SaaS implementation delays cost firms an average loss of Rs 5.6 crore

The cost overrun was highest for financial and accounting solutions. uch overruns in this sector cause delays in key processes like invoicing and payment processing and can even result in significant penalties and non-compliance risks, driving up costs.

Bengaluru: Three fourth (75%) of Indian enterprises that have adopted software as a solution (SaaS) since 2020 have encountered implementation delays, resulting in an average timeline overrun of 57% and cost overrun of 43% leading to an average loss of Rs 5.6 crore, according to a report by tech firm Zoho out on Wednesday. SaaS is a third-party provider that allows users to access applications over the internet. The report attributed the financial loss to missed business opportunities, in addition to impacting employee productivity, customer experience, and competitive positioning. 

“The ability to deploy SaaS solutions efficiently is no longer just an IT priority—it is a business necessity. Long deployment cycles escalate costs, slow down innovation, and reduce market responsiveness,”said Sharath Srinivasamurthy, Associate Vice President, IDC India. 

The report titled ‘IDC State of SaaS Adoption’ also stated that 92.5% of enterprises recognise that timely implementation is critical. Additionally, the study found that 67% of enterprises reported increased costs due to extended deployment timelines, making implementation overruns a direct financial burden. 

Over 53% of the respondents indicated that delays hindered digital transition processes, slowing down growth. Meanwhile, 48% of enterprises experienced customer dissatisfaction and 46% faced missed business revenue and opportunities, impacting overall business performance.

The cost overrun was highest for financial and accounting solutions (60%), the study indicated. Such overruns in this sector cause delays in key processes like invoicing and payment processing and can even result in significant penalties and non-compliance risks, driving up costs.

These delays were primarily due to a lack of dedicated resources, as companies assumed these solutions required minimal customisation, leading to misallocated implementation efforts.

The primary causes for implementation delays include project management inefficiencies, followed by unexpected integration or security challenges, talent shortage, and technical complexities in the new solution.