All companies should have the power to switch vendors when contracts expire. They should be able to reevaluate their needs, shop around for different services, make decisions based on cost vs. value, plus more. But the cost of migration when it comes to software and software-as-a-service (SaaS) products can make moving from one vendor to another preemptively expensive.
How should companies respond to the hidden costs of software migration? By evaluating their reasons for migration against the value of migration. They should also take steps to lessen the cost of migration, giving them more flexibility to make decisions based on value rather than cost.
If you’re a CTO or IT team lead at a company that’s looking into migration and discovering all sorts of unexpected costs, you’re not alone. Here’s a closer look at the reasons for migration, the hidden costs of software migration, as well as tips for reducing the cost of migration to new software or a new SaaS vendor.
Why migrate in the first place?
There’s a somewhat limited universe of reasons why a company migrates from one software or SaaS provider to another. Here’s a look at 6 of the most common reasons why a company may choose to switch:
This is the No. 1 driver of migration. If your company can get the same performance at a better price from a different software vendor, it’s going to switch. A different vendor might also help reduce costs by lessening the maintenance burden, by providing a higher level of support and system administration, or by requiring a less substantial infrastructure for operation.
We live in a world where security is a priority for corporations. Many choose to migrate from one vendor to another to eliminate security vulnerabilities and flaws. In some cases, companies may migrate to align with new in-house security policies.
A new vendor sometimes allows your own platforms and systems to operate more efficiently and move more quickly, delivering an even better experience to your own users and customers.
As your company’s workflows and processes change, you may need different software vendors that offer solutions and services that better match the new workflows and processes.
You may need a feature that your existing vendor does not offer — or that your existing vendor only offers at a service level that is too expensive.
Your company may have introduced other software that requires compatibility. If your existing vendor does not offer compatible software, you’ll need to migrate to a vendor that does.
Your company may have a series of other reasons for migrating from one vendor to another. And each of those reasons is perfectly valid. For example, some companies might be moving from an on-premise solution to a cloud-based service. This is a justifiable decision and one that is completely unavoidable in most cases. Just make sure that you fully count the cost of migration before making an important software-related decision.
The hidden costs of migrating to new software
You never want to regret your decision to migrate from one software provider to another. But too often IT teams look back on the migration process and wish that they had realized just how costly it would be. What drives up the cost of migrating from one vendor to another? These 4 things:
Migrating from one vendor to another can take an enormous amount of time. Think about the process of migrating. First, you consider your various options. Second, you demo and test different software. Then you make a final decision, followed by planning for migration. And, finally, you conduct the actual migration from one vendor to another.
This can be a process that takes months rather than weeks. And, in some cases, the full process takes more than a year or longer.
Is this length of time acceptable? Remember that individuals on your team will be committing time day after day toward the migration project. That represents serious money spent on the employees needed to evaluate, plan and execute migration from one provider to another. In some cases, this cost may be perfectly expected and acceptable. Just make sure you full understand the time that will be needed to oversee an effective migration.
2. Internal resources
During the planning process, you will likely estimate the number of people who will need to be involved in migration from one vendor to another. In most cases, these estimates fall short of the number of people who will actually need to be involved in the process.
Migrating important software from one vendor to another can place a serious strain on your team’s capacity. When these capacity issues come to light, the timeline for a migration project typically gets lengthened out. This is how migrations that were planned to take weeks end up taking months — or longer. At the same time, your team is less able to handle and manage other aspects of their roles as they dedicate more and more time to migration.
Most companies end up either tolerating the strain on capacity, trudging through the project even as timelines stretch out and other work goes undone. Or they hire consultants to come in and help with the migration project, further adding to the amount of money dedicated to migration.
3. Training and adoption
Once the migration nears its completion, you have to focus on training internal users and driving adoption of the new software. Again, this can be time-consuming and generally challenging.
Trainings typically require multiple sessions and supporting materials that serve as documentation. Help desks are typically bombarded with questions and other inquiries during the adoption period. And you may even find that some of your team members are resistant to adoption of the new vendor’s software.
There’s always a risk of “shadow IT” within a company, which simply means that disparate departments and individuals find and choose software to meet their needs independent of any centralized process. During the training and adoption period, you’ll need to onboard your team members in such a way that eliminates the possibility of shadow IT. You’ll need to demonstrate the value of the new vendor’s software, the ease of use, as well as the support available for team members as they start using the software. Again, while all of this is worthwhile, it is also time-consuming.
4. Loss of productivity during transition
It may take time for your company’s users of any given software to master the new vendor’s software. During this time of transition, your company is likely to experience a loss of productivity. While this loss of productivity may be short-term, disappearing as your team members become more efficient with the software, it’s nevertheless real.
There’s little an IT team can do to mitigate this loss of productivity. You will no doubt make available training sessions and other resources, but there’s likely to be a period of time when your team members are less efficient with the new software than they were with the old. Hopefully, the long-term benefit of migrating outweighs this short-term loss of productivity — but that’s a question to be asked and answered as you consider migrating in the first place.
How to lessen those hidden costs
Looking for ways to lessen the hidden costs of migrating from one software vendor to another? While there’s no way to completely eliminate the costs associated with migration, you can consider the following 3 actions as ways to make the migration process faster and more streamlined than it would be otherwise:
Before you start a software migration, you need to test everything. Decide on a realistic scope for the project and come up with requirements. Outline how you will test migration, including milestones and overall strategy. And, finally, conduct a test that includes realistic resources. This is your chance to determine how much manpower will be required to successfully migrate from one vendor to another.
It’s too late for this in many cases, but you should start addressing migration support in your new SaaS contracts. How will you be able to download and save your information? What support does a vendor provide as you start the migration process? And this includes support both from the vendor you’re leaving as well as your new vendor. Leverage both sides of the migration to get as much support as possible, thereby lessening the demand on your in-house team.
Of course, the easiest way to reduce the impact of migration is to not migrate in the first place. Yes, sometimes migration from one vendor to another is unavoidable, especially if your existing vendor does not offer compatibility or a specific feature that you need. But don’t let negotiations over cost or service level force to take on a costly migration that could be avoided.
In many cases, companies miss the opportunity to negotiate a lower per-license free through their existing vendors. And they also miss opportunities to negotiate higher levels of service or access to needed features. Missing these opportunities can derail negotiations and push companies toward a migration that they would rather not undertake.
Sastrify helps you avoid unnecessary migrations
You need the credible threat of migrating to a different service if you want SaaS contract negotiations to go well. But you also need to be armed with reliable information and expert support if you want to get the best possible deal from your existing vendor — and not have to migrate at all.
At Sastrify, we deliver both to our customers — reliable information on different SaaS products and what you can expect to pay, plus expert support before, during and after negotiations. Because we have benchmarked pricing for a wide array of different SaaS products, we can help you understand where you are in negotiations and how much lower you can expect the vendor to be willing to go. This information is invaluable during the negotiation process, allowing you to negotiate a lower price and sometimes a higher service level — while skipping the hidden costs and challenges of migration altogether.
Getting started is easy. Get a free SaaS analysis to discover just how much you could be saving through your existing vendors — without incurring the hidden costs of migration.