Mastering SaaS Implementation: 4 Tips for Success

Software as a service (SaaS) has reshaped business operations through its scalability, cost-effectiveness, and support for remote work. Accounting for 34% of the $491 billion spent on cloud technologies in 2022, SaaS is the largest segment of global cloud spending. But implementing a SaaS solution—especially when migrating from an on-premises legacy system—can present substantial challenges for a project manager, including unplanned expenditures, lengthy implementation timelines, and the orchestration of large, highly skilled teams.

As the growth of SaaS is expected to continue, fueled by digital transformation initiatives and AI advancements (popular SaaS products include Open AI’s ChatGPT and API, for example), it’s essential to be aware of the complexities involved in a SaaS implementation project and how to address them effectively.

This article describes the characteristics, benefits, and risks, as well as the necessary implementation and change management strategies, for the successful integration of SaaS into various types of businesses. Drawing from my extensive experience spearheading these types of projects, I provide real-world insights and examples to illuminate the path toward successful SaaS deployment.

Why SaaS?

SaaS is a transformative business and distribution model for digital products. It started to see significant growth around the mid-2000s, with the arrival of major SaaS companies such as Salesforce, which launched the first major SaaS customer relationship management (CRM) solution, and Google, with its Google Apps suite of productivity offerings.

The real explosion in growth occurred in the last decade, with the expanded availability of cloud storage and the reliability of internet connections making cloud-based services cheaper, more feasible, and attractive to businesses. Remote work pushed this adoption further, as companies needed to speed up their digital transformation efforts and respond to an increased demand for apps enabling online services like telehealth, e-learning, and e-commerce.

The SaaS business model encompasses several key characteristics that can benefit businesses:

• Market orientation: The model caters to both individual consumers (B2C) and businesses (B2B).
• On-demand access: SaaS solutions are accessible anytime, anywhere, via the internet, making them suitable for companies with remote or dispersed teams.
• Standardization: All users access the same version of the software, ensuring uniformity of data and functionality across an organization.
• Hosting: The SaaS provider hosts the software on its distributed network of servers, known as a cloud, which is generally more secure than a company’s own servers and allows exceptional scalability and accessibility.
• Maintenance: The responsibility of maintenance, including updates and bug fixes, falls on the provider, often leading to cost savings for the user and faster deployment of new features.
• Integration: APIs enable easy integration with other systems, customization to suit unique business needs, automation of tasks, and scalability.
• Customized pricing models: Models are flexible, with standard options including usage-based, per-user, or feature-based pricing. Subscription models eliminate the need for substantial upfront investments.

Understanding the Need for Implementation

Most companies assume that—like the popular SaaS services Netflix and Spotify—SaaS products should require little to no implementation because their delivery occurs through the internet and should be plug-and-play. In most cases, this assumption could not be further from the truth.

As complex as implementation can be, it is worth it. For example, I was part of the implementation of a SaaS-based airline core system for a major Latin American airline that was grappling with outdated legacy systems that hindered its operations and customer service. It needed a scalable and flexible solution to handle its growing passenger volume and to improve efficiency. The implementation required meticulous planning, extensive testing, and collaboration with many of the airline’s teams, as we faced the challenges of migrating complex data structures, integrating various airline modules, and ensuring a seamless transition without disrupting operations.

But once implemented, the SaaS core system enabled the airline to streamline operations and provide an exceptional customer experience. Real-time updates and efficient flight management capabilities allowed the airline to handle increased passenger volume, and the scalability of the SaaS solution ensured it could adapt to changing demands.

Based on my experiences and those of my colleagues all over the globe, I put together the following best practices for SaaS implementation that can help project managers lead this process regardless of company size or industry.

1. Know the Challenges

I once worked on an implementation project for a midsize company that was transitioning from an outdated on-site system to a SaaS email system; implementation quickly became complex, involving data migration, settings configuration, and integration with existing clients and devices.

From this experience I learned the necessity of taking a strategic approach and carefully considering the following factors:

• Risks for customers and processes: Implementing a new SaaS solution can pose risks such as data loss, system downtime, and significant workflow changes, all of which can adversely impact the customer experience. Evaluate these risks before transitioning to a SaaS solution.
• Resource requirements: SaaS implementation can be resource-intensive, necessitating adequate funds, staff, infrastructure, and technical expertise. Ensure that these resources are available for successful project completion.
• Compatibility and integration: Not all SaaS solutions are compatible with existing systems or offer the same functionalities. Assess compatibility, data transfer procedures, security measures, and the impact on existing processes before deciding on a SaaS.
• Management of old and new systems: If the legacy system needs to stay operational while the new one is implemented, data integrity, security, and compatibility will need to be addressed in advance.

Despite all the challenges, the SaaS system brought substantial benefits, such as enhanced security, improved collaboration, and easier email management. It also provided the flexibility of accessing emails from any location or device, which reduced maintenance costs while allowing the IT team to focus on strategic initiatives.

2. Measure for Success

Metrics play a vital role in SaaS implementation, providing valuable insights into the success of the process. Organizations can track key metrics before, during, and after implementation to evaluate impact and identify improvement areas. This tracking is largely overlooked by many organizations involved in SaaS. According to the 2023 Snapshot Survey: SaaS and Cloud Spend Optimization & Automation, 64% of companies experience unplanned SaaS expenditures. The primary causes of this waste and inefficiency are reliance on outdated processes, inaccurate projections during license procurement, and a lack of promptness in decommissioning licenses when they are no longer required.

To avoid this situation, SaaS project managers must keep a close eye on the following metrics:

3. Don’t Forget the People

SaaS project managers share a common challenge: People resist change. Introducing a new system often generates fear and insecurity among employees, who may be concerned about its impact on their work routines and job security. McKinsey & Company points out that resistance from employees and management leads to the failure of nearly 70% of digital transformation initiatives. To mitigate this issue, I recommend implementing these change management strategies:

• Communicate the benefits of the new system clearly and frequently.
• Foster a supportive environment for people not yet entirely on board with the new processes.
• Identify early adopters willing to try out and promote using the new tools. These early adopters are instrumental in building trust and excitement among their peers.

During the SaaS email system implementation, my team organized sessions during which employees could practice using the new features and functionalities. These personalized trainings for each department focused on real workflows and enabled faster and more effective adoption.

Remember, people are crucial to the success of any project: Be prepared to provide proper training tailored to the specific needs of each team.

4. Choose a Cutover Strategy

Project managers can use cutover strategies to minimize disruptions and ensure a smooth transition to a new system while reducing the risk of data loss or system downtime. A cutover plan outlines the steps and actions needed to migrate data, users, and processes. It also defines the timing and sequencing of the migration and identifies contingencies or rollback plans.

Before my implementation of a SaaS CRM system for a growing sales-driven organization, the company needed help managing customer data in a centralized system that tracked sales activities and nurtured customer relationships. The solution had to be capable of scaling with its expanding customer base and providing real-time insights to drive sales growth. I decided that evaluating several cutover strategies would be crucial for the success of this SaaS implementation plan, as each offered different benefits and considerations based on the organization’s specific needs and risk tolerance.

By analyzing the pros and cons of different strategies, project managers can make informed decisions that align with organizational goals, resources, and overall implementation objectives.

Here are some common types of cutover strategies including their benefits and risks:

• Big bang strategy: A wholesale switch to the new SaaS system all at once, during which you immediately turn off the old system. The advantage of this strategy is that it can be quick and efficient, with a reduced timeline for implementation. However, the risk of failure is high, and there is no fallback option if something goes wrong. Businesses must consider the potential impact on their customers, processes, and operations if the implementation is unsuccessful. The new system should be thoroughly tested before implementation to minimize the risk of failure.
• Parallel strategy: Running both the old and new systems simultaneously until the transition is complete. This strategy reduces the risk of implementation failure, as the old system can be used as a fallback in case of problems. However, it requires significant resources, including adequate budget and staff, to maintain both systems. Businesses must consider the cost and resources needed to keep both systems operational during the transition period.
• Phased strategy: Migrating users or systems sequentially, with each stage building upon the previous one. This strategy has a lower risk than the big bang strategy and requires fewer resources than the parallel strategy. But it may take longer to implement, and compatibility issues may arise as different systems are integrated. Businesses must consider their planned timeline for implementation and the potential impact on operations during the transition period.
• Incremental strategy: Migration is done in phases, usually by functionality. This strategy allows for a more flexible migration process and reduces the risk of a significant impact on operations during the transition period. The downside is that managing the migration process in small chunks requires considerable resources, including money and people. Businesses must consider the cost and resources needed for the implementation and the potential impact on operations during the transition period.
• Hybrid strategy: Combining two or more strategies based on the suitability of the situation. For example, a hybrid strategy might involve a big bang strategy for critical systems and a phased strategy for less critical systems. A hybrid strategy allows a project manager to tailor their approach to their business’s needs, reducing risk while maximizing efficiency. It requires careful planning and coordination among different teams to ensure a seamless transition.

For the SaaS CRM implementation, we adopted a phased cutover strategy. This allowed us to migrate sales teams and customer data sequentially, minimizing disruption to ongoing operations and enabling a gradual adoption of the SaaS CRM functionalities. The phased approach enabled me to effectively manage the complexity of integrating the new system with existing business processes and third-party applications.

When comparing these migration cutover strategies, always consider the potential impact on the business, such as the risk level, resources needed, compatibility and functionalities integration, and the operational complexity of managing two systems.

The following table compares cutover strategies and their impact:

Remember to account for stabilizing time after the migration. During this period it is crucial to monitor the new system closely so it works as intended and any bugs or unforeseen problems can be addressed promptly. Having a rollback strategy in place can help mitigate issues found during the stabilizing time.

Implementing SaaS solutions is essential for companies to stay competitive in today’s digital landscape. The benefits of SaaS—scalability, cost-effectiveness, and support for distributed teams—are undeniable. However, transitioning from legacy systems to SaaS systems can have a significant impact on tasks such as data migration, integration, and change management.

To navigate these challenges, project managers need to understand the intricacies of SaaS implementation, including evaluating risks, resource requirements, and compatibility, and managing old and new systems. They must also consider measuring success through key metrics, addressing human factors through change management strategies, and choosing the right cutover strategy to minimize disruption and ensure a smooth transition. If you haven’t helmed a SaaS implementation plan yet, consider this your key to unlocking this revolutionary software delivery model.