In the recent study of SaaS XXV, HFS surveyed 1000+ enterprise decision-makers, services professionals, and software manufacturers to determine their points of view on how software-as-a-service (SaaS) creates business value. Demographics included:
- 688 Enterprise business and technology decision makers
- 248 service provider professionals
- 75 software vendor decision makers
The SaaS XXV looked at business value creation across the software and services ecosystem. End-users and service providers were asked to rate the SaaS solution they use or implement and its ability to create value for the business. Creating business value is a lot more than being satisfied with the software or its ease of use. Business value is created when software facilitates the activities, data, and information flow across a firm, its partners, and its customers. We asked end-users and service providers to identify the most important metrics for measuring the business value created by their SaaS solution – and it’s clear that they’re focused on different things. The chart shows that service providers rate long-term, strategic criteria as important measures of SaaS business value. Enterprise users however are more focused on short-term, tactical criteria.
- 26% of service providers believe that the adoption of SaaS as a percentage of the potential users within the organization is the most important metric for measuring the business value of SaaS investment. Conversely, enterprise users are more focused on SaaS consumption, which is more aligned to the overall volume of SaaS used. While both criteria are important, service providers are more aligned to long-term business benefits.
- 18% of service providers believe that the ongoing cost: value ratio is an important metric for measuring the SaaS business value. Only 4% of enterprise users agree. The value should not be measured as a one-time calculation at the time of implementation. Instead, enterprises must conduct ongoing cost: value ratio assessments to understand the dynamic business value of their SaaS investment.
- 17% of service providers consider the reduction of internal IT costs as an important metric to measure SaaS investment business value. Interestingly, only 4% of enterprise users agree with this. Enterprises usually cite cost savings as one of the top reasons to invest in new technologies, so it is surprising that they don’t seem to value it as an actual business value measurement in SaaS investment.
- Enterprises are more focused on the quality of the software, vendor support, and the cost to implement than service providers. These are all tactical, short-term criteria that do not necessarily support long-term business benefits.
- Both enterprises and service providers agree that customer satisfaction is an important measure of SaaS investment business value. This needs to be elevated to connected partner, customer, and employee focus to ensure business value, as outlined in the HFS OneEcosystem™
The Bottom Line: Enterprises must work with service providers to ensure long-term business benefits from their SaaS investments.
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