When is it time to choose SaaS over legacy?

Transitioning from a legacy system to Software-as-a-Service (SaaS) is like migrating passengers from a Boeing plane to an Airbus while the plane is still en route — organisations need to keep everyday operations running even as they level up their services and embrace leading-edge technology.

This was an analogy that the President of SAP Enterprise Cloud Services and SAP Sovereign Cloud Services, SAP, Peter Pluim, shared in a panel session titled, Transitioning from Legacy IT Systems to SaaS on July 9, as part of GovInsider Live SaaS Day. The event sought to explore the emerging role of SaaS applications within the Singapore public sector.

During the panel session, Pluim discussed with VITAL’s Director of Service Partnership and Innovation, Alex Tang, and Synapxe’s Director, Enterprise Architect, Heng Cheng Kwang, the considerations that organisations should bear in mind when transitioning from legacy systems towards SaaS tools.

When is it time to refresh legacy systems?

The panellists spoke about how organisations can identify which systems have become legacy and when to consider alternatives. These could include rearchitecting systems, rebuilding them from the ground up, or investing in SaaS solutions.

Tang shared that even though legacy systems may have a negative connotation, many such systems initially provided strong value for business needs.

“These systems have served us well but may not be able to take us forward into the next stage and must be revamped,” he said.

“Systems start becoming legacy when the escalating costs exceed the value that the systems bring,” he added. Tang shared that organisations tend to begin modernising when legacy systems reach the end of their shelf life and the cost of maintaining these systems becomes too high.

Similarly, Heng said that legacy systems may not necessarily be outdated. However, newer systems could offer more benefits and efficiencies to organisations seeking to address newer challenges.

He pointed to the Singapore government’s shift from hosting IT systems on-premises to moving systems to the Government on Commercial Cloud (GCC) as one such example.

While on-premises systems can deliver the goal of keeping data secure, the GCC enables the government to maintain data security while accessing newer technologies and benefits, he noted.

Taking the first step

When kickstarting a modernisation journey, the buy-in of senior management is critical, shared Heng.

“It’s not just about the operations people, the business users… The support of the senior management is very important,” he said. He credited Synapxe’s senior leadership for encouraging the national healthtech organisation to embrace the commercial cloud.

Their shift towards SaaS tools was also driven by the increasing need to collaborate with external partners, including the private sector and other healthcare organisations, he noted.

Organisations must consider the security requirements when modernising. Many legacy systems may struggle to comply with modern requirements, noted Tang. This is when it is time to consider new capabilities, be it via adopting SaaS or non-SaaS approaches.

Many organisations choose to modernise to address increasing demand for better services from end-users, shared Pluim.

A robust change management strategy is vital for ensuring the success of a transformation journey, Pluim added.

He explained that only 10 per cent of the challenges would be technological – 90 per cent of an organisation’s efforts would have to go towards bringing stakeholders, such as end-users and staff, onboard. For large organisations, a hybrid approach that combines SaaS and other approaches may be the way to go, he said.

Sustaining internal capacities while building partnerships

Several audience questions raised concerns that an increase in the use of SaaS tools could reduce internal digital capabilities and increase dependence on external providers.

To that, the panellists shared that organisations should carefully consider which services should continue to be developed and maintained in-house and which services could be acquired via SaaS.

For example, organisations could procure common services such as human resources (HR) and internal communication tools via SaaS, rather than tasking in-house developers with rebuilding common services from scratch, noted Pluim.

This frees up time for developers to work on more complex applications unique to organisational needs, he said.

VITAL’s Tang also shared that the choice between SaaS and in-house development does not need to be binary. VITAL previously acquired and rolled out a whole-of-government SaaS-based automation platform that government agencies can use to develop solutions and automate their own processes, he pointed out.

Pluim added that building public-private partnerships is critical in driving digital transformation and facilitating knowledge sharing, even as organisations invest in internal digital capacities.

Ensuring the longevity of SaaS tools

When it comes to ensuring the long-term success of SaaS adoption, the panellists cautioned against overly customising SaaS tools, even as some customisations may be necessary to meeting organisational needs.

Rather, they suggested that it is important to use such services in their original state where it makes sense. Too many customisations can lead to SaaS tools accruing technical debt over time, making it difficult for future users to on board.

As a result, SaaS tools could become legacy systems in their own way.

To learn more about SAP’s software-as-a-service offerings for public sector organisations, you may reach out to SAP Asia.