Embracing SaaS: Strategies of Winning Organizations

© 2013 IBM Corporation
Embracing SaaS:
Strategies of Winning
Organizations
Armen Najarian, IBM
Susanne Hupfer, IBM

1
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results similar to those stated here.
Please note

2
Today’s Speakers
Armen Najarian
Program Director, SaaS
Marketing GTM
Armen Najarian
Program Director
WW SaaS Category Marketing
armen@us.ibm.com
650-504-3430
@ArmenNajarian
Armen Najarian
Marketing GTM
Susanne Hupfer
Client Insights Consultant
IBM Center for Applied Insights
Susanne_Hupfer@us.ibm.com
617-693-8891
@cybersooz

3
Cloud computing is a force for business growth;
Software as a Service (SaaS) is a fast-growing
segment within cloud
Leading organizations are using cloud to gain competitive advantage
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
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

4
To gain a deeper understanding of how organizations
approach SaaS, we surveyed 879 IT and line of
business (LOB) decision makers
10%
36%42%
12%
Respondent distribution
(Organizations that currently deploy SaaS, spanning six countries* and 23 industries)
C-level IT
Geography
43%
57%
Mature
markets
Growth
marketsLOB 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
*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

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What is the #1 motivator driving SaaS adoption?

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Reducing costs is the #1 motivator driving SaaS
adoption, and many achieve it
Reduce TCO (vs. on-premise)
41%
SaaS was shown to reduce total
cost of ownership (TCO) of
applications
But what do enterprises accomplish with SaaS, even
more than reducing TCO?

7
Even more enterprises are gaining competitive
advantage through SaaS
Almost half of enterprises are
also gaining competitive
advantage through SaaS
Gain competitive advantage
47%

8
To learn from the leading organizations, we
segmented enterprises by level of SaaS adoption
and competitive advantage
8
Pacesetters (19% of the total) have the
highest level of SaaS adoption and are gaining
competitive advantage through these broad
efforts
Challengers (41%) have adopted SaaS more
narrowly, but are gaining competitive
advantage through their existing SaaS
deployments
Chasers (40%) are slower to adopt SaaS and
gain competitive advantage through it
Pacesetters
19%
* Based on # of application areas deployed as SaaS
*

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Pacesetters are motivated by higher-order values that
drive competitive advantage and market agility
Pacesetters (19%)Chasers (40% ) Challengers (41%)
Collaboration
Customer experience
Time to market
Reduced TCO
Application agility
Collaboration
How are Pacesetters gaining their competitive edge?
Top three
motivators
Segment
Reduced TCO
Application agility
Decision making

10
Dispelling a myth, leadership isn’t achieved by LOB
circumventing IT. Pacesetters show the strongest
level of IT + LOB collaboration.
Pacesetters surpass Chasers
The power of collaboration
SaaS strengthens the
IT and LOB relationship
Strong IT and LOB
collaboration on SaaS
selection and deployment
Strong IT and LOB
collaboration around
SaaS security
+79%
70%
39%
71%
36%
35%
24%
+97%
+46%
Pacesetters Chasers

11
In fact, Pacesetter IT and LOB tend to regard each
other as strategic partners on SaaS – one of two
essentials for achieving competitive advantage
+227%
+113%
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

12
Pacesetters also align their organizations around a
cohesive enterprise-wide SaaS strategy – the other
key to competitive advantage
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%

13
This approach enables Pacesetters to go beyond
enterprise efficiency – achieving deeper collaboration,
better decision-making, and market agility

14
Pacesetters are experts at using SaaS to increase
self-service capability, optimize operations and
improve application agility
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%
% Pacesetters
surpass Chasers
74%
(% using SaaS to achieve to significant degree)

15
Pacesetters also use SaaS to increase collaboration
and improve core business relationships across their
organizations and ecosystems
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%
% Pacesetters
surpass Chasers
61%

16
SaaS enables Pacesetters to convert big data into
new insights and improve decision making
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%
% Pacesetters
surpass Chasers
Achieved better decision making
+157%41%28% 72%

17
Finally, Pacesetters employ SaaS to unlock market
agility and become more responsive to market and
customer needs
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%
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%

18
Want to hone your own competitive edge through
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?

19
Take your SaaS Pulse today (it’s quick and painless,
we promise)
http://www.ibm.com/ibmcai/saas

20
And see how you measure up to SaaS pacesetters

21
IBM SaaS Portfolio
Overview

22
CEOs identify technology as the most important
external force impacting their organizations.
IBM CEO Study, 2004-2013
Technology Factors
2004 201220102006 2008 2013
2 222 2 2
3 333 3 3
4 444 4 4
5 555 5 5
6 666 6 6
7 777 7 7
8 888 8 8
9 999 9 9
1 111 1 1
Market Factors
Macro-economic Factors
People Skills
Regulatory Concerns
Socio-economic Factors
Globalization
Environmental Issues
Geopolitical Factors

23
2
3
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.

24
Shared IT/LOB strategy encourages a collaborative
SaaS buying agenda.
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.

25
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.

26
BPaaS solutions let you accelerate business process
innovation with security, availability, and elasticity.
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

27
High-value applications: delivered at scale and
helping our clients innovate today.
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

28
 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
Why do the world’s leading companies rely on IBM
SaaS solutions?

29
 SocialBiz User Group socialbizug.org
– Join the epicenter of Notes and Collaboration user groups
 Follow us on Twitter
– @IBMConnect and @IBMSocialBiz
 LinkedIn http://bit.ly/SBComm
– Participate in the IBM Social Business group on LinkedIn
 Facebook https://www.facebook.com/IBMSocialBiz
– Like IBM Social Business on Facebook
 Social Business Insights blog ibm.com/blogs/socialbusiness
– Read and engage with our bloggers
Engage online

30
Thank You! Please reach out with questions!
Armen Najarian
Marketing GTM
Armen Najarian
Program Director
WW SaaS Category Marketing
armen@us.ibm.com
650-504-3430
@ArmenNajarian
Armen Najarian
Marketing GTM
Susanne Hupfer
Client Insights Consultant
IBM Center for Applied Insights
Susanne_Hupfer@us.ibm.com
617-693-8891
@cybersooz

31
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