SaaS delays causing time, cost overruns for Indian firms: IDC-Zoho survey

A substantial chunk, nearly 75 per cent of Indian enterprises that adopted Software as a Service (SaaS) solutions since 2020 have experienced implementation delays, leading to average timeline overrun of 57 per cent and a cost overrun of 43 per cent, according to a latest survey that tabulated the business impact of such prolonged deployment cycles.

The study titled, "IDC State of SaaS Adoption in India Survey 2024", commissioned by technology company Zoho, found that these setbacks have led to an average loss of Rs 5.6 crore in missed business opportunities, besides impacting employee productivity, customer experience, and competitive positioning.

As businesses continue investing in SaaS solutions to drive digital transformation, modernise operations, and enhance agility, the speed of implementation has become critical, the survey said, noting that implementation delays remain a significant barrier, preventing businesses from realising the full value of their digital investments.

"Long deployment cycles escalate costs, slow down innovation, and reduce market responsiveness. Enterprises need a strategic approach'?one that integrates automation, contextual intelligence, and development tools'?to accelerate implementation and unlock SaaS value faster," Sharath Srinivasamurthy, Associate Vice President, IDC India said.

The ability to deploy SaaS solutions efficiently is no longer just an IT priority, it is, in fact, now a business necessity, Srinivasamurthy added.

Commenting on the big takeaways from the survey, Mani Vembu, CEO of Zoho said that the company recognises that enterprises need technology that delivers immediate impact without prolonged deployment cycles.

"Our platform-first approach eliminates common implementation bottlenecks by offering deeply integrated applications, 'low-code' extensibility, and AI-powered automation. This enables businesses to deploy solutions and go live faster, reduce implementation risks, and accelerate their digital transformation efforts," Vembu added.

Delayed SaaS implementations create cascading effects, impacting both ongoing and future digital transformation initiatives.

As per the study, 92.5 per cent of Indian enterprises recognise that timely implementation is critical, while the remaining consider it "somewhat important".

The study found that 67 per cent of enterprises reported increased costs due to extended deployment timelines, making implementation overruns a direct financial burden. About 53 per cent of the respondents indicated that delays hindered digital transformation progress, slowing down innovation and business growth.

Also, 48 per cent of enterprises experienced customer dissatisfaction, while 46 per cent faced missed business revenue and opportunities, impacting overall business performance.

The cost overrun was highest for financial and accounting (F&A) solutions (60 per cent), as per the study. F&A solutions were adopted by 66 per cent of the respondents. Overruns in F&A can cause delays in key processes like invoicing and payment processing and can result in significant penalties and non-compliance risks, driving up costs, the study cautioned.

It is pertinent to mention here that IDC State of SaaS Adoption in India Survey 2024 surveyed 240 enterprises in India (with over 1,000 employees) from across healthcare, retail, manufacturing and financial services industries that had implemented SaaS solutions after 2020.

To mitigate challenges, enterprises are shifting toward a platform-driven approach to SaaS implementation, given that the model enables faster deployments by leveraging automation, reducing customisation efforts, and ensuring seamless interoperability.

An IDC study said that 59 per cent of enterprises recognise automation and DevOps practices as key factors in shortening deployment timelines. By leveraging advanced automation, organisations can minimise manual dependencies, reduce errors, and improve implementation speed.

Vembu emphasised that businesses cannot afford to be slowed down by complex and fragmented implementations.

"Zoho's platform architecture ensures enterprises have the flexibility to implement solutions at scale with speed and minimal disruption. By offering pre-configured industry workflows, AI-driven analytics, and seamless interoperability, we enable organisations to accelerate their SaaS deployments'?whether launching, extending, or scaling'?while minimising costs and maximising business impact," he added.