I’ve written previously about how our firsthand interviews with SaaS buyers have revealed a mixed bag of user experience, and satisfaction with long-term results. The problems mostly stem from the implementation: even with significant input from 3rd party implementation partners (VARs, SIs), unforeseen challenges (the complexities of the SLA, difficulties of bulking up from trial to full deployment, and the process change required for users to map to the new solution), the journey can be daunting. Some of the fault for this situation is due to the whole IT supply (software services vendors, resellers) and demand (all sizes of IT organizations but especially mid-sized and smaller), because they are prone to selling, installing, and deploying subscription services just as they’ve done for years with packaged applications. Sometimes frustration with this regime inspires innovators. Recently I attended a briefing by the CEO of a cloud solution provider (one of NetSuite’s largest resellers) who after 100+ cloud deployments recognized a recurring problem in the SMB space: a lack of highly-experienced functional expertise that was slowing the pace of new SaaS HR/HCM deployments. Many of the problems stemmed from poor domain expertise, not lack of IT skills – there are plenty of talented admins and sysops around. The CEO is Brenda Brinkley, head of Epiphany, who is launching a new company in Q2 2014 called Elysian Field Software.
It's been interesting watching customer uptake of SaaS applications, and in particular the interest from SBM customers. In IDC's Fall CloudView survey (n= 3462, 19 countries) IT buyers from firms with <500 employees stated they'd devote 23% of IT spend to SaaS, up 4% from the 2013 survey, and smaller firms (<250) were up even more - 6%, to 24%. This is not a shocker to those of us who believe in future where startup employees get a tablet, 4G and a bunch of websites as their IT infrastructure.
Epiphany, a NetSuite VAR with its own software IP built on the NetSuite backbone, has found a growing market of SMB's who are well educated on the economics of SaaS. For example, Epiphany CEO Brenda Brinkley saw a recurring trend that was in her words "mucking up the works" when it came to installing her custom-built HR/HCM and Field Service solutions that worked with her NetSuite ERP installations. "It got to a point where I told my sales/service team - 'enough with the HR deployments; if I see one more code change request from a client on HR I'll scream." In fact, when she brought in the services of an ERP marketing strategist, Judith Rothrock of JRocket Marketing, to review her products and forge a new go-to-market plan, she hobbled the project out of the gate. "I told her I would listen to any good advice except an HR product ramp-up."
JRocket advised Epiphany to evolve the company into a two-division strategy mirroring the NetSuite line and an "other ERP" line of cloud solutions featuring a core of HCM solutions. After she saw the data on the opportunity, and saw evidence that poor domain expertise had been the main culprit in slow deployments, Brinkley bought in to the strategy.
This meant a significant company makeover for Brinkley, including plans for founding of a new company called Elysian Field Software in Q2 2014. The company is aimed specifically at enterprise SMB cloud buyers in the services industries, with one division called Epiphany that will continue as a NetSuite Solution Provider. A second division (Elysian Field Services) will sell HR/HCM and Field Services solutions to work on additional ERP backbones.
The problems in SMB HR cloud deployments are typically rooted in a lack of seasoned HR domain experts at the customer site - with either non-HR people assuming the key HR roles, or a less-seasoned functional head who was figuring out the function (and the cloud deployment) as they went along. This is a software company's worst nightmare because without a seasoned domain expert at the customer acting as "champion", there will be inconsistent product requirements, multiple requests for change orders, 're-thinks' on requirements/request originally contracted, etc. Further, the lack of experienced domain experts means there is no owner of the end-to-end HR function, and with only part-time ownership, the deployment process can be delayed or restarted.
Elysian's approach is to instantiate a resource pool of highly seasoned HR/HCM consultants, who may be seasoned part-timers raising families, early retirees, who are pre-screened and product trained by Elysian Field Software, but who are NOT employees of the company. Elysian Field calls these their "Mantra Teams" for restoring peace/harmony into what otherwise has been a chaotic process for smaller cloud organizations (and for software providers!). Elysian Field Mantra Teams will be:
- Screened and vetted by Elysian field Software for their best practice/business process expertise
- Trained on how to use Elysian Field Software to optimize those HR/HCM and field services practices
- Affordable compared to most VARs as they are contracted directly with no channel mark-up
- Motivated directly by the customer's priorities (not the vendor's), yet has the knowledge/expertise to more quickly deploy/leverage Elysian Field Software to achieve the customer's objectives
The point here is that cloud uptake and success has many variables - some of them directly tied to specifics of that deployment model (and the accompanying SLA's, etc.) - and some which are less obvious but that can have a very large impact. We'll be watching with Elysian Field Software closely as it is launched in Q2, to see customer uptake for the Mantra Teams, and see how they accelerate uptake at small businesses - the model is completely unique in my experience and it may be a textbook practice for others to follow.