SaaS procurement in government

Alan IvoryWith more and more government departments looking at ways they can digitally transform their practices, many are looking at software as a service (SaaS) providers as a core part of that strategy. Previously only consistent in their disparate approaches, a clear set of procurement practices are now emerging to ensure the successful integration of SaaS and maximise ROI.

Working with the biggest brands in the world, I have spent thousands of hours with both government and enterprise procurement teams. Over the last year, this has involved facing over 20 different procurement departments in Asia Pacific and globally across the finance, technology, telecommunications, retail, government and travel sectors. Based on that experience, below are my top tips for a smooth procurement process.

  1. Implementation first

SaaS procurement has changed the very nature of procurement teams and their core skillsets. Today’s best teams are no longer just looking at contract value or the software as a platform – they are looking at how the software will be adopted more widely by the organisation or department. This is so relevant in government where teams are often large and diversely skilled, getting the whole team on board early is essential. The success of a project depends upon the integrity of the implementation, hence executing this phase flawlessly can prevent issues from creeping up further down the line.

  1. End to end ownership

SaaS will inevitably impact multiple teams and departments. Staying involved and engaged throughout all the stakeholder reviews is the only way procurement can meaningfully understand the requirements unique to each unit. Where we used to see procurement collecting opinions, this deeper level of understanding provides a more balanced overview of the suppliers competing for the contract, so you are comparing apples with apples. For our business, this generally starts with the event team, then moves through marketing, finance and IT.

  1. The skill set

The single truth of a SaaS is it should improve your efficiency, ideally reducing the number of vendors you use. This, in turn, reduces risk, contracts, manual processes and overheads. To drive a more efficient procurement timeline, with stakeholder engagement still high at the critical onboarding phase, government organisations need to invest in personnel with a unique skillset. They will need to repeatedly bring multiple stakeholders across numerous teams together and extract the complex ways SaaS will impact, improve or challenge them.

It’s a common mistake to have a ‘techy’ run this process. While they may understand the technical implications, we frequently see the engagement efforts derail due to the lack of experience in meeting facilitation.

  1. Operationally centric

Procurement based on contract terms and price is setting itself up for failure. Conversely, striving for operational excellence hallmarks the most successful outcomes. We are seeing the best procurement teams asking to complete pilots. Most SaaS providers will have a testing platform alongside their production platform.

  1. Don’t just test the software, test the integrations too

Integrations are a critical part of the SaaS procurement process. Look at how the software works within your own software climate – often something difficult to change within government. Determine the short term and long term goals and ask how the platform can fit into that. How will the data flow? What are the advantages and the costs to deploy?

Leaders in this field are testing the integrations in pilot phases, ensuring they work with existing software, CRM, MA, financials, membership software, etc. Integration teams from the vendor and client agree on the integration piece and test with dummy data for a full end to end review.

It’s also important to ask: what is the ROI of those integrations and what are the cost savings? Cost of implementation is no longer the primary focus, as organisations instead look to cost reductions of replacing manual processes and headcount reductions. The value inherent in provision of real-time analytics and big data enable further cost savings or revenue generation.

  1. Work in partnership

If you want the SaaS vendor to provide a project team to assist in the deployment, meet the team – not just the sales team. Make sure the team is local, has the resources, and will be dedicated to your organisation during the process. Ask who is running the project. If utilising the vendor’s professional services team, make sure there is an alignment between procurement so the expectations are unambiguous.

  1. Contract transparency

Make sure all of your internal stakeholders understand the contract. Previously a tightly-held document, we are seeing an evolution into contract transparency from the top tier procurement teams. The best implementations occur when significant time is invested in multi-team consultation and onboarding after the contract is signed, with positive uptake and a sense of ownership driving optimal engagement. Conversely, where stakeholders are given no sense of ownership or empowerment we are seeing poor adoption rates, departmental stand-offs and resentment from lack of buy-in.

  1. Own the onboarding

Most successful procurement teams have KPI linked to the successful outcome of the project implementation, not the contract value. There has never been better reason for procurement to have a part of the onboarding process, involving multi-team training of all stakeholders and any third-party agencies that may have interactions with the SaaS. If this process is not driven powerfully internally, then the project will stall here, no matter how motivated the vendor is. Disenfranchised stakeholders, under-skilled users, and lack of internal project management will quickly derail any SaaS uptake into your business.

  1. RFP

Surprisingly, software RFP have not evolved well with the digital era. Often they are a technically focused generic checklist of features, as opposed to focusing on organisational objectives. Make sure your RFP is up to date, has had input from the various departments and stakeholders, and is aligned with the its overall needs. Here are some of the more important, but often omitted, questions from RFP:

  • Security and compliance

Many organisations have multiple procurement teams. Australian banks and some government departments, for example, often have a security procurement team who review the security aspects of the platform and contract. Procurement teams must be aware of the compliance regulations, specifically when it comes to sensitive information. Being an informed consumer is key to success here; things to consider when developing your checklist are:

  • Where is the data stored?
  • What level of data security standards have you reached?
  • What level of encryption do you hold your data to?
  • Support

How will the platform be supported? How will the team be supported? Where is the support service located? Is this inclusive to the contract value or at an additional cost? Support can be very difficult to measure, so it is an extremely variable cost unless it is inclusive.

  • Team location

The beauty of a SaaS is that you are not bound by the location of a team of people – until you want specialised support or a professional services team to implement your projects for you. If there is any possibility this will be the case with your organisation, then it is important you know where the team will be located, how responsive they can be, and if they have the resources to dedicate time to you during the implementation process.

Not surprisingly, it is the big consultancies, insurance companies, banks, technology companies and leading associations that are doing these things best. However, with accessible technology there is plenty of opportunity for government agencies and organisations to join the best-practice leaders for SaaS procurement. In a world of increasing scrutiny around data security and compliance, efficiency, and the importance of emotional intelligence, there is exciting scope for procurement professionals to step into this void and powerfully impact the return on investment which a well planned and executed SaaS procurement affords.

Alan Ivory is the vice president- global professional services for event management SaaS provider etouches.

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