The True Impact of SaaS on your Business – Part 1 – The Operation Group

Although there are still naysayers to the Software as a Service model, we cannot deny the speed in 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.

For the traditional ISV, the Operations Groups which consists of technical support, customer care and the R&D team have always been considered a "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 team? What is the true impact of the SaaS Model on this team?

The SaaS paradigm shift has certainly 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 Centre 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 in this mind-shift.
You can take the survey at: http://www.konverge.com/SaaS_Benchmarker.aspx