Saas Service Providers Need to Align With As-a-Service Ideals | 1

SaaS SERVICE PROVIDERS

NEED TO ALIGN WITH AS-ASERVICE IDEALS
Khalda De Souza, Principal Analyst, HfS Research
March 2016

Introduction
As service providers develop their SaaS service portfolios, they need to also align capabilities and engagement
methodologies to the HfS As-a-Service ideals to remain competitive. These are challenging requirements
because they may require a different approach to service development and client engagement than service
providers are used to. SaaS service clients expect service providers to demonstrate deep process knowledge
and share best practice experience in the context of the clients specific business objectives. They also expect
this to be underpinned by flexibility in contract stipulations and corresponding pricing methodologies.
Successful SaaS service providers can deliver a high level of flexibility and business knowledge. In addition,
they can demonstrate capabilities across the HfS As-a-Service ideals to foster deep client relationships and
demonstrate true value. Here we outline the key trends of this emerging opportunity.

SaaS Services and the As-a-Service

Ideals
Demand for SaaS services is growing. Our pioneering research in Workday, Salesforce and SuccessFactors
services in the past year highlights the ongoing need for services across the Value Chain to support SaaS
deployments. Enterprise buyers have realized that the software vendors initial claims that they will need little
to no IT service support is not true. In fact, there are opportunities for service providers to enhance and adapt
their service portfolio across the value chain to be more relevant to SaaS deployments. As we highlighted in
What Makes Service Providers Relevant For Software-As-A-Service, service providers have increased service
opportunities because they can help enterprises understand the full extent of deploying SaaS, as well as offer
continued support services to ensure new software releases remain relevant to dynamic business objectives.
Consulting services should, therefore, include helping clients to develop a business case for deploying SaaS,
conducting cloud readiness assessments and importantly, offering organizational change management services
to ensure that the application is used for maximum business benefit. Service providers that take the time to
understand a specific clients objectives will be able to do this most successfully. Management services should
be more flexible as many enterprises require ad hoc access to advice and skills. While they are contracted as
ongoing services, optimization services utilize consulting skills that include ongoing alignment of a clients HCM
or CRM process with the technical deployment, including the impact that new releases and modules may have.

f S R e s eLtd
a r|cwww.hfsresearch.com
h | T h e Se r v i c e s R|ewww.horsesforsources.com
search Company
2016, HfS H
Research,

Saas Service Providers Need to Align With As-a-Service Ideals | 2

Clients value this flexibility and proactivity in management and optimization services, but it poses challenges to
service providers to effectively manage their consultant pools.
Exhibit 1 outlines the HfS SaaS services value chain.
Exhibit 1: SaaS Services Value Chain

Source: HfS Research, 2016

Leading service providers are also aligning their SaaS service capabilities and engagement methodologies to
the HfS As-a-Service economy ideals. Exhibit 2 outlines the HfS 8 Ideals of the As-a-Service Economy.

f S R e s eLtd
a r|cwww.hfsresearch.com
h | T h e Se r v i c e s R|ewww.horsesforsources.com
search Company
2016, HfS H
Research,

Saas Service Providers Need to Align With As-a-Service Ideals | 3

Exhibit 2: The HfS Research 8 Ideals Of the As-a-Service Economy

Source: HfS Research, 2016

In the past year, HfS has compiled 3 SaaS Blueprint reports:

HfS Blueprint Report: SuccessFactors Services 2016. See: Accenture, IBM, NGA and NTT Data lead in
SuccessFactors Services

HfS Blueprint Report: Salesforce Services 2016. See: Accenture, Deloitte, Capgemini and Bluewolf lead
the industrys first Salesforce Services Blueprint

HfS Blueprint Report: Workday Services 2015. See: The industrys first Workday services blueprint: A
new breed of As-a-Service providers has disrupted HR delivery forever
Premium members of HfS Research can read the full Blueprints here:

HfS Blueprint Report: SuccessFactors Services 2016

HfS Blueprint Report: Salesforce Services 2015
HfS Blueprint Report: Workday Services 2015
Here we outline some of the key trends and opportunities in each of the 8 HfS As-a-Service ideals, across the
SaaS service value chain, based on learnings from the three HfS SaaS services Blueprint reports of the past

f S R e s eLtd
a r|cwww.hfsresearch.com
h | T h e Se r v i c e s R|ewww.horsesforsources.com
search Company
2016, HfS H
Research,

Saas Service Providers Need to Align With As-a-Service Ideals | 4

year. Most of these are still emerging in the SaaS service market and remain hot opportunities for SaaS service
providers over the next few years.
1.

2.

3.

Write off Legacy.

Definition: Using platform-based solutions, DevOps, and API ecosystems for more agile, less
exception- oriented systems.

Trends: Clearly, enterprises deploying a SaaS solution have decided to write off legacy in at
least one part of a process in favor of a SaaS-based alternative. However, there is still often a
lack of understanding of the technical and organizational implications of moving to a SaaS
solution. SaaS service providers, therefore, have opportunities to provide assistance, including
organizational change management services to clients as they write off their legacy and move
to a SaaS model. Mature enterprise buyers, especially those in second-generation
deployments, such as for Salesforce, understand this better than many green-field clients
deploying SaaS for the first time.

Design Thinking.

Definition: Understanding the business context to reimagine processes aligned with meeting
client needs.

Trends: The success of any application is measured by whether it is actually used. As a result,
the end-user is increasingly positioned at the center of any SaaS deployment decision. This
elevates the ease of use of the user interface to being a critical solution selection criterion.
Beyond the technology, it includes a clear understanding of the entire end-user experience,
which involves viewing the deployment from their point of view. This is in line with the theory
of Design Thinking which some SaaS service providers are investing in. For example, IBM
strengthened its focus on user experience and design thinking by its recent acquisition of
Salesforce specialist, Bluewolf, which we outlined in IBM Culls The Pack Of Salesforce Partners
By Buying Bluewolf. Our SaaS services Blueprint reports also highlight client interest in
understanding and achieving best practice in how to run their HR or CRM process. Design
Thinking encourages enterprises to totally re-consider the way in which they run their
processes. It remains a big opportunity for all SaaS service providers as buyers increasingly
demand innovation.

Brokers of Capability.

Definition: Orienting governance to source expertise from all available sources, both internally
and externally, to address capability gaps.

Trends: The term As-a-Service doesnt only refer to technology. It also refers to skills and
services. This is particularly relevant in the post go-live phase of SaaS management and
optimization services. Enterprise buyers still need some element of keeping the lights on type
of management services, but the focus is swiftly shifting to ensuring that they always have the
most relevant lights in the face of changing technical specifications, and business objectives

f S R e s eLtd
a r|cwww.hfsresearch.com
h | T h e Se r v i c e s R|ewww.horsesforsources.com
search Company
2016, HfS H
Research,

Saas Service Providers Need to Align With As-a-Service Ideals | 5

and requirements. As these services will increasingly demand flexible access to assistance and
proactive recommendations, service providers and enterprises alike will need to perfect the art
of becoming brokers of capability to source the right skills at the right time. For example, in
Accentures flexible factory model for application outsourcing services, resources can be
shared across engagement teams, leveraging the necessary skills and capacity on demand.
Several service providers, such as Hexaware, have developed flexible management service
offerings, with ad hoc access to consultants, whether it is remote advice or onsite assistance,
typically paid for with a bundle of hours per month. Another example is Neeyamo Enterprise
Solutions, which offers customers bundles of 250 or 500 hours to use throughout a year as part
of its SuccessFactors management services. While clients appreciate this new model of flexible
management services, service providers are challenged with having to promise support for
uncertain events, which in turn makes it extremely difficult to effectively manage consultant
time and availability. Service providers with a big pool of certified consultants, in locations
close to clients, have the best chance of offering this flexibility successfully. Importantly, SaaS
service clients will continue to demand immediate access to specific skills on an on-demand
basis.
4.

5.

Collaborative Engagement.

Definition: Ensuring relationships are contracted to drive sustained expertise and defined
outcomes.

Trends: Our SaaS services Blueprint reports highlight the increasing importance for service
providers to understand a clients desired business outcomes in the Plan stage and continue to
adhere to this throughout the SaaS services value chain journey. One of the key drivers of
client satisfaction in all of the HfS SaaS services Blueprints is an effective account manager or
project manager who understood the clients needs and ambition throughout the deployment.
Leading SaaS services providers can demonstrate their willingness and capability to understand
a clients business requirements, objectives and vision for the HR or CRM process, and to share
best practice scenarios to help them to achieve their desired outcomes. All this requires a
collaborative engagement methodology. It is particularly important for service providers to
continue to offer business advice throughout the implementation services project, as there are
often changes and tweaks required, despite having developed a clear roadmap in the Plan
stage. This business level understanding of clients SaaS deployments is also important in
ongoing management and optimization services, as it allows service providers to anticipate
issues as well as position all recommendations in the context of a clients business objectives.
Collaborative engagement will become increasingly important as clients focus more on postdeployment services that help them to stay relevant to dynamic business objectives. Employing
an agile methodology is a key enabler to help achieve this.

Intelligent Automation.

Definition: Using of automation and cognitive computing to blend analytics, talent, and
technology.

f S R e s eLtd
a r|cwww.hfsresearch.com
h | T h e Se r v i c e s R|ewww.horsesforsources.com
search Company
2016, HfS H
Research,

Saas Service Providers Need to Align With As-a-Service Ideals | 6

Trends: SaaS service providers have invested in proprietary automation tools to help clients to
migrate data to their SaaS environment and preconfigured templates and accelerators that are
often tailored to specific industry sectors. Some are more technical focused, while others
include business perspective. Examples include Hexawares Cloud Morphy data migration tool
for SuccessFactors, and Capgeminis SAP SuccessFactors Lite Push global project accelerator,
which is a project methodology that consists of a set of tools and deliverables to accelerate
global implementation and roll-out. OneSource Virtuals Atmosphere platform automates
recurring processes across its base of Workday services clients, which we highlight here:
OneSource Virtual, Born In The RPA Cloud. While there has been a lot of activity in automated
proprietary tools and technologies across our SaaS services Blueprints, there are still a lot of
opportunities to take these to the next level of truly blended analytics, talent and technology
solutions.
6.

7.

Accessible and Actionable Data:

Definition: Applying analytics technologies, processes and resources onto relevant data sets to
derive insights that can help improve an enterprise.

Trends: Most of the clients in our Workday, Salesforce and SuccessFactors services Blueprint
reports had only implemented one or a few of the SaaS modules available. As interest picks up
to implement additional modules and enterprises gain a better visibility of their HR or CRM
process, we expect interest in analytics to also increase. The ultimate aim for buyers is to gain
real business insights to be able to make compelling business decisions. Leading SaaS service
providers are investing in this area now in preparation for this increased demand. Some,
including Accenture, Deloitte and IBM are already delivering analytic services to mature
enterprises that are already at this point in their journey.

Holistic Security.

Definition: Proactively managing digital data across service chain of people, systems, and
processes.
Trends: Security is an important concern in HR and CRM processes, as enterprises are dealing
with sensitive client and employee information. The onus has largely rested with the software
vendors to ensure that their products comply, or can be easily adapted to comply with the host
of regulations in the market. As the SaaS services market matures, however, and there are
more complicated, multi-country deployments, the responsibility will increasingly shift to
service providers to build security around the different SaaS environments. SaaS security
services will, therefore, increase in importance and present as a differentiating factor for SaaS
service providers in the next few years.

8.

Plug-and-Play Digital Services.

Definition: Plugging into ready to go business outcome- focused, people/process/technology

solutions with security measures.

f S R e s eLtd
a r|cwww.hfsresearch.com
h | T h e Se r v i c e s R|ewww.horsesforsources.com
search Company
2016, HfS H
Research,

Saas Service Providers Need to Align With As-a-Service Ideals | 7

Trends: To reach the holy grail of offering truly plug and play digital services, SaaS service
providers need to identify opportunities to build relevant and valuable solutions around the
product. This includes methodologies, tools, technologies, accelerators and templates which
can be focused on specific parts of a process, size of client enterprise or industry sectors.
Examples include the Salesforce Fullforce Industry Solution Certification, which encourages
providers to build industry solutions around the basic Salesforce product. Deloitte is a good
example of a service provider that has taken advantage of this Salesforce opportunity and built
solutions for many sectors including health care, consumer products, manufacturing, and
media and retail. This remains a big opportunity for all SaaS service providers for all the SaaS
platforms.

Conclusion
Our SaaS services Blueprints highlight the changing nature of IT services to support SaaS deployments. Many
leading SaaS service providers have invested in developing more business specific consulting services and
flexible post go-live support services, and attempted to align to the HfS 8 ideals of the As-a-Service Economy.
The HfS SaaS services value chain highlights the keys services that successful service providers should consider
offering. As for the ideals, we see most examples in Write off Legacy and Intelligent Automation today across
the SaaS solution areas. The majority of the ideals are in an emerging state, including Design Thinking, Brokers
of Capability, Collaborative Engagement, and Accessible and Actionable Data. Lagging behind are Holistic
Security and Plug and Play Digital Services. There are still many opportunities to strengthen both service
development and alignment to the HfS ideals of the As-a-Service economy as the SaaS services market
matures. We expect a continued flurry of activity in SaaS services over the next few years as service providers
adapt their business models and client engagement methodologies to deliver maximum value.

f S R e s eLtd
a r|cwww.hfsresearch.com
h | T h e Se r v i c e s R|ewww.horsesforsources.com
search Company
2016, HfS H
Research,

Saas Service Providers Need to Align With As-a-Service Ideals | 8

About the Author

Khalda De Souza
Khalda De Souza covers developments in IT and BPO across Europe for HfS and
globally covers the emergence of services around software as a service (SaaS)
offerings.
Prior to HfS, Khalda has been a senior level IT services research analyst at Gartner
for nearly 20 years. In that time, she has managed the European research for several
areas including network and IT security and business applications. Khalda has led
key research deliverables such as Magic Quadrants for both Europe and global
markets at Gartner.
Khalda has extensive experience in providing strategic advice to both IT services
providers and customer organisations globally. For providers, this includes, but is not limited to, channel
strategies, product positioning, competitive intelligence, market trends and forecast analysis. For customers,
Khalda has provided insightful guidance on sourcing and vendor selection strategies.
Khalda has a BSc. from Aston University in International Business and French. She lives in the UK with her
husband and three children.
Khalda can be reached at khalda.de-souza@hfsresearch.com and followed on Twitter at @Khalda_De_Souza.

f S R e s eLtd
a r|cwww.hfsresearch.com
h | T h e Se r v i c e s R|ewww.horsesforsources.com
search Company
2016, HfS H
Research,

Saas Service Providers Need to Align With As-a-Service Ideals | 9

About HfS Research

We coined the As-a-Service Economy term because we see a profound change under way that is more allencompassing than a simple business model or product line. It's a global shift that will leave few sectors of
business or society untouched.
To help our clients and the market get to the As-a-Service Economy, we serve the strategy needs of business
operations and IT leaders across finance, supply chain, human resources, marketing, and core industry
functions in organizations around the world. HfS provides insightful and meaningful analyst coverage of best
business practices and innovations that impact successful business outcomes, such as the digital
transformation of operations, cloud-based business platforms, services talent development strategies, process
automation and outsourcing, mobility, analytics and social collaboration. HfS applies its acclaimed Blueprint
Methodology to evaluate the performance of service and technology in terms of innovating and executing
against
those
business
outcomes.
HfS educates and facilitates discussions among the world's largest knowledge community of enterprise
services professionals, currently comprising 100,000+ subscribers and members. HfS Research facilitates the
HfS Sourcing Executive Council, the acclaimed elite group of sourcing practitioners from leading organizations
that meets bi-annually to share the future direction of the global services industry and to discuss the future
enterprise operations framework. HfS provides sourcing executive council members with the HfS Governance
Academy and Certification Program to help its clients improve the governance of their global business services
and vendor relationships.
HfS trail blazed the freemium research model. More than 75% of our published research requires just a few
check boxes in our simple registration to downloadno subscription, no hassles.
See how we're revolutionizing the research business with the Four Pillars of HfS Researchour guiding
principles.
Learn more about our services.

f S R e s eLtd
a r|cwww.hfsresearch.com
h | T h e Se r v i c e s R|ewww.horsesforsources.com
search Company
2016, HfS H
Research,