they actually need – in essence purchasing a rocket launcher to blow up a glass bottle. (Note: An Unleashed plan can be downsized, if required).

When a business underestimates its software solution requirements they practice shortsighted cost savings management that prevents them from making the right investment for their needs. There is a time for CFOs to be ‘tight fisted’ with where and how much working capital is invested, but when it comes to securing a software solution designed to boost efficiency and reduce costs, the long term ROI is what should drive the decision making.

Businesses looking to avoid SaaS implementation failure should always ensure that they have clearly defined objectives in place before investing in a solution. What’s more, they should evaluate how their own processes, people, products and services are already contributing to poor performance. Next, they should outline an implementation strategy that clearly allocates roles and responsibilities to all team members, as well as identify how the SaaS can be best utilized to enhance operational effectiveness of these team players.

Finally, businesses should thoroughly research Software-as-a-Service solutions available to them and be sure to match their requirements to the level of integration and support at the right price.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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