© 2014 IBM Corporation
SB 309 Embracing SaaS: Strategies of Winning Organizations
Armen Najarian, IBM
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Performance is based on measurements and projections using standard IBM benchmarks in a controlled environment. The
actual throughput or performance that any user will experience will vary depending upon many factors, including
considerations such as the amount of multiprogramming in the user’s job stream, the I/O configuration, the storage
configuration, and the workload processed. Therefore, no assurance can be given that an individual user will achieve
results similar to those stated here.
Cloud computing is a force for business growth; Software as a Service (SaaS) is a fast-growing segment within cloud
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Leading organizations are using cloud to gain competitive advantage
*Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation **Source: Gartner Forecast: Public Cloud Services, Worldwide, 2011-2017, 4Q13 Update, Ed Anderson, Lai-ling Lam, Yanna Dharmasthira, et al., December 26, 2013 For more info, visit: ibm.com/ibmcai/saas
SaaS is a key growth segment within cloud**: The Worldwide SaaS market is forecasted to grow at a CAGR of 20.2% in 2012-2017, growing from US$18.2 billion in 2012 to US$45.6 billion in 2017
Compared to peers, these leaders are*: 79% more likely to rely on cloud to locate and leverage expertise anywhere in the ecosystem 136% more likely to use cloud to reinvent customer relationships 170% more likely to use cloud-based analytics extensively to derive insights
To gain a deeper understanding of how organizations approach SaaS, we surveyed 879 IT and line of business (LOB) decision makers
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10%
36% 42%
12%
Respondent distribution (Organizations that currently deploy SaaS, spanning six countries* and 23 industries)
*To smooth possible geographic distortions, responses were weighted based on an 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 Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
C-level IT
Geography
43%
57%
Mature markets
Growth markets LOB VPs,
Directors, Managers**
Role
C-level LOB** 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
© 2014 IBM Corporation
Though reducing costs is the #1 motivator for considering SaaS, the more common result is a gain in competitive advantage
5 Source: IBM Center for Applied Insights Champions of Software as a Service: How SaaS is helping companies secure powerful competitive advantage For more info, visit: ibm.com/ibmcai/saas
SaaS was shown to reduce total
cost of ownership (TCO) of
applications
Reduce TCO (vs. on-premise)
But, almost half of enterprises are also gaining competitive advantage through SaaS
Gain competitive advantage
41%
47%
To learn from the leading organizations, we segmented enterprises by level of SaaS adoption and competitive advantage
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*Based on # of application areas deployed as SaaS
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
Pacesetters (19% of the total) have the highest level of SaaS adoption and are gaining competitive advantage through these broad efforts Top 3 Motivators: Collaboration, Customer Experience, Time to Market Challengers (41%) have adopted SaaS more narrowly, but are gaining competitive advantage through their existing SaaS deployments Top 3 Motivators: Reducing TCO, Application Agility, Decision Making Chasers (40%) are slower to adopt SaaS and gain competitive advantage through it Top 3 Motivators: Reduced TCO, Application Agility, Collaboration
High agreement
High
Low
Level
of
SaaS
ad
op
tio
n*
Low agreement
Gaining competitive advantage through SaaS
Challengers 41%
Chasers
40%
Pacesetters 19%
Pacesetters are motivated by higher-order values that drive competitive advantage and market agility
How are Pacesetters gaining their competitive edge?
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
Pacesetters (19%)
Collaboration
Customer experience
Time to market
Chasers (40% )
Reduced TCO
Application agility
Collaboration
Top three motivators
Segment Challengers (41%)
Reduced TCO
Application agility
Decision making
Dispelling a myth, leadership isn’t achieved by LOB circumventing IT. Pacesetters show the strongest level of IT + LOB collaboration.
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Pacesetters surpass Chasers The power of collaboration
SaaS strengthens the IT/LOB relationship
Strong IT/LOB collaboration on SaaS selection/deployment
Strong IT/LOB collaboration around SaaS security
70%
39%
71%
36%
35%
24%
Pacesetters Chasers
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
+79%
+97%
+46%
In fact, Pacesetter IT and LOB tend to regard each other as strategic partners on SaaS – one of two essentials for achieving competitive advantage
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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
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
+227%
+113%
Pacesetters also align their organizations around a cohesive enterprise-wide SaaS strategy – the other key to competitive advantage
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Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
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 % Pacesetters
surpass Chasers
71%
86%
This approach enables Pacesetters to go beyond enterprise efficiency – achieving deeper collaboration, better decision-making, and market agility
11 Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
Pacesetters are experts at using SaaS to increase self-service capability, optimize operations and improve application agility
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Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
Enterprise efficiency
Increased self-service capability for applications
Optimized business processes and workflows
Improved application agility (flexibly deploy and
implement solutions)
+185%
+136%
+126%
36%
41%
41%
26%
31%
28%
70%
66%
Chasers Challengers Pacesetters % Pacesetters
surpass Chasers
74%
(% using SaaS to achieve to significant degree)
Pacesetters also use SaaS to increase collaboration and improve core business relationships across their organizations and ecosystems
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Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
Real world example:
SafeGuard World
International
This top provider of managed payroll and employment outsourcing needed to
support an aggressive global expansion strategy.
It used a SaaS-based collaboration, knowledge-sharing and social project
management solution that enables its worldwide teams to respond more quickly
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%
Chasers Challengers Pacesetters
61%
(% using SaaS to achieve to significant degree)
SaaS enables Pacesetters to convert big data into new insights and improve decision making
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Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
Real world example:
PAC2000A
An Italian retail giant needed to overhaul its manual price management system in order
to keep up with the competition.
It implemented a SaaS-based price optimization solution, which offered frequent
analytics on cost and competitive data. This changed PAC2000A from an organization
that based pricing decisions on “gut feel” to one that leverages analytics to make more
informed decisions and predictive forecasts.
Result: 2.4% increase in comparable store sales
Better decision making
Leveraged analytics across organization to turn big data
into insights +112% 50% 34% 72%
Chasers Challengers Pacesetters % Pacesetters
surpass Chasers
Achieved better decision making +157% 41% 28% 72%
(% using SaaS to achieve to significant degree)
Finally, Pacesetters employ SaaS to unlock market agility and become more responsive to market and customer needs
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Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
Market agility
Increased innovation
Reduced time to market
Improved customer experience
+126%
+127%
+137%
40%
42%
47%
71%
68%
Chasers Pacesetters % Pacesetters
surpass Chasers
66%
(% using SaaS to achieve to significant degree)
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 carrying
5 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 usage
data to understand customer use and decision making, as well as gain insights
to transform the website. The airline has gradually released new pages and
continued 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%
Want to hone your own competitive edge through SaaS?
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Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas
Set ambitious objectives
Consider the full range of
benefits that SaaS could
help you attain.
• Where can you speed application
deployment and implementation?
• Which business processes could
be better optimized?
• How could broader, smoother and
more frequent collaboration inside
and outside your organization
improve results?
• Which teams could do a better job
by leveraging big data to inform
decision making?
Take a more strategic and
collaborative approach
Incorporate your SaaS
initiatives within an
enterprise-wide cloud strategy.
• What elements would round out
your current SaaS strategy?
• How could you better integrate
SaaS strategy into a broader
cloud strategy?
• Are you exerting just the right
amount of control over SaaS
deployment?
• What changes are needed to
keep your governance structures
current?
Broaden your collaborative
base
Multiply your chances of
success by encouraging close
IT and LOB collaboration.
• Are you leveraging the best minds
of IT and LOB for SaaS selection
and investment decisions?
• Where else could IT and LOB gain
from each other’s perspectives
and resources? SaaS
deployment? Security?
• How can SaaS help you tap
valuable expertise beyond your
organization?
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IBM SaaS Portfolio Overview
CEOs identify technology as the most important external force impacting their organizations.
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IBM CEO Study, 2004-2013
Technology Factors
2004 2012 2010 2006 2008 2013
2 2 2 2 2 2
3 3 3 3 3 3
4 4 4 4 4 4
5 5 5 5 5 5
6 6 6 6 6 6
7 7 7 7 7 7
8 8 8 8 8 8
9 9 9 9 9 9
1 1 1 1 1 1
Market Factors
Macro-economic Factors
People Skills
Regulatory Concerns
Socio-economic Factors
Globalization
Environmental Issues
Geopolitical Factors
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Accelerate your innovation Accelerate 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 the enterprise-grade security, availability and elasticity you expect from IBM.
Accelerate business process innovation Deliver business analytics at point of impact Connect people with collaborative business networks
Tap into it. More than 100 SaaS applications.
Shared IT/LOB strategy encourages a collaborative SaaS buying agenda.
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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 Needs Faster time to value
Up-to-date capabilities
Always available Privacy
Scalability
Agility
Governance
Prevent “Shadow IT”. Create a Collaborative IT environment with a shared cloud strategy, vision, and execution plan.
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Social Business Collaboration Suite
Human Resources Talent Management
Learning and Certification Employee Onboarding
Customer Care & Support Engagement Advice
Experience Management Client Success
Sales & Commerce eCommerce
Performance Analytics Quote Management
Marketing Demand Generation Campaign Analytics Agency Collaboration
IT Operations Service Management Security
City Operations Transportation Planning Water Management Utility Optimization
Legal Contract Management Risk Analytics Document Management
Procurement Contract Management Spend Analysis Strategic Sourcing
Finance Reporting
Risk Analysis Compensation Models
IBM lets you tap into Role-Based Cloud Suites.
BPaaS solutions let you accelerate business process innovation with security, availability, and elasticity.
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Reinvent business operations with Business Process Management tools
Leverage industry vertical solutions
Improve speed by sourcing business process expertise
Ready-to-use market-leading solutions let you collaborate, capture process knowledge, and improve your business in under 48 hours.
Industry expertise and experience to help you set policies, load data, and customize your ready-to-use applications.
On-premise expertise, insights, analytics, and best-practices to improve business 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 AR
Collect
• IBM Payment Systems
• IBM GPS – recruitment process
outsourcing with Kenexa
High-value applications: delivered at scale and helping our clients innovate today.
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300,000 global trading entities connected for IBM clients
180 Million transportation management transactions annually
5.5 million daily transactions exchanged via IBM B2B cloud
120 million candidate records on the Kenexa talent management platform…
…accessed daily by 80,000 candidates and more than one million hiring managers
60,000 users of IBM digital marketing tools send 130 million monthly emails
Why do the world’s leading companies rely on IBM SaaS solutions?
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Broad coverage for front office roles with 8 SaaS suites
for the c-suite
Deep domain expertise across 18 industries delivered
through IBM Global Business Services
Availability in over 50 countries today
Customer-centric value with outcome-based subscription
models
Enterprise-grade security standards
Flexible deployment across private, public, and hybrid
cloud environments
Large and expanding global SaaS business
partner community
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Thank You! Please reach out with questions!
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Armen Najarian @ArmenNajarian Program Director WW SaaS Marketing [email protected] 650-504-3430
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