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The True Impact of SaaS on your Business - The Operations Group

By Uri Lederman, Business Development Manager, Konverge Digital Corporation

Although there are still naysayers to the Software as a Service model, we cannot deny the speed at which traditional ISVs are looking to transition their already existing perpetual model into this pay-as-you-go model. As a SaaS Enabler, we constantly respond to questions from Independent Software Vendors who are trying to make the painstaking decision of getting SaaSy. Careful planning will make the difference between a profitable operation and one that is bleeding the company dry of cash.

For the traditional ISV, the Operations Groups which consists of technical support, customer care and the R&D team have always been considered "Cost Centers". Software as a Service offers ISVs the ability to automate some of the processes associated with this team. Provisioning, ordering and billing can certainly be automated using technology. So where does this leave our operations team? What is the true impact of the SaaS Model on this team?

The SaaS paradigm shift has definitely made an impact on our Operations Group. These professional teams who are supporting a service are now a focal point in a successful business operation. Customer Care is accountable for customers successfully using the service; Help Desk and Support Services are accountable in making sure that the business is meeting Service Level Agreements and the R&D team is accountable in streamlining development to add functionality at a rapid pace.

Here is a quick glimpse of how these three components of the Operations Group have changed:

Customer Service Traditional ISV SaaS Model
   
Cost Center Valued group
   
Tasked with provisioning and billing issues Ordering, billing & provisioning can be automated
   
Tasked with being first line of customer calls Accountable for customers' utilization of the service
   
    Responsible for Customer Churn
Help Desk / Support Services Traditional ISV SaaS Model
   
Help Desk is technical solver with both internal & external customers Mainly supporting operations
   
Supporting numerous builds and versions of software Accountable for business meeting SLAs
   
Tasked with being first line of customer support calls First Line Help Desk can be automated
   
    Responsible for Customer Churn
R&D Team Traditional ISV SaaS Model
   
Focus on bug fixes for dispersed versions Mainly supporting operations
   
Not developing in the latest & greatest technologies reduces morale Accountable for business meeting SLAs
   
Long Software Development Life Cycle Incorporate of Agile methods and reductions in development cycles
   
  Responsible for Customer Churn

The common denominator is "Customer Churn" which is really the biggest impact on operations. In order to succeed as a SaaS business, Independent Software Vendors must make the internal change from selling perpetual license to a subscription service. This change is NOT limited to Sales & Marketing; it also changes the internal structure of Customer Service / Support & R&D. This is not an easy task.

There is however a benchmark tool that can help you with this mind-shift.

You can take the survey at: www.konverge.com/SaaS_Benchmarker.aspx

The results of this survey will give the contributing ISV a quick synopsis of where they stand compared to other ISVs in the following areas:

  • Additional Revenue Potential
  • Cost Savings
  • New Market Potential
  • Initial Investment

This article is part of "The True Impact of SaaS on your Business" Series. Next time, we will tackle the impact on Sales & Marketing. If you liked this article, you'll find the second part coming up next month, at our blog at blog.konverge.com.

Uri Lederman is the Director of Business Development for Konverge Digital Corporation. We design and deliver Optimal Software Applications that enable clients to achieve their business vision. Take our SAAS Benchmark tool at www.konverge.com/SaaS_Benchmarker.aspx today to see where you compare among your peers.