Nowadays, in the 21st century (yes, how well-worn it is, isn’t it? As if that justifies that we all have to be crazy with toothbrushes that work with Wifi and tell us things like… “you have a piece of chicken on your upper left lateral incisor”)… Well, in the 21st century we have already seen the world collapse and be re-inaugurated several times. We have already suffered some ultra-catastrophic macro-nuclear hecatombic crises and here we are. We have already experienced everything, or almost everything, including pandemics, wars, wallet-busting inflation, crises from climate to toilet paper, etc., etc., etc.
And now, after years of cybernetic, digital, electro-cultural change and, above all, of our human habits (I have seen people who get into the shower with their smart-phone, which indicates that their phone is clearly smarter than them), we have everything within reach of a click.
When I was a kid (1990s), if I wanted information, I would take my walk-man (I was already very technological), I would get on the bus and go to the library, to read without making noise. But this is not about how to educate our children in the art of discerning information and getting their hands a little dirty. That’s another chapter.
What is Digital Transformation? Well, basically, digitalise activities to transform our company into a more productive and profitable entity.
We see it in people who go running, because they have applications that measure their pace and kilometres, the times they go out, the calories they burn, and they get statistics to measure their progress and even snack on friends, or themselves.
We also see it in business; Rare is the company today that does not manage at least one software.
However, as in pretty much every area, all that glitters is not gold. I know of cases of companies that have paid half a million euros a year (150 licenses) for systems that are no more than decent, being generous, and excessively complex, in many cases. I know the scenario of a SaaS company that provides services to huge insurance multinationals, and who only have daily incidents with their software; Basically, its employees spend their lives identifying and solving problems. Once they were on the verge of losing their entire database (hundreds of millions of customers). They saved it by a miracle, but the software, speaking clearly, is a problem, not a solution.
When they sell us digital products, they ALWAYS talk about SOLUTIONS. It is the sales argument, even if the client they are addressing does not know what they really have to solve. However, before identifying what needs to be fixed, I believe that there are THREE much more basic factors to be able to IDENTIFY a quality service: STABILITY, SIMPLICITY and VALIDATION.
Software HAS TO BE STABLE and SIMPLE. That is, it does not present errors. Let it not close on its own, let things not disappear, let it not do strange actions. And, on the other hand, it must be extremely easy to use and understand. How can we check if a software is stable and simple? By USING IT. The customer is within their rights and MUST try the software before paying the full amount for it. Only then can you discover;
1. If it is easy and intuitive to use and, as a consequence, quick to implement
2. If it is stable
3. What do you really need it for?
4. If you really want it and are willing to pay for it.
But a rented software as a service should not be excessively expensive. Half a million euros a year (there are much more expensive ones) is an outrage. Of course, it all depends on the number of licenses, but there are those who charge 45,000 euros for a license, which is a considerable blow. (It can be good, already).
If the client really goes through 1., 2., 3. and 4. and comes to the issue of prices, there are other things to consider:
a. How many licenses do I need versus how many licenses can I afford? Which leads to:
b. Negotiation process.
In Europe, an SME should not pay more than 3 to 8 thousand euros per month for about 50 licenses. The licenses are the users, those who use the system, including supervisors. Charging more than that is laughing at people.
But the greater the number of licenses, the lower the price per license should be. If I have 249 users and pay 10 thousand a month, I am not doing a bad business as long as the service meets what I expect. The price per user drops, but the number of licenses increases. It’s fair.
If I manage a large line, for example 3,000 workers, I must sit down to negotiate, and the company that offers the software must be willing to lower the price per license to around 15-20 euros per month each. (IT’S A BIG CUSTOMER!)
All this is considering 3 fundamental aspects:
1. The market and size of the company that offers SaaS
2. The service (which MUST meet or exceed customer expectations)
3. Customer purchasing power.
And the last key factor to consider is what many overlook, and it is critical. It is software VALIDATION.
In an implementation process, the logical thing to do is:
1. UNDERSTAND the nature of the company’s business and what part of its operations may require a DIGITAL SOLUTION.
2. DEFINE the project to be executed; what aspects to implement to reach that solution.
3. DEVISE the strategy and decide exactly what, when and how to implement it.
4. EXECUTE the implementation.
5. VALIDATE the execution of the whole process.
The last step is the most important because it is the one that proves that everything has been done right, starting with understanding exactly what the company needs. Without these steps in that order, the company is throwing its money away and the software vendor is taking advantage of ignorance about the whole Digital Transformation issue.
It’s as simple as that.
