In a recent KPMG webcast including Barry Dubin from Sinclair Broadcast Group, Inc. and Anthony Kulesza of Blue Shield of California, we discussed their post-Oracle-cloud transformation experiences, and specifically the lessons they learned and what they wish they had known before they started. Joining the conversation was Kari Mahaffey from Oracle.
Whether you’re considering a similar project or have already started on one, there’s nothing like hearing experiences first-hand. Some key points to consider include:
1. It’s not a project. It’s a journey.
Perhaps the most important lesson is that a cloud transformation isn’t a project; it’s a journey and a commitment to continuous innovation. The cloud is far more than just moving your software solutions from your data center to someone else’s, where their IT team manages the software and servers instead of yours. It involves a completely different business model. A driving force behind this model is the rapid-fire upgrades that the cloud brings. Oracle, for example, updates its ERP solution every quarter with upwards of a hundred significant changes. You don’t have the option to stand still as you did with an on-prem solution. You don’t dictate the pace of change or innovation – the cloud solution provider does.
That’s a real culture shock for organizations used to legacy systems where significant upgrades happened at most every three to five years. That pace afforded plenty of time to plan. No more. Now your ability to react and respond has to be woven into the fabric of everyday business instead of a discrete once-every-three-year project.
It’s not just about protecting your investment (although that’s a critical consideration, of course) – it’s also about maintaining strategic momentum. Keep in mind your competition is getting these same upgrades, too.
And so a key takeaway was that it’s essential to have a Sherpa, a guide, or a journey companion (however you prefer to characterize it) who has been down the road before, who knows how to recognize and anticipate both opportunities and pitfalls, and who won’t disappear when the initial implementation is complete.
2. Don’t underestimate the post-migration effort.
Hand-in-hand with accepting the idea of continuous innovation is appreciating the effort required to maintain it. One of the biggest missteps that organizations make is failing to anticipate and properly plan for life after initial deployment. As Barry Dubin confessed, “our support model was added only after the fact. Initially, we didn’t give it a lot of thought – that was our mistake.”
“We turned mostly to ‘body shops’ to augment our staff,” Dubin explained. “But in 2019 we started looking at a consultant model. We had a lot of open tickets – about 300 – and 4 different vendors who were overwhelmed. We were not equipped. We were not taking advantage of new features and we knew we needed to change.”
It’s a common refrain. In a 2020 KPMG survey in which we asked 281 U.S.-based executives across a range of industries about their experiences in adopting new SaaS features and enhancements, 84% said they adopted fewer than half of the new features the SaaS provider has introduced since their initial implementation. The biggest barriers to adoption were a lack of technical resources and business resources to assess the business impact.
Estimated percentage of SaaS vendor's new features adopted by organization since going live:
Source: Managing your SaaS cloud environment report, May 2020
Anthony Kulesza concurred. “You must plan ahead for the support model. The biggest challenge you will face is keeping up the momentum and planning how to finance it…The key lesson was that it’s not easy. That was a surprise.”
Kulesza continued, “My advice, my bit of wisdom in hindsight, is that it’s essential to set up your governance and support model well in advance and then adhere to those policies. Define the rolls and responsibilities clearly and well in advance.”
3. Business resources are at least as important as technical ones.
It’s tempting to treat each new or modified feature introduced each quarter as a tech support or IT challenge. And without argument, these new features will give birth to issues that only your IT or tech support teams can address.
Consider, though, that every new feature can be a real disruptive force on the business. It might create a significant efficiency, opportunity or advantage, for example. But each is also likely to come with at least one catch. It might have a compliance or tax implication, or affect a KPI in some significant way. Your IT team or outsourced tech support vendor aren’t likely to be equipped to evaluate features in this way.
The strategic implications are at least as significant as these tactical ones. IT can help you implement a new feature in your business, but only business leaders can decide “how can I transform my business to take advantage of this disruption?” As one webinar participant put it, “You need someone who can say, ‘of the 25 new features this quarter, which five make sense for us?’ It’s not just about implementing or testing the upgrade, but about how do we change our organization to take advantage of them?”
As Oracle’s Kari Mahaffey noted, “You need your best people on this, both internally and externally. You really need an SI or advisor that has those resumes.”
Dubin adds, “It’s more than just rolling out new releases and handling support. It requires knowledge of how to take advantage of the features from a business and organizational perspective.”
We’d love to talk to you about your cloud transformation needs and challenges and help you think about how you maintain and continuously enhance the investments you have made, or are about to make, in your transformation.
To hear more on lessons learned and how these organizations are driving continuous innovation after their cloud transformation go-lives, click the button to access the full webcast replay.
The views and opinions expressed herein are those of the interviewees/survey respondents/authors and do not necessarily represent the views and opinions of KPMG LLP.