With many SaaS solutions offering a seemingly rapid answer to pressing issues, enterprises today find themselves with a rapid-growing application landscape that may prove difficult to manage. Eric Tan, CIO of business spend management vendor Coupa — itself a SaaS offering — believes it's important to take the long view into account alongside short-term tactical advantage when buying technology. He says:
Short term, the easy answer is, 'Move everything to the cloud.' I think there just needs to be a longer-term view, the principles of total cost of ownership being one of them to think about, as we see this migration to the cloud.
On total cost of ownership, he believes it's all too easy to focus just on the initial cost, without thinking through the longer-term implications of a purchase decision. He says:
At the board level, everyone is thinking about it with respect to just the acquisition cost. Many times people don't realize there's also the operating costs of these cloud-based, SaaS-based systems ... also the disposal costs. That is not fully thought through.
A key consideration is how an organization will manage the sprawling landscape of SaaS applications. The pendulum has swung away from the old order, when a core ERP system would bring everything together in a single command-and-control structure. Today, the enterprise stack has many more moving parts, but Tan believes there needs to be some organizing principle behind the scenes, and it's the CIO's responsibility to make sure that's in place. Tan's long view:
If I fast forward 10, maybe 15 years from now ... what would that enterprise stack look like? I can see an ERP existing but I can also see [perhaps] about 15 to 20 core applications, best-of-breed tools, to help run audit, cash, procure-to-pay, HR. But you're still going to need what we used to call a service oriented architecture that stitches everything together, this service layer. I think that's what we're starting to see the formation of, [with] these platforms.
Best-of-breed vs common platforms
It's a matter of getting the right balance between best-of-breed excellence and common platforms. For example, Coupa is a big user of Salesforce, not just for CRM. Tan explains its role in the company's IT landscape:
For us, staying on the Salesforce platform, as a long-term strategy, also meant selecting Salesforce as our support portal — Service Cloud versus Zendesk and Gainsight [when] we ran an evaluation. Being on the Salesforce platform also meant, for us, staying on Salesforce Community. And if you look at the evolution, it also influenced our decision on picking a BI solution across our employees, which was Tableau.
I think it's not going to be a mishmash of 50 different best-of-breeds and you're trying to stitch them together ... Salesforce will own a big component of our technology landscape, and then for specialty tools, say for commissions, Xactly is still a tool of choice, they've been really popular.
So I think it's going to be a combination of both. Like with anything, I think the answer's in the middle. I don't think you're going to have a system that rules them all. Neither do you want to be in a position of having 50 or 100 systems or platforms to deal with. Fast forward 10 years from now, you'll probably have a collection of 10 to 15 main systems that you need to manage across the enterprise.
For more established companies with a longer history represented in their IT landscape, the task of stitching different systems together is even more challenging. Coupa sees this in its own customer base, where connecting up the accounts payable processes of a large global enterprise may mean stitching together data and connections from a dozen different ERP instances, and taking into account the demands of different regions and lines of business. Here he sees value in modern process mining products such as Celonis. He says:
To be able to solve any problem today, you need unique insights on what's going on. And the problem we have today is there's just too much data, all over the place. What Celonis has done, in my view is, they've managed to create this agnostic platform — similar to what DataRobot has done for AI — that allows you to comb all the data to understand what's going on ...
I think it's going to be this very powerful capability that's going to help people troubleshoot or diagnose inefficiencies in their processes, by consuming and analysing large volumes of data.
More politician than scientist
Making progress on an enterprise-wide strategy built for the long-term requires a CIO to have diplomatic as well as technology skills. He observes:
Gone are the days where you can have this autocratic approach. 'I'm Mr CIO, I control the budget, I know every single technology out there, this is what you need to use.' I think today, compared to 20 years ago ... the best technologies that we've brought in, a lot of them have come from the business, They know their domain and you have to listen ... if it's a one-sided conversation, it's not going to work.
But I think it's also balanced. Being in the CIO role, the one thing that hasn't changed is you see everything across the different business units. So just being that ambassador, if you will, of technology, to make sure that we're investing in the right places at the right time, continues to be an important thing.
At least conversations with line of business leaders have become more frequent in the wake of the pandemic, which has made it important to keep lines of communication open. Tan says he spends much more time now with Coupa's Chief Customer Officer and Chief Marketing Officer, talking not about technology but about the business. He adds:
Any successful IT organization, CIO, IT leader today, cannot be successful without strong partnerships with the respective business units. Take HR, for example ... That relationship with the Chief HR or Chief People Officer has transformed so much over the past 12 months. What used to be an annual, 'Hey, Ray, nice to meet you,' it's almost every two weeks now I'm talking to Ray on how we're going to improve the employee experience. How are we going to get back into the office leveraging technology? How are we going to meet the demands for recruiting using technology, the pipeline we need to generate?
So it's very interesting, that evolution. I feel more of a politician than a scientist.
A useful insight into the evolving role of the CIO and the importance of establishing a long-term strategy for evolving the IT landscape and enterprise architecture to adapt to changing needs.