5 Reasons to Embrace As-a-Service Delivery Models
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The concept of bringing applications, infrastructure and business processes together and delivering them “as a service” has advanced more rapidly than expected.
By Fabrice Dersy
Not long ago, the accepted wisdom was that as-a-service was not mature as a delivery model for business and IT processes. A 2015 survey on the subject was unequivocal: 68 percent of service buyer respondents believed that core enterprise processes would not be delivered as-a-service for five or more years.
However, the concept of bringing applications, infrastructure and business processes together and delivering them “as a service” has advanced much more rapidly than expected. Just one year later, in late 2016, a second survey by HfS Research found that 56 percent of business leaders were looking to adopt as-a-service features within two years.
Why this sudden change of heart? We’ve identified five drivers that are behind this acceleration of as-a-service as the go-to delivery model:
1. Competition: Businesses that have embraced as-a-service are flourishing. Those that haven’t are increasingly wondering why they’re putting themselves at a competitive disadvantage.
2. Agility: The global economy is arguably more uncertain than at any time since the second World War. Businesses need to be able to react quickly to rapidly changing conditions, and what better way to do that than with as-a-service delivery?
3. Speed: The innovation cycle has accelerated, and the old days of first-mover advantage are gone. Today, businesses need to continually innovate and reduce time-to-value for new products and services. As-a-service enables them to do that.
4. Advanced analytics: Business understand the need to use advanced analytics to improve delivery and customer service through better insights. As-a-service reduces the time it takes to act on insights, thus helping to secure competitive advantage.
5. Business outcomes: Organizations are attracted to as-a-service because they’ve seen how it ties directly to business outcomes. Businesses go to a service provider with a set of outcomes they want to achieve, and the service provider tailors a solution that delivers on those outcomes. What could be simpler or more effective?
Ultimately, companies are recognizing the promise of as-a-service and its ability to help them meet their business goals in ways that are both tangible and measurable. However, this promise can only be realized if organizations overcome several barriers to success.
Inhibitors of As-a-Service Adoption
First, organizations need to review how they buy these new services. Traditional commercial models that are fixed-price or full-time employee-based don’t work in the as-a-service world. Instead, value needs to be defined and measured in new ways that are tied to unique business outcomes.
Second, using point solutions may cause integration and vendor management challenges. So work with service providers that offer an end-to-end solution across a function or process.
Third, the technologies that underpin the as-a-service model have matured at different rates. Only in the past few years has there been sufficient adoption of public and hybrid cloud, for example.
Fourth, multiple stakeholders within a company can make approvals more complex, given that buying as-a service is different from purchasing standard services. Stakeholders must agree on a clear set of business-led objectives that can then be enabled by the IT organization.
Finally, the as-a-service delivery environment is much more fluid than organizations may be comfortable with. Providers will need to continually demonstrate their value to maintain their relationships and build strategic partnerships with clients.
Evaluating Five Entry Points
If your organization is willing to accept the changed nature of business process and IT delivery that comes with as-a-service, it is set to start a digital transformation. But where should you begin? We have identified five entry points and recommend that you consider which ones would work best for your business.
1. Start with technology. By migrating IT functions to the cloud, you can take an incremental approach to as-a-service—one application or process at a time.
2. Automate processes. Businesses with an established infrastructure and processes may want to look at how they can drive flexibility and accuracy through automation.
3. Adopt platforms. Many leading organizations are leveraging external resources to create new ecosystems and synergies to drive sustainable growth. By plugging into one of these ecosystems, a business can use its services and capabilities as-a-service.
4. Deploy analytics. For many businesses, the need to gain a completive edge through analytical insights makes a good entry point. For example, analytics can help spawn insights about how to reduce time to market or shorten phases of R&D processes. As-a-service can enable such companies to respond quickly and effectively to those insights.
5. Use renewals as an opportunity. A contract renewal or the natural end of a program’s lifecycle presents the perfect opportunity to review as-a-service alternatives.
There are many ways to embark on an as-a-service journey, but it’s important to get started. The promise of as-a-service is compelling: process and IT delivery centered on real business outcomes.
One thing is certain: If you sit on the sidelines indefinitely contemplating when to make the move, you’ll lose ground to increasingly agile and efficient competitors.
Fabrice Dersy is a senior managing director and an "as-a-service" lead in Accenture Operations.