It’s hard to think of a business process these days where you could NOT discover digital tools just by quickly googling for the key terms. Type “X management app” by replacing “X” with whatever your top of mind activity conducted within business surroundings happens to be and you’ll likely be greeted with more options than you’d ever have time to shift through.
A study from 2014 indicated that the average information worker in a large enterprise already used 36 different cloud services at work. I don’t think anyone would dare to suggest that number has gone down since then.
Using cloud based apps that offer targeted functionality for specific tasks is a great way to both reduce the barrier for adopting new technology at work and also scale the user experiences to fit onto any screen instead of the traditional PC monitors. No one is willing to wait around for the upgrade cycles of monolithic enterprise systems anymore, when SaaS options like this are all around us.
The one question we need to pause to think about for a moment before jumping from the business problem to the first viable looking app solution is:
In what has become a standard way to present the pricing of cloud based apps, you’re very likely to find a pricing table on the website of the service provider (unless there’s only a “please contact sales” button, in which case you know it’s going to cost A LOT). There will be a few tiers available (like Starter, Basic, Professional, Enterprise), with a per user per month fee shown in big numbers at the top. Features or the app will grow as you move higher up, and one of the pricing tiers in the middle will be promoted as “best value”. Here’s a nice example from Freshdesk:
Multiply the subscription fee with the number of users and you get the total cost of using the app for your team/unit/organization for one month. Simple! Well, that is the simple part of the calculation for sure, but the actual cost from committing to using yet another app is probably going to be significantly higher. User training, data integration, system administration, support services, governance – there are many areas that are affected by adding a new piece to the application puzzle.
The alternative to picking the best-of-breed apps for each specific workload from the great wide ocean of cloud service providers discovered via Google is to adopt a platform strategy instead. Rather than evaluating the needs of individual departments or teams in isolation, you start by drawing out the big picture of what data needs to be processed in your business, by whom, through what interfaces, with which integrated systems. From this foundation you work your way up to the app functionality, instead of starting from the “insert credit card to buy another cool app” direction.
In the Microsoft world, you would analyze the capabilities available in Power Platform, plan how to leverage Common Data Service (CDS) and its Connectors for integration, then map out the needed Power Apps for making data actionable for users and Power BI reports for delivering insights from that data for business management.
If you’ve decided to go down the platform path, it still doesn’t mean there would not be a €/user/month price tags for apps that run on the chosen application platform. Unless you’re taking the long road of custom developing each application from scratch on top of raw cloud services sold as gigabytes and API calls, there may well be a user specific license component involved. First, there’s the price you pay for an Application Platform as a Service (aPaaS) that removes much of the software development project work from you and offers tools for building business applications in a no-code/low-code way. Then there might be the packaged apps like Dynamics 365 Sales that you purchase from Microsoft, or third party apps built by MS partners on top of the very same Power Platform.
The subscription costs always add up to something that’s likely higher than the price of one coffee cup per day – that tired old analogy used for anchoring the price of apps from the digital world into something encountered in the physical world. Still, us human beings are quick in picking out the one figure from the pricing models that is easy for us to comprehend. We then use that figure for measuring it against other figures we have in our head about the known cost of things in the world around us. Without much analysis work at all, in almost a heartbeat, our brains will produce a reaction that can be like:
“We can’t afford to buy a €80 CRM license for all employees who interact with customers!”
“It’s cheaper to develop custom software for this than to keep paying €10 for each user every month!”
In isolation from any other factors involved in the equation, that initial reaction might be true – just as well as it might be false. That PUPM (per user per month) figure has fairly little to do with whether the deal is good or not, since this is not a question of owning a cup of coffee (or just the contents of that cup) after purchase. Neither is it an investment like buying a piece of land to set up a new factory, whereby you actually become the owner of something after the deal. With subscription services like cloud apps, you don’t really take ownership of anything just by signing up and entering the credit card details.
You are right, though. There’s certainly plenty of services being offered to any organization that they simply can’t afford, but the real reason often isn’t in the subscription fee itself. What you very likely cannot afford is adding yet another tool into your systems portfolio that is:
- Requires extensive integration or customization work to play well with your business data
- Leaves a lot of manual copy/paste work for the end users
- Is used infrequently / not adopted into everyday work practices
- Creates new administrative hurdles for IT
- Introduces compliance risks for sensitive customer data
Those are examples of real costs that may incur as a result of choosing a SaaS. You can’t easily put a simple “€99/month” price tag on any of them, yet I’m sure anyone working with IT solutions in the business context can identify plenty of existing systems that are costing significant amounts of money via these leakages in their lack of fit with the organization’s overall application architecture.
What we at Forward Forever believe in is that it’s time for organizations to stop being merely subscribers to a wide range of different cloud apps and rise up to become the true owners of their digital tools. No, this doesn’t mean that you should build each and every app yourself, of course. It’s about acknowledging the fact that the modern Application Platform as a Service (aPaaS) offerings out there are:
- Capable of consolidating/replacing fragmented SaaS or on-premises apps onto a single platform
- Possible sources of significant cost savings if adopted across the whole organization
- Disruptive to the process through which you’ve previously acquired and/or developed your business apps
- Require a formal ownership structure within your organization, to ensure proper governance and business support.
In future blog posts we’ll continue exploring what factors and steps there are along the journey to leveraging new low-code app development environments like Microsoft Power Platform.
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