Don’t Underestimate the “Service” in “Software as a Service”

As a provider of on-demand budgeting and planning solutions, we are both a consumer of Software as a Service solutions as well as provider. That reality drives home the importance of the service aspect of SaaS.

We rely on a diverse range of SaaS-based solutions, including our own, to drive our business. Whether it’s web collaboration, sales and marketing automation, or budgeting and planning, we rely on our SaaS vendors to be both service providers and solution experts. For example, I am directly involved in the use of web marketing-related SaaS solutions. I also have a confession, I am not a marketing person by either training or experience; I’m an accountant. I welcome all the help and expertise I can get as it relates to web site design, delivery techniques and measurement. The companies that provide our marketing-related SaaS solutions are my trusted advisors. They are teaching me web marketing, helping me look like I know what I’m doing and increasing web traffic.

In addition (don’t cringe when I say this), my software implementations are never complete. In the case of our SaaS marketing tools, we bought the service with one objective in mind but in reality, we have since implemented it to solve six additional objectives. We didn’t plan to use the solution nor did we think we could use it for an additional five objectives when we signed up for the service. Our SaaS marketing solution provider helped us every step of the way to extract more value from their solution. We see the same thing with our customers. They start using our product for streamlining the monthly financial close process, or automating their budgeting process and over time have implemented it for continuous planning, XBRL reporting, IFRS reporting and strategic management. And our support group is providing the additional expertise to support our customers’ further implementations.

We believe that providers of SaaS-based business solutions must put service into the solution as much as the technology and theory. If we are to ever ascend to the leadership of specific solution categories, we need to become “trusted advisors” and sherpas.

To borrow an old adage, SaaS vendors need to teach clients to fish, so they can feed themselves. SaaS expert Jeff Kaplan has some thoughtful comments on the subject. (Do a text search for ‘SaaS Primer’ and follow the link to a white paper, “CIO’s Guide to Software as a Service.” No registration is required.)

Another Case for Measurement: Investors Are Getting It!

I am an investor. I invest in equities (except right now). I was just reviewing my American Association of Individual Investors Journal from August and the headline on the front of the magazine reads, “Measuring Managers’ Mettle: A Revealing Investment Gauge.” The article points out that just reading financials is not enough when making an investment decision. Rather, “management effectiveness, quality, character and values” also are important, though these traits are “often disregarded by Wall Street.” Well, I couldn’t agree more.

One of the key indicators to me, and apparently to other investors as well, is the degree to which company “measuring managers” assess management effectiveness and stock market returns. This concept is further supported by an article published in the November 20, 2006, issue of Investors Business Daily. Author J. Bonasia references a Hackett Group study that finds, “Public companies that use BI systems have stock market returns 2.4% higher than those of peers that rely on basic spreadsheets to do budgeting and planning, according to a survey of 200 global firms.” And this only addresses one aspect of corporate performance management (budgeting). It does not address scorecard methodologies that I would expect offer an even higher return.

I’m now doing some text searches on news articles to track announcements that public companies have hired or promoted someone to “CPM Officer,” one of the key principles to corporate performance management as identified in the book Five Key Principles of Corporate Performance Management by Bob Paladino. If Measuring Managers can be an investment gauge, how much more powerful is it if we know they are implementing a CPM solution by following the key principles ?