July 15, 2017      3 min read

When introducing software as a service (SaaS) or enterprise resource planning (ERP) systems into your organisation, you are able to integrate various applications and can automate many business functions.

SaaS and ERP deliver efficiency and reliability gains and the benefits to your business are numerous but if they are not correctly implemented, failures can occur. This may happen for one reason or a combination of factors including failure to deliver on time, budget overruns or installing a product that wasn’t suitably designed to fit your business’ needs.

There are numerous costly examples where SaaS has failed to deliver. For example, considerTake for example the UK’s National Health Service ‘Connecting to Health’ project that cost taxpayers more than GBP £10 billion before it was abandoned.

Why is that important? Because understanding the reasons SaaS implementations fail provides an opportunity to learn from others’ mistakes so as to avoid repeating them.

Failure to plan

One size doesn’t usually fit all. If you’re not clear on what you want to achieve or when you want to achieve it, then you are taking a hit or miss approach that is likely to have hit or miss results. It is therefore crucial to have clearly defined objectives and to develop an implementation timeline to work toward.

Do: Assign a project team to oversee implementation and to ensure the system is configured in a way that works well for end users.

Failure to test

Gung-ho approaches to software implementation habitually fail, despite established wisdom suggesting otherwise. Always undertake appropriate pilot testing prior to new product launches.

Nike appears to have taken their brand slogan “Just Do It” quite literally when rolling out new supply chain planning software. Their failure to implement a pilot run or staged approach prior to going live led to a cascade of issues. These in turn resulted in a significant drop in their share price, numerous class-action lawsuits and an estimated USD $100 million in lost sales.

Damage is not limited to financial loss – it also extends to reputation and customer service delivery. The damage to employee relations can be huge. Queensland Health found this out when the organisation failed to adequately test a new payroll system. Not only was this another billion-dollar disaster but thousands of staff were left underpaid, overpaid or not paid at all.

Do: Undertake vigorous testing to restrict any potential harm. If things do go wrong, this pre-planning will help you identify the supplier’s capabilities for disaster recovery.

Failure to train for implementation

Training is crucial to a successful software implementation and should be readily available to every employee. Training can help to overcome resistance and even to promote acceptance and use of the new system within the company.

It is important to provide training prior to implementation. That said, training should continue to be offered during and after to ensure end user knowledge and capability.

Do: Provide ongoing training and support for staff to reap the greatest value from your investment.

Failure to remedy

Has your software provider offered a service level agreement (SLA) as a part of the primary contract? If not, then it is important to request one. An SLA can be adjusted to suit specific business needs. An SLA is necessary because it will state exactly the level and quality of service expected, ensuring that service providers and customers share common expectations.

An SLA should provide a clear picture of the service being provided. Well-written SLAs typically stipulate procedures for reporting problems, specify the timeliness of response to requests and clearly define access rights and roles. Without an SLA in place, how will you know where the service provider’s accountability starts and finishes?

Do: Establish agreed consequences for providers that fail to meet service obligations. Penalties could include forms of credit, reimbursement or reduced subscription fees. Extreme breaches could enable the customer to terminate the relationship.

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