Managing your cloud SaaS environment...All of the major cloud SaaS providers have been growing their...

Managing your cloud SaaS environment

kpmg.com

2020 survey on cloud SaaS support models and managed services

12020 Managed Services Survey Report

Table of contentsExecutive Summary

Key takeaways

Detailed findings

Adoption of New Features

Support from Cloud Vendor

Contract terms and renewal

Open Service Requests

Support Model

Outsourced Provider

Survey demographics

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© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks of KPMG International. NDP079283-2A


Managing your cloud SaaS environmentExecutive summaryFor this first annual survey, KPMG asked 281 U.S.-based executives in a range of industries about their experiences in adopting new features and enhancements to existing cloud applications. The responses were based on the regular release schedules of major technology platform vendors, including Oracle, Workday, ServiceNow and Coupa. The study did not include other notable companies such as Microsoft, SalesForce and SAP. About 22% of the respondents were C-level executives, and 75% came from companies with $1B or more in revenue.

All of the major cloud SaaS providers have been growing their business at 25% YoY growth and clients have been shifting their applications to the cloud. Substantial R&D investments are being made into new product features, and new features and functionality upgrades are provided on a regular basis – even quarterly – by SaaS vendors.

However, this survey illustrates that it is difficult for clients to keep up with ever-changing cloud applications. This

growing need for businesses to consume new upgrades and enhancements is very different from an on-premises cycle, where upgrades might happen every few years. The rapidly increasing challenge for companies is how to actually adopt new features, evolve their systems, and add innovations for the future. Companies need to find the best support and managed services models to effectively manage their SaaS environments in order to take advantage of the numerous advantages afforded by the cloud.

Overall, most respondents are satisfied with their SaaS vendor and plan to renew their contracts; they are also generally happy with their support model. While many of these companies have benefited from the move to the cloud, very few are taking full advantage of the continuous innovation that the SaaS vendors are releasing with each update. Clients can unlock additional value from their SaaS investment by moving to an agile support model with both business and technical resources supporting their SaaS applications.

32020 Managed Services Survey Report© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks of KPMG International. NDP079283-2A

Key takeawaysNew features from cloud SaaS providers are often not deployed

Only 16% of respondents adopted 50% or more new features

The biggest single barrier to the adoption of new features is lack of resources to assess the impact on the business

#1 with 37% of respondents

Internal IT is the most prevalent support model

71% of respondents

A majority of respondents believe their SaaS vendor provides strong or very strong support for the adoption of new features

57% of respondents

Many respondents do not have a release planning process and do not have automated testing tools

21% of respondents did not know or did not have a process

62% did not know or did not utilize automated testing tools


Adoption of new features

Approximate number of new features NOT implemented:*

Less than 10% 26-50% 51-75%10-25% More than 75%

18% 37% 29% 11% 5%

Estimated percentage of SaaS vendor’s new features adopted by organization since going live:*

* Data includes respondent organizations using the following vendor SaaS Solutions: Oracle, ServiceNow, Workday, Coupa.

19 New SaaS features not implemented

Kind of release planning and ways of deciding on new functionality:

of respondents did not have or did not know their release planning process21%


Single biggest barrier to adopting new functionality from vendor:

Yes 28% No 39% Not sure 33%

Resources to assess impact on your business (37%)

Technical resources (31%)

Documentation (15%)

Testing requirements (12%)

Other (4%)

37%Resources to

assess impact on your business

Decision to re-implement SaaS solution in the next year (for example, to respond to changing business needs):

82% of those that plan to re-implement have adopted less than 50% of the new features.


Support from cloud vendor

Very weak Average StrongWeak Very strong

6% 36% 37% 20%

Rating of support and assistance from SaaS vendor for adopting and implementing new features:*

1%


Satisfaction level with SaaS solution:*

1 2 3 4 5

Very Unsatisfied Satisfied Very Satisfied

0

20

5

25

10

30

15

35

40


Extra support for global, 24/7 access to technical support, knowledge, tools and best practices

Extra support for proactive resources to prevent problems, speed resolution, and simplify upgrades

Extra support for dedicated support resource or team

Collaboration with vendor on new customized feature or enhancement

Price holds or fixed discounts for future purchases

Advisory board to set the direction for future product releases

Contract terms and renewal


Time until contract renewal with vendor:*

Next 12 months (14%)

1-2 years (36%)

3-5 years (29%)

5+ years (12%)

Don’t know (9%)

36%1-2 years

Contract renewal decision:*

Yes (65%)

Unknown (26%)

No (9%)

“Special terms” with vendor:*

44%36%

20% 25%

37% 37%

65%Yes


Open service requests

Average length of oldest open service request:*

Average number of open service requests with SaaS vendor’s support:*


14 open requests

6 weeks open


Support modelOrganization’s support model for managing applications:

Are sufficient application support resources there when you need them?

How well the support model meets business needs:

59%

15%

10%

10%

6%

Adequate and skilled (16%)

Skilled and moderately skilled (28%)

Moderate (31%)

Some (23%)

None (1%)

Internal IT supported

Outsourced managed services provider

Managed directly by business

Internal Shared Services models that supports multiple business functions

Mix of all of above

31%ModerateSupport

1 2 3 4 5

Not at all well Somewhat well Adequately Mostly well Very well

0

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35

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Outsourced providerServices (if any) provided by external/outsourced managed support service provider:


38%30%

25% 25% 28% 33% 32%

Major enhancements

Minor enhancements

Testing Release management

Incident management/break-fix

Help desk N/A or None


Managed support service provider handled the initial implementation of the SaaS solution:

Length of provider contract term:

Use automated testing tools:

Satisfaction level with managed support service provider:

53%Yes

47%No

One year (19%)

2-3 years (53%)

4-5 years (21%)

5+ years (7%)

53%2-3 years

No I don’t knowYes

28% 22%40% Only 28% of respondents leverage automated testing

tools. 40% stated that they definitely do not, and 22% were unsure. A wide variety of tools were reported, and no single vendor stood out.

1 2 3 4 5

Very Unsatisfied Satisfied Very SatisfiedSomewhat satisfied Mostly satisfied

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30

15

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Respondent organization by industry:

TMTBanking & Capital MarketsOther*Healthcare & Life Sciences

18%16%

14%12%

9%

6%5% 5%

4%3% 3% 3%

2%

RetailGovernment & Public Sector

InsuranceFood, Drink & CPGInvestment Management

Energy & Natural ResourcesBuilding, Construction & Real EstateHigher Ed., Research, & Not-for-ProfitPrivate Equity

Survey demographics

Respondent organization geographic footprint:

Respondent organization by size:

98%

32%26%

22%15%

North America

Europe Asia Pacific

Central/South America

Middle East/Africa

$50 billion or more

$20 billion to less than $50 billion




$500 million to less than $1 billion

Public sector, education, non-profit

6%

6%

7%

17%

38%

24%

1%

*40% of those responding “Other” indicated that their organizations are in the manufacturing industry.


Respondent SaaS involvement:

Respondent organization revenue & profit margin change, last 3 years:

Respondents by function or department:

Respondent position or role:

Information Technology (57%)Finance & Accounting (18%)Executive Management (11%)Human Resources (6%)Governance, Risk, Compliance (4%)Sourcing and Procurement (3%)Supply Chain /Demand Management (1%)

Director (30%)Manager (18%)Executive VP, Senior VP, VP (17%)Managing Director (12%)CIO (8%)CFO (6%)CEO (5%)Other CXO (3%)

SaaS Usage

SaaS Management

SaaS Implementation

SaaS Selection

Provide input/evaluations to help inform the decision One of several decision makers Sole decision maker

32% 32% 36%

32% 42%

35% 37%

26%

26% 47% 27%

28%

20%+ 11-20% 1-10% No change -1-10% -11-20% -20%+ Public sector, education, non-profit

Do not know

Revenue changeProfit margin

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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.

© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDP079283-2A

KPMG LLP, the audit, tax and advisory firm, is the U.S. member firm of KPMG International Cooperative (“KPMG International”). KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 147 countries and territories and have 219,000 people working in member firms around the world.

For additional information, please contact:

About KPMG LLP How KPMG can help

Contact us

kpmg.com/socialmedia

Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.

KPMG can help you unlock additional value from your current SaaS investment. There are a number of ways we can work with you, and some of them include:

• Assessing which new features should be adopted

• Developing a business case to implement new features

• Helping your IT organization transform and adopt Modern Delivery Practices read.kpmg.us/moderndelivery

• KPMG Powered Evolution – KPMG can provide ongoing support for your SaaS application. We can help you bridge the gap between cloud technology and your business on an ongoing basis read.kpmg.us/poweredevolution

Donald MailliardPrincipalGlobal Solution LeaderPowered EnterpriseKPMG LLP | DallasT: 214-840-2848 E: [email protected]

Olin WestManaging Director, AdvisoryKPMG LLPT: 214-532-0132 E: [email protected]

Thomas WildePrincipal, KPMG On Demand Services T: 301-452-4794E: [email protected]

mailto:tgwilde%40kpmg.com?subject=

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