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How do you account for the lesser training cost with SAAS vs. conventional?

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Topic Expert
Bob Scarborough
Title: CEO
Company: Tensoft, Inc.
(CEO, Tensoft, Inc.) |

There are a few ways to interpret this question – I am interpreting it as follows: “How do you explain the lower training costs associated with SaaS when compared to conventional on premise models?”

There is a general expectation, especially in the under $50M revenue company size space, that implementation of SaaS software is lower cost than traditional models. At times you will find the expectation that no training cost is required at all. However, most experienced folks expect there to be needed support and training for any type of transition.

In general this expectation is backed up by what the market offers. There are definitely some tasks that are no longer required in a SaaS world – starting with system administration training and support. There are a number of factors to consider related to this lower cost which I’ll attempt to list below. There are also some cautionary notes for Executives looking to manage training and implementation costs at the end of this response.

Drivers for lower training and implementation cost:
1) There has been a general trend in ERP over the last ten years to move toward a best practices implementation model. At its most basic this model states there are a number of configuration options that most companies default to based upon market and product experience – and these assumptions are built into the implementation rather than covered uniquely each time. At its best this model should be adapted to your specific industry (vertical) so that the best practices are based upon comparable organizations.
2) There is an increased ‘do it yourself’ expectation that goes with SaaS modules. This expectation is supported by online training sessions (recorded or otherwise), short remote training sessions instead of day long commitments, and the general expectation that the customer team will roll up their sleeves and contribute heavily to the effort.
3) There is a general expectation that software is getting easier to use – or that web based software should be easy to use. This is an area to be careful – since complex business processes or configurable options do take background training. On the whole though systems have become more generally understood with some convergence of transaction metaphors.

A couple of cautionary points to consider:
1) There still are custom implementations in the world – where the project is unique to your company, where everything is configured uniquely to you, where the software is adapted to your exact specifications. Most people do this sort of implementation only when the uniqueness adds to your competitive positioning in the market rather than as standard practice.
2) SaaS does tend to commoditize some types of functionality. It is best to think about this related to training as well – looking at the areas that add the most value to your company and the areas where you expect to be business standard. Expand or contract the levers for training and support where you receive the most benefit.
3) Be careful in your transition from the sales process to your implementation process. If you need to document the expectations discussed in training for review internal to your company do so. Purchasing a best practice based, and streamlined for do it yourself implementation and then managing it like a unique customized training implementation leads to generally poor results.

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