Beyond labor arbitrage

Under economic pressure, many companies are trying to find savings in their cloud platforms. This may include looking to third parties for low-cost labor on application support.

But in most cases, labor arbitrage has been tapped to the max. A better option is to seek strategic collaboration for the ongoing optimization of a software-as-a-service (SaaS) platform.

This optimization, often delivered through managed services, is best when it focuses on sustained cost-effectiveness, not short-term cost reduction. In this way, companies are more likely to realize the cost promise of the cloud while also driving other objectives in the business case.

Keep your eye on the prize.

After implementing a platform, the original objectives—such as improved data visibility, transaction speed, regulatory compliance, employee experience, or responsiveness to change—often get lost in the chaos of the day. Lack of attention to them can increase the total cost of ownership.

To achieve a long-term return on cloud investments, look for a managed services provider who combines tech expertise, industry-specific process expertise, advisory capabilities, and alliances with SaaS providers to bring a strategic perspective to platform management, helping you:

Aim for the correct targets

Leading SaaS optimization providers keep the business case in the foreground, aligning day-to-day activities to a higher purpose. For example, they may perform ongoing systems integration and process improvements to support strategic priorities, from getting the right reports out of the system to accelerating a process.

When deploying new functionality in periodic software updates, look for a managed services provider who can identify the positive impacts, such as improved security or operational resilience, while managing potential disruptions, such as changes to desktop procedures.

Reduce technical debt

Most companies set out to reduce IT operating costs through cloud computing, but too often, they fail to plan for long-term implications that can erode the savings.

One such situation is when frustrated users, unable to get the dashboards or other functionality they want from the software, take SaaS enhancements into their own hands. This “shadow optimization” can include process workarounds and additional apps, creating more of the tech debt that the SaaS implementation sought to remove in the first place.

A smart approach to ongoing SaaS optimization can prevent these scenarios by strategically deploying new functionality, managing the organizational impact, and ensuring the platform meets the business's needs. Some providers also offer continual process mining to identify deviations or redundancies and apply self-healing code.

Prepare to reap the benefits of GenAI

How can you take advantage of new generative AI features that are showing up in SaaS platforms? Do you need to consolidate or modernize your data first? Should you incorporate additional GenAI technologies to improve operational workflows?

Work with a managed services provider who has visibility on SaaS providers’ AI roadmaps and multidisciplinary advisory capabilities to help you explore other opportunities. Indeed, according to a recent study by KPMG in the US, only 12 percent of organizations are building GenAI solutions in-house, while the majority are buying, leasing, or partnering with vendors.

When you choose a managed services provider who prioritizes strategic collaboration, SaaS optimization goes beyond a myopic focus on “what can you save me today?” Instead, the focus becomes sustained value, which includes ongoing cost reduction and other objectives in the business case.

Learn more about KPMG Managed Services.

Please visit Going Beyond: Managed Services for an archive of past blogs.