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PA OPINION

How to approach SaaS ERP transformations to maximise the benefits

The benefits of delivering corporate services, such as HR, finance and procurement, through a Software as a Service Enterprise Resource Planning (SaaS ERP) model are clear. It can reduce costs significantly, improve efficiency and let teams focus effort on value-adding and differentiating activity. The ongoing COVID-19 pandemic has also highlighted the ability of SaaS ERP to limit paper-based processes and increase self-service – vital features as whole organisations work remotely.

But taking a traditional technology-focused, Systems Integration (SI) approach won’t enable these benefits and will create a huge number of challenges throughout the organisation. So, how do you embark on a successful SaaS ERP transformation and ensure you maximise its potential?

SaaS ERP needs to be a driver of business transformation, not just a technology refresh, which comes down to acting in three key areas:

Anticipate challenges and address them before they become issues

The drive to adopt SaaS ERP must come from the business, not the IT department. Senior business buy-in and a mandate from the top is the only way to drive the transformation throughout the organisation. So, start by agreeing the vision for your SaaS ERP transformation to secure buy-in from stakeholders and staff. This will also provide goals for everyone to work towards.

As the business will drive your ways of working, you shouldn’t spend unnecessary time detailing your as-is requirements. But you do need high-level capability and module requirements. So, you need to create a high-level Target Operating Model of your organisation – particularly your HR, finance and procurement functions. This will let you run a gap analysis against your requirements to select the best solution available and understand the level of business change needed to maximise the benefits. Ensure the people with the functional expertise run this analysis, and include your technical, integration, data and security requirements, as the new solution will need to plug into your ecosystem.

The gap analyses will also highlight your unique and complex processes or integrations, such as recruitment for specific roles and legacy payroll rules, that out-of-the-box technology might not cover. This will let you address the challenges before they become issues and help you choose the right solution and vendor.

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Understand and engage the SaaS ERP market to secure the right capabilities

Moving to SaaS ERP is a business-led transformation, so a single SI won’t be appropriate: think Business Integration, not Systems Integration. You need to look at business architecture, operational readiness and business change capabilities, all of which traditional SI approaches tend to forget.

As you look to secure the right capabilities, it’s possible you’ll need several suppliers, including more boutique firms, so it’s critical to define the roles and responsibilities. There will be crossover in areas, so developing good ways of working and mutual incentives is key to a successful transformation. This will also put more onus on your organisation to effectively manage the suppliers and be the ultimate design authority to make sure the programme comes together from business, technical, commercial and risk perspectives.

Start by developing longlists of potential suppliers for all the capabilities you require. Then perform initial assessments based on your high-level requirements and other relevant criteria, such as location, size and scale, and culture. These assessments will help you identify the most appropriate procurement route for each capability ‘bundle’ based on time to market and the suppliers and contract terms available. Crucially, you need to understand the pricing model as SaaS licenses are significantly different to traditional ERP contracts.

Engage your stakeholders throughout the process so the solution has clear ownership and you promote a good working relationship with the suppliers.

Adopt the solution and adapt your ways of working

Having selected the best solution, you need a solution-driven approach to implementation, rather than a traditional requirements-driven approach.

Any customisations risk diminishing the benefits of the best-practice processes, regular updates and having a single source of truth. So, to the greatest extent possible, you need to adopt the off-the-shelf solution and the whole organisation will need to adapt to new ways of working. While the solutions will configure to your organisation and integrate with your wider technical landscape, this is more than just adopting new business processes and integrating a new system into your IT suite. There’s a need to adapt culture and align policies to support a successful transition.

It’s important to engage people from corporate services and the business early to ensure you’ve selected the best solution and to demonstrate the benefits that it will bring. You also need to effectively communicate the change and deliver training in these new ways of working. This will ensure everyone is keen to move to the more modern and efficient set up, maximising the benefits of your SaaS ERP transformation.

There are big benefits when you get your SaaS ERP transformation right

Switching corporate services to SaaS ERP can reduce costs, improve efficiency, let teams focus effort on value-adding activity and support remote working. To unlock these benefits, you need to think of the transformation as a business integration, not a systems integration. When you anticipate and address challenges, proactively engage the market and adapt ways of working to the solution, you can ensure the whole organisation benefits from your SaaS ERP transformation.

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