André Christ is CEO of LeanIX, the SaaS platform to plan and manage the Continuous Transformation journey of Corporate IT and Product IT.
getty
If your business is not building or delivering digital experiences to customers, you are likely losing to a competitor that is. In order to make digital experiences possible, software is always in play. Technology organizations are typically faced with the following question: Should we build our own software in-house or buy it? While there are benefits to both, the trend has increasingly been shifting toward buying it. Why? There are several reasons, including developer scarcity (i.e., not having the talent on-hand to build proprietary software), the fact that software built in-house is harder to scale, the fact that cost of maintenance of in-house software is high and its long time-to-value since building your own software takes much more time than buying a pre-built solution.
However, as more software is purchased, managing it all becomes a nightmare. What has arisen as software toolchains become vaster and complex are centers of excellence (COE). From a software delivery perspective, COEs are either individuals or teams that are highly experienced in each tech competency, that are champions of best practices innovation and that often lead training and knowledge sharing across the organization. Let’s take a deeper look at COEs and the evolution toward a software-as-a-service (SaaS) center of excellence (SCOE).
Current State of COEs
COEs are mentioned here in plural for a reason — multiple are needed within an IT organization. COEs in this context might be focused on a certain technology or process like the cloud, AI or DevOps. Having several COEs enables innovation and differentiation through collaboration. A COE is not just limited to training and knowledge sharing, but it also becomes the glue between operational and leadership teams.
One of the more common COEs that has come about in the past five years or so is the cloud center of excellence (CCOE). Cloud migration is a growing trend as organizations look to reduce costs, achieve higher levels of security and compliance and deploy faster. As adoption continues to rise, organizations have realized the need for a CCOE.
While the benefits of moving to the cloud have been proven, no one ever said it was easy. As organizations move to the cloud, should they implement a lift and shift strategy or rebuild entirely? Is multi-cloud or hybrid cloud the best option? How does this migration impact multiple departments? There is a lot to consider and manage, and there is a lot of room for creativity when it comes to this initiative.
That’s why CCOEs have become more prevalent to help guide teams efficiently and methodically — they have become the lighthouse for cloud adoption in organizations. CCOEs are the main point of contact for the cloud, and their ability to provide information organization-wide is their biggest asset. This is just one example of a prevalent COE; however, a new COE is starting to emerge, as SaaS applications are entering a new frenzy.
The Rise Of The SaaS Center Of Excellence
SaaS has been on the rise for years and shows no signs of slowing. Currently, there are more than 10,000 SaaS applications on the market today, and in 2020, almost 75% of organizations reported that nearly all of their apps were SaaS. Additionally, SaaS has been predicted to reach a market size of $265 billion by 2025. Why are so many companies turning to SaaS? SaaS allows for greater flexibility, greater scalability, easier integrations and faster time to value. Just as cloud migrations have needed a COE, now SaaS needs a COE, too.
A benefit and a challenge of SaaS is how easy it is to buy. These apps typically start at a low cost point, and they’re often ready to use right after purchase. The challenge is that any employee can “swipe” the company credit card on a SaaS app to help them with their daily work, and this adds up quickly. In companies with thousands of employees, they may be dealing with hundreds or more individual SaaS apps with limited visibility into total costs, security and compliance issues and more.
This is where the SCOE is needed. An SCOE can help wrangle the sprawl of SaaS and be the guiding light for SaaS adoption and implementation within the organization. Despite its challenges, SaaS is still beneficial and enables many employees to do their job better; it just needs leadership and management.
Further, as COEs for cloud, SaaS and other areas within an organization grow, it’s important that they collaborate and work together. COEs should be communicating regularly, sharing knowledge and learning from each other’s best practices. Just because COEs have their own competencies does not mean they should be working in silos.
COEs have proven to be successful across IT organizations as new technologies and processes continue to surface. Now that the golden age of SaaS is here, it’s time for organizations to consider creating an SCOE to manage complexity and growing costs and be the beacon of innovation and best practices for SaaS within the company.
In future articles, I will outline the structure of an SCOE, what roles are needed and the responsibilities within that need to be managed.
Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
