In this Digital Insights Leadership Series video, Mike Vizard talks to Freshworks CIO Prasad Ramakrishnan about the impact bloatware is having on digital business processes.
Mike Vizard: Hey, folks. Welcome to the latest episode of the Digital CxO Leadership Insight series video. I’m your host Mike Vizard. Today we’re with Prasad Ramakrishnan, who’s CIO for Freshworks, and we’re gonna be talking about what is the definition of a modern SaaS application. Hey, Prasad, welcome to the show.
Prasad Ramakrishnan: Thanks, Mike. Hello, everyone. Wonderful being on the show with you, Mike.
Mike Vizard: We have been at this SaaS thing for quite a while now, and it seems like we just assume that all of these platforms are roughly similar, but the truth of the matter is somewhat different. It feels like, just like any kind of legacy application environment, there are multiple generations of platforms, and perhaps they’re not quite as similar as we all would believe, and maybe some are easier to use and some are simpler to engage than others, simply because they were built at a different time in a different era. So what exactly is going on with the modernization of SaaS apps, these days?
Prasad Ramakrishnan: Yeah, Mike, a great point, right, if you think about the origin of SaaS apps, it was around the turn of the millennium that SaaS apps started becoming kind of something that customers could buy. Prior to that, we had packaged applications, which were things that you would install in your datacenter, extremely complex applications, right? I’m talking about the SAPs, the bonds, those type of applications. And then came the early-2000s when SAS applications became the choice for more and more CIOs, where they wanted to move away from the whole capital model to more an expense base model, right? So that’s the first generation of SAS applications.
Now, over time, what’s happened is some of these SaaS applications have become extremely complex, where all the bad habits that we wanted to leave behind with these packaged applications have all started finding its way to these SaaS applications. They have started becoming more complex, and with an Oracle shop, you would require an army of consultants and a huge employee base to maintain your storage stack, your database stack, and your application stack. And I think with some of these legacy _____, you are needing some of those, right? So that’s what I refer to as legacy SaaS, Mike.
Mike Vizard: And some of these stacks are being consolidated a little bit underneath, like, for instance, you guys have, there’s a CRM, there’s an ITSM platform, and there’s a customer service module, that all share the base kernel ’cause they’re accessing the same data. So, at the same time, though, we have this proliferation of SaaS applications across the enterprise, and they each have their own little APIs and we’re trying to stitch together workflows. So, how do you think that that’s gonna shift between more of a vertical stack, in your case, or a horizontal stack, and when do I figure out when they use a more integrated stack versus relying on things that I’m trying to loosely couple through APIs, if that makes sense in terms of our workflow?
Prasad Ramakrishnan: Well, great question, Mike. If you look at the end of the day, why a company would even invest in a CRM software or in a service desk software or in ITSM software. It’s because they have a problem, and especially in this day and age, it’s very hard to get customers. And you wanna make sure you retain and engage in an easy way with the customers that you already have, right? And the person who within your enterprise is engaged with these customers, whether you take an employee persona where it’s your ITSM tool where the customer that a lot of my employees, right? I wanna make the employees of Freshworks as productive as possible.
My sales rep wants to engage with the customers that they’re engaging with, and make their engagement as simple and complete as possible. Behind all of this, at the end of the day, is the data that comes together, right? So, if you look at what has happened with the legacy SAS, they have made it where you are now, in short, buying a package point solution to handle these various use cases. It has become, now, you get this whole big monolith where you have to get the entire package, the whole enchilada, right? Rather than now saying, “You know what, behind the scenes data model.” And if you look at our products, our Freshdesk product, our customer support product and our CRM product, which is our sales and marketing product, they had a lot of commonality in terms of customers.
But customers can start marketing product, and then expand into the customer support, depending on what they want to do. But they will share between themselves, because it’s all the same underlying data model, right? Where the data exchange of customers and what cases and what opportunities you have, depending on whether you are on the same side or the customer support side. So you can build it without making it such a huge behemoth, from an end user perspective, if that makes sense.
Mike Vizard: And it’s an interesting point, ’cause I’m not sure that people appreciate the value proposition of the data model underneath a particular stack. Because, you know, you’ve seen each SaaS vendor come along, they have their own data model, and then they go acquire something and try to stitch it together, and then they’re stitching it together through their API, it’s because it’s really hard to reengineer that thing back to the original data model. So, do you think the end customer has an appreciation for the data model and what the implications really mean for that?
Prasad Ramakrishnan: Totally they do, because think about it, the cost to maintain all these integrations, the cost to configure all these integrations, the cost, from a business cost perspective, if you really don’t have a complete view of your customer, if you really don’t have a complete view of the customer support relationship, or the customer success relationship that you are trying to have with the customer, you are going to go with half-baked information. Which means, imagine coming and talking to me and saying, “Hey, Prasad, our team is hitting it out of the ballpark,” and my team is telling me, “We have 17 high-priority cases with them.” It is basically they’re coming in completely blind to what this relationship totally is. So I think the interplay between these various components need to all work together, so that from a – you never want to put your sales rep or your customer support rep in a compromising position.
You never want to leave them in a very vulnerable situation with the end customer that they’re dealing with. And I think that’s where making sure that we make it easy for the rep to find out what information they need, before they come and talk to the customer, that interaction that is much more effective, right? And I think this is what has been forgotten over time. To your point about when you stitch multiple things together, it is a stitching that is done and it’s more patchwork rather than thinking about it from the ground up.
Mike Vizard: We have seen the emergence of low-code and no-code tools, and people are building workflows that span multiple SAS applications, you can argue that a SaaS app is really an extension or a flavor or what we used to call a PaaS and they’re kind of one and the same. Do people, are they able to effectively build applications that span multiple SAS platforms? Or do they do better when they’re just extending this simple integrated data model, and that should be a part of their thought process?
Prasad Ramakrishnan: Yeah, see, I think one of the key value propositions that every SaaS app needs to solve for, right, because again, going back to the point we talked about where you used to have all of the functionality in one big monolithic Oracle app suite, or the SAP suite, gone are those days. Now we are buying a point solution or handling a particular problem. Every single SaaS app needs to have two things for it to be effective. One, it needs to have the way you model your business function, the way you model your business process within that. That’s where the no-code alternatives to workflows and figuring out how and when you interact with the customer. So the reason why no-code has become very important there is, with the legacy SAS, you would need an army of consultants to actually build those, build those workflows, where you actually take their underlying APIs and then build custom workflows on top of that.
But coming up with a no-code option actually allows the IT practice to actually tune the tool so that it now handles what the end customer is looking for. So no-code plays a role, there. Second, most SaaS applications are going to stay there as an island, right, because it needs to be, it is dependent on other applications, right? You wanna make sure that there is a rich portfolio of out-of-the-box integrations, between the SaaS app and let’s say, for example, you are trying to now do data enrichment, you wanna now have APIs get that. If you wanna now do a caller interface, you want to do a chat interface. Because the whole conversation, the whole world has moved to UI, right? So, making sure that it has those rich integrations to those platforms, so that now, from an end user perspective, the way they engage the customer is through a seamless transition between these various ways by which they come in to the score application, right?
And that’s where modern SaaS applications need to have that, modern SaaS applications tend to have them. That’s one of the things, as Freshworks, we focus on that, right, to make sure that with our chat product, for example, or our caller product, the interface and the experience from an end user perspective is pretty seamless, right? As a conversation, they can now initiate the chat conversation, the caller conversation. They are actually spanning between various applications, but it is all seamless, as far as the end customer is concerned.
Mike Vizard: Are we seeing the emergence of SaaS ops teams who are dedicated to managing these SaaS applications? And is it becoming something of a specialty in the land of IT support, or is this just where we’re all headed anyway?
Prasad Ramakrishnan: Yeah, so, well, one of the most important things every CIO needs to do is to make sure they have a good operation strategy, right? And this gets back to tools rationalization, it gets back to, now, reevaluating what tools you have, and then getting the maximum return on the investment on the tools that we have already bought. Now, so recently, I’m sure you would have read the report that our marketing team published, right? This basically talks about how, because the software has become – bloated, you end up sometimes buying more than what you need, right? And unless there is an IT practitioner, you look at, “Hey, what have you bought? How much of those functions are really being used? Do we really need this many users on this?”
Right, am I really adopting all of those features? Maybe I’m paying $100.00, whereas, I’m only getting $40.00 worth of value out of this investment, which means $60.00 I’m actually making the software vendor richer here in the process, right? So you want to buy the right software, and also, to your aspect about SAS ops, unless I have a team focusing on adoption, unless I have a team focusing on making sure that it has been configured to make it easy for the users to use, I’m not going to get value from that investment, right? Because bloated software has three problems. Problem number one, you are buying more than what you need. Two, I need, now, an army of people to configure and uncheck the options here of features that I don’t need, because I am only looking for 40 percent of the functionality.
And three, from an end user perspective, imagine going to an application where what can be done with a simple one-click interface, you now have to navigate through five different screens or five different operations, before an operation can be completed. So it manifests itself as complexity in all three fronts, and that by itself is a bad thing from an end user perspective. So, SaaS Ops, making sure you have people looking at this on a regular basis, and diligently looking at utilization, looking at what are we buying, is super critical, Mike.
Mike Vizard: Do you think that these issues are at the core of what’s tripping people up as they try to launch these digital business transformation initiatives? As, you know, they have a workflow in mind, but by the time they start stitching it all together across all these different SaaS apps, and then figuring out how to manage that, it’s not long before they get hung up. And then all these projects seem to get started, but they never get completed. So, is that maybe the reason we need to take a giant step back and rethink this thing?
Prasad Ramakrishnan: Yeah, yeah. And I think part of it is also tool vendors who have taken what I call as a checkbox approach to approaching solutions, right? Because almost every big enterprise now, or most companies now, issue an RFP where you have a bunch of vendors responding to the RFP. And in order to make sure that your name figures in the top two or top three or top four, from an RFP shortlist perspective, they try to check off every possible feature, making it an extremely complex, this one. So you are right, I think it’s almost, we need to do a reset and make sure that we are going back to basics, figuring out what is the persona that you are trying to solve the problem for, build the SaaS tools and – and maybe I’m overemphasizing this, Mike, but that’s one of the things that Freshworks was founded on, right?
We did not want to make it complex for our users to use our product. We wanted to make it, if you take our Freshservice product, I used to be a customer of Freshworks before I came here to Freshworks. I deployed it at two different companies before coming here. And what I loved about the platform is that in my previous company, it’s not an ITSM tool. And we used to have an army of engineers rebuilding the tool to make it into an ITSM tool, because the company was founded with _____ platform, right? So, and coming in, I said, “Guys, I am not even able to get, as an IT practitioner, the basic visibility into what changes are happening within my environment, and if I have to make any change, I have to bring a developer to make a change.”
That’s not something the CIOs like to do nowadays, because SAS platforms need to be easy for you to just configure. But drag-and-drop workflow with this modification, move on, move on to the next thing. Because we are not in the business of building software, we are in the business of configuring software, right? So I think that hit reset needs to happen, Mike, where we start pivoting and making sure we have software that’s easy from a practitioner perspective and an end user perspective.
Mike Vizard: Do you think, therefore, that bloatware is essentially a hidden tax on digital business transformation, because people don’t realize the overhead that gets generated, and then they wind up supporting these things and it’s roughly, it’s a different kind of technical debt?
Prasad Ramakrishnan: Totally, totally, and not only that, there is also a hidden cost here in terms of employer and employee satisfaction. There was a survey conducted some time back where they looked at what people look for when they come into a new company. Think about it, when a person leaves Company A and comes to Company B, they are saying, “Okay, I’m done with what I’ve tried to do in my old company. I’m looking for new energy. I’m looking for something new to do,” right? People leave for different reasons, but it’s because they actually want to reach their self-actualization in the new place. They come in there and if they find that the technology that that company is using is legacy technology, right, technology from the 2000s, right, and if it is not making their life easy in terms of the way they need to go and do what they need to do, they’re feeling like, “Did I make progress in my life? Did I make progress or have I gone back to a dinosaur company here?” Right?
Because people want to work in places where they feel like they are appreciated, and the way companies need to show their appreciation is by giving them technology that makes it easy for them to do that job, right? And so, this is where there is that other hidden cost, like you talked about, those two or three costs, but there is also an employee cost. People leave companies because they feel like the company that they are working for doesn’t care about the technology that they are using, and then they’re saying, “You know what, this company really is a dinosaur company. I don’t want to work for this, and I want to work for a company which is _____,” right? Because this frustration is real, Mike, and it causes burnout, it causes frustration, it causes angst in terms of the employee.
Mike Vizard: We had this when we had packaged applications, but it’s now clear to me that SaaS applications have really moved the ball forward. But frankly, we just made people kind of bend to the software versus forcing the software to bend to the way that people wanna go. So, are we reaching a point, now, where maybe the software, because it’s a little more modern, is more flexible?
Prasad Ramakrishnan: Yeah, so from an end user perspective, forcing a user to do a particular – and this used to be prevalent in the SAP model, right? SAP had done its best possible thing as it relates to AP process or AR process or cash management process, and companies would say, “I’m deploying SAP and I’m gonna follow the SAP process.” Something similar to that has happened with the Salesforce platform, right, where now Salesforce has become a rigid platform where it has a particular way by which sales happens. But think about it, modern companies and modern businesses, they are looking at sales in a completely different way. Gone are the days when e-mail used to be the way people used to communicate, right? Remember those good old days when we used to call for support and then you would talk to an IBR for support, right? And then it became e-mail.
But now, everything is conversational, which means the interaction between you and your end customer has also changed, where the way you look at solutions has also got to kind of morph to that, right? So that you are now handling what the customer is looking for. So, absolutely, I agree with you there, Mike.
Mike Vizard: All right, you heard it here, folks, freedom still matters. Hey, Prasad, thanks for being on the show.
Prasad Ramakrishnan: I totally enjoyed this conversation, Mike. Take care, then.
Mike Vizard: All right, and thank you all for watching this latest episode. You can find it and others on the Digital CxO website. We invite you to check them all out. And once again, good luck in your digital business transformation and ventures. Thanks for watching.
Prasad Ramakrishnan: Thank you, Mike. Bye-bye.