Embracing SaaS: Strategies of Winning Organizations

© 2013 IBM Corporation

Embracing SaaS:Strategies of WinningOrganizationsArmen Najarian, IBMSusanne Hupfer, IBM

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Please note

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Today’s Speakers

Armen NajarianProgram Director, SaaSMarketing GTM

Armen NajarianProgram DirectorWW SaaS Category Marketing

[email protected]

@ArmenNajarian


Susanne HupferClient Insights ConsultantIBM Center for Applied Insights

[email protected]

@cybersooz

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Cloud computing is a force for business growth;Software as a Service (SaaS) is a fast-growingsegment within cloud

Leading organizations are using cloud to gain competitive advantage

SaaS is a key growth segmentwithin cloud**:

The Worldwide SaaS market isforecasted to grow at a CAGR of 20.2%in 2012-2017, growing from US$18.2billion in 2012 to US$45.6 billion in2017

Compared to peers,these leaders are*:

79% more likely to rely on cloud to locateand leverage expertise anywhere in theecosystem

136% more likely to use cloud to reinventcustomer relationships

170% more likely to use cloud-basedanalytics extensively to derive insights

Source: IBM Center for Applied Insights Champions of Software as a Service:How SaaS is helping companies secure powerful competitive advantageFor more info, visit: ibm.com/ibmcai/saas

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To gain a deeper understanding of how organizationsapproach SaaS, we surveyed 879 IT and line ofbusiness (LOB) decision makers

10%

36%42%

12%

Respondent distribution(Organizations that currently deploy SaaS, spanning six countries* and 23 industries)

C-level IT

Geography

43%

57%

Maturemarkets

GrowthmarketsLOB VPs,

Directors,Managers**

Role

C-levelLOB**

40%

40%

20%

Organization size(# of employees)

10,000+

2,500 – 9,999

<2,500

IT VPs,Directors,Managers

Growth markets surveyed: Brazil,China, India, South Africa

Mature markets surveyed: UK, USA

*To smooth possible geographic distortions, responses were weighted based onan IBM assessment of each country’s total IT spend.**LOB functions surveyed: Marketing, Procurement, Supply Chain,Sales/Commerce, Finance, Customer Service, Human Resources and Legal


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What is the #1 motivator driving SaaS adoption?


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Reducing costs is the #1 motivator driving SaaSadoption, and many achieve it

Reduce TCO (vs. on-premise)

41%SaaS was shown to reduce totalcost of ownership (TCO) ofapplications


But what do enterprises accomplish with SaaS, evenmore than reducing TCO?

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Even more enterprises are gaining competitiveadvantage through SaaS

Almost half of enterprises arealso gaining competitiveadvantage through SaaS

Gain competitive advantage

47%


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To learn from the leading organizations, wesegmented enterprises by level of SaaS adoptionand competitive advantage

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Pacesetters (19% of the total) have thehighest level of SaaS adoption and are gainingcompetitive advantage through these broadefforts

Challengers (41%) have adopted SaaS morenarrowly, but are gaining competitiveadvantage through their existing SaaSdeployments

Chasers (40%) are slower to adopt SaaS andgain competitive advantage through it

Pacesetters19%

* Based on # of application areas deployed as SaaS


*

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Pacesetters are motivated by higher-order values thatdrive competitive advantage and market agility

Pacesetters (19%)Chasers (40% ) Challengers (41%)

CollaborationCustomer experienceTime to market

Reduced TCOApplication agilityCollaboration

How are Pacesetters gaining their competitive edge?

Top threemotivators

Segment

Reduced TCOApplication agilityDecision making


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Dispelling a myth, leadership isn’t achieved by LOBcircumventing IT. Pacesetters show the strongestlevel of IT + LOB collaboration.

Pacesetters surpass ChasersThe power of collaboration

SaaS strengthens the IT and LOB relationship

Strong IT and LOBcollaboration on SaaSselection and deployment

Strong IT and LOBcollaboration aroundSaaS security

+79%70%

39%

71%

36%

35%

24%

+97%+46%

Pacesetters Chasers


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In fact, Pacesetter IT and LOB tend to regard eachother as strategic partners on SaaS – one of twoessentials for achieving competitive advantage

+227%

+113%

72%

22%

37%

Pacesetters surpass Chasers

Fostering strategic partnerships

IT respondents view LOB as a strategic partner for SaaS

LOB respondents view IT as a strategic partner for SaaS

Pacesetters Challengers

66%

31%

54%

Chasers


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Pacesetters also align their organizations around acohesive enterprise-wide SaaS strategy – the otherkey to competitive advantage

Strategic approach to SaaS

Has a mature and cohesive enterprise-wide SaaS strategy

SaaS is a critical piece of enterprise cloud strategy

SaaS provider is a strategic partner/advisor

+129%

+207%

+300%

46%

18%

56%

31%

12%

28%

48%

Chasers Challengers Pacesetters % Pacesetterssurpass Chasers

71%

86%


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This approach enables Pacesetters to go beyondenterprise efficiency – achieving deeper collaboration,better decision-making, and market agility


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Pacesetters are experts at using SaaS to increaseself-service capability, optimize operations andimprove application agility

Enterprise efficiency

Increased self-service capability for applications

Optimized business processes and workflows

Improved application agility (flexibly deploy andimplement solutions)

+185%

+136%

+126%

36%

41%

41%

26%

31%

28%

70%

66%


74%

(% using SaaS to achieve to significant degree)


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Pacesetters also use SaaS to increase collaborationand improve core business relationships across theirorganizations and ecosystemsReal world example:SafeGuard WorldInternational

This top provider of managed payroll and employment outsourcing needed tosupport an aggressive global expansion strategy.

It used a SaaS-based collaboration, knowledge-sharing and social projectmanagement solution that enables its worldwide teams to respond morequickly and effectively to fast-breaking issues and opportunities.

Result: 20% reduction in implementation time

Deeper collaboration

Increased collaboration across organization and ecosystem

Improved core business relationships

+79%

+154%

37%

44%

34%

28% 71%


61%



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SaaS enables Pacesetters to convert big data intonew insights and improve decision making

Real world example:PAC2000A

An Italian retail giant needed to overhaul its manual price management system in order tokeep up with the competition.

It implemented a SaaS-based price optimization solution, which offered frequent analytics oncost and competitive data. This changed PAC2000A from an organization that based pricingdecisions on “gut feel” to one that leverages analytics to make more informed decisions andpredictive forecasts.

Result: 2.4% increase in comparable store sales

Better decision making

Leveraged analytics across organization to turn big datainto insights +112%50%34% 72%


Achieved better decision making +157%41%28% 72%



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Finally, Pacesetters employ SaaS to unlock marketagility and become more responsive to market andcustomer needs

Market agility

Increased innovation

Reduced time to market

Improved customer experience

+126%

+127%

+137%

40%

42%

47%

71%

68%

Chasers Pacesetters % Pacesetterssurpass Chasers

66%


Changed organization’s business model+137%44% 71%

Real world example:Virgin Atlantic

A major carrier – with more than 9,000 employees, 41 aircrafts and carrying5 million passengers/year – wanted to redesign its website to be more user-friendly.

It used a SaaS analytics solution to aggregate historical and current site usagedata to understand customer use and decision making, as well as gain insightsto transform the website. The airline has gradually released new pages andcontinued to refine the site based on customer data.

Result: 10% increase in flight bookings, 7% increase in average booking value

29%

30%

30%

Chasers

30%


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Want to hone your own competitive edge throughSaaS?

Set ambitious objectivesConsider the full range of benefits that SaaS could help you attain.

• Where can you speed applicationdeployment and implementation?

• Which business processes couldbe better optimized?

• How could broader, smoother andmore frequent collaboration insideand outside your organizationimprove results?

• Which teams could do a better jobby leveraging big data to informdecision making?

Take a more strategic and collaborative approachIncorporate your SaaS initiatives within anenterprise-wide cloud strategy.

• What elements would round outyour current SaaS strategy?

• How could you better integrateSaaS strategy into a broadercloud strategy?

• Are you exerting just the rightamount of control over SaaSdeployment?

• What changes are needed tokeep your governance structurescurrent?

Broaden your collaborativebase Multiply your chances ofsuccess by encouraging closeIT and LOB collaboration.

• Are you leveraging the best mindsof IT and LOB for SaaS selectionand investment decisions?

• Where else could IT and LOB gainfrom each other’s perspectivesand resources? SaaSdeployment? Security?

• How can SaaS help you tapvaluable expertise beyond yourorganization?


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Take your SaaS Pulse today (it’s quick and painless,we promise)


http://www.ibm.com/ibmcai/saas

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And see how you measure up to SaaS pacesetters


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IBM SaaS PortfolioOverview

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CEOs identify technology as the most importantexternal force impacting their organizations.

IBM CEO Study, 2004-2013

Technology Factors

2004 201220102006 2008 2013

2 222 2 2

3 333 3 3

4 444 4 4

5 555 5 5

6 666 6 6

7 777 7 7

8 888 8 8

9 999 9 9

1 111 1 1

Market Factors

Macro-economic Factors

People Skills

Regulatory Concerns

Socio-economic Factors

Globalization

Environmental Issues

Geopolitical Factors

2323

Accelerate your innovationAccelerate your innovation with over 100 best-in-class software-as-a-service (SaaS)applications and business process-as-a-service (BPaaS) capabilities, all delivered with theenterprise-grade security, availability and elasticity you expect from IBM.

Accelerate businessprocess innovation

Deliver business analyticsat point of impact

Connect people withcollaborative businessnetworks

Tap into it.More than 100 SaaS applications.

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Shared IT/LOB strategy encourages a collaborativeSaaS buying agenda.

Line of Business is closest to the customer. IT is ahead of the curve on technology.By collaborating to address IT needs, they can jointly drive leadership and innovation

Innovative solutions

Security

Business Needs

IT NeedsFaster time to value

Up-to-datecapabilities

Always available Privacy

Scalability

Agility

Governance

Prevent “Shadow IT”.Create a Collaborative ITenvironment with a shared cloudstrategy, vision, and executionplan.

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Social BusinessCollaboration Suite

Human ResourcesTalent Management

Learning and Certification Employee Onboarding

Customer Care & SupportEngagement Advice

Experience ManagementClient Success

Sales & CommerceeCommerce

Performance AnalyticsQuote Management

MarketingDemand GenerationCampaign AnalyticsAgency Collaboration

IT OperationsService ManagementSecurity

City OperationsTransportation PlanningWater ManagementUtility Optimization

LegalContract ManagementRisk AnalyticsDocument Management

Procurement Contract Management Spend Analysis Strategic Sourcing

FinanceReporting

Risk AnalysisCompensation Models

IBM lets you tap into Role-Based Cloud Suites.

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BPaaS solutions let you accelerate business processinnovation with security, availability, and elasticity.

Reinvent businessoperations with BusinessProcess Management tools

Leverage industryvertical solutions

Improve speed bysourcing businessprocess expertise

Ready-to-use market-leading solutionslet you collaborate, capture processknowledge, and improve your business inunder 48 hours.

Industry expertise and experience tohelp you set policies, load data, andcustomize your ready-to-useapplications.

On-premise expertise, insights,analytics, and best-practices to improvebusiness processes and drive value.

• IBM Blueworks Live

• IBM Business Process Manager• IBM SmartCloud Service Delivery

for electronics

• IBM Panorama

• IBM GPS – order to cash with ARCollect

• IBM Payment Systems

• IBM GPS – recruitment processoutsourcing with Kenexa

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High-value applications: delivered at scale andhelping our clients innovate today.

300,000global trading entities connected for IBM clients

180 Milliontransportation managementtransactions annually

5.5 milliondaily transactions exchanged via IBMB2B cloud

120 million candidate records on the Kenexa talent management platform……accessed daily by

80,000 candidatesand more than one million hiring managers

60,000 users of IBM digital marketing tools send 130million monthly emails

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Broad coverage for front office roles with 8 SaaS suitesfor the c-suite

Deep domain expertise across 18 industries deliveredthrough IBM Global Business Services

Availability in over 50 countries today

Customer-centric value with outcome-based subscriptionmodels

Enterprise-grade security standards

Flexible deployment across private, public, and hybridcloud environments

Large and expanding global SaaS businesspartner community

Why do the world’s leading companies rely on IBMSaaS solutions?

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SocialBiz User Group socialbizug.org– Join the epicenter of Notes and Collaboration user groups

Follow us on Twitter– @IBMConnect and @IBMSocialBiz

LinkedIn http://bit.ly/SBComm– Participate in the IBM Social Business group on LinkedIn

Facebook https://www.facebook.com/IBMSocialBiz– Like IBM Social Business on Facebook

Social Business Insights blog ibm.com/blogs/socialbusiness– Read and engage with our bloggers

Engage online

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Thank You! Please reach out with questions!


Armen NajarianProgram DirectorWW SaaS Category Marketing

[email protected]

@ArmenNajarian


Susanne HupferClient Insights ConsultantIBM Center for Applied Insights

[email protected]

@cybersooz

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