embracing saas: strategies of winning organizations

© 2014 IBM Corporation

SB 309 Embracing SaaS: Strategies of Winning Organizations

Armen Najarian, IBM

2

Please Note

IBM’s statements regarding its plans, directions, and intent are subject to change or withdrawal without notice at IBM’s sole

discretion.

Information regarding potential future products is intended to outline our general product direction and it should not be relied

on in making a purchasing decision.

The information mentioned regarding potential future products is not a commitment, promise, or legal obligation to deliver

any material, code or functionality. Information about potential future products may not be incorporated into any contract.

The development, release, and timing of any future features or functionality described for our products remains at our sole

discretion

Performance is based on measurements and projections using standard IBM benchmarks in a controlled environment. The

actual throughput or performance that any user will experience will vary depending upon many factors, including

considerations such as the amount of multiprogramming in the user’s job stream, the I/O configuration, the storage

configuration, and the workload processed. Therefore, no assurance can be given that an individual user will achieve

results similar to those stated here.

Cloud computing is a force for business growth; Software as a Service (SaaS) is a fast-growing segment within cloud

3

Leading organizations are using cloud to gain competitive advantage

*Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation **Source: Gartner Forecast: Public Cloud Services, Worldwide, 2011-2017, 4Q13 Update, Ed Anderson, Lai-ling Lam, Yanna Dharmasthira, et al., December 26, 2013 For more info, visit: ibm.com/ibmcai/saas

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

To gain a deeper understanding of how organizations approach SaaS, we surveyed 879 IT and line of business (LOB) decision makers

4

10%

36% 42%

12%

Respondent distribution (Organizations that currently deploy SaaS, spanning six countries* and 23 industries)

*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 Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas

C-level IT

Geography

43%

57%

Mature markets

Growth markets LOB 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

© 2014 IBM Corporation

Though reducing costs is the #1 motivator for considering SaaS, the more common result is a gain in competitive advantage

5 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

SaaS was shown to reduce total

cost of ownership (TCO) of

applications

Reduce TCO (vs. on-premise)

But, almost half of enterprises are also gaining competitive advantage through SaaS

Gain competitive advantage

41%

47%

To learn from the leading organizations, we segmented enterprises by level of SaaS adoption and competitive advantage

6

*Based on # of application areas deployed as SaaS

Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas

Pacesetters (19% of the total) have the highest level of SaaS adoption and are gaining competitive advantage through these broad efforts Top 3 Motivators: Collaboration, Customer Experience, Time to Market Challengers (41%) have adopted SaaS more narrowly, but are gaining competitive advantage through their existing SaaS deployments Top 3 Motivators: Reducing TCO, Application Agility, Decision Making Chasers (40%) are slower to adopt SaaS and gain competitive advantage through it Top 3 Motivators: Reduced TCO, Application Agility, Collaboration

High agreement

High

Low

Level

of

SaaS

ad

op

tio

n*

Low agreement

Gaining competitive advantage through SaaS

Challengers 41%

Chasers

40%

Pacesetters 19%

Pacesetters are motivated by higher-order values that drive competitive advantage and market agility

How are Pacesetters gaining their competitive edge?


Pacesetters (19%)

Collaboration

Customer experience

Time to market

Chasers (40% )

Reduced TCO

Application agility

Collaboration

Top three motivators

Segment Challengers (41%)

Reduced TCO

Application agility

Decision making

Dispelling a myth, leadership isn’t achieved by LOB circumventing IT. Pacesetters show the strongest level of IT + LOB collaboration.

8

Pacesetters surpass Chasers The power of collaboration

SaaS strengthens the IT/LOB relationship

Strong IT/LOB collaboration on SaaS selection/deployment

Strong IT/LOB collaboration around SaaS security

70%

39%

71%

36%

35%

24%

Pacesetters Chasers


+79%

+97%

+46%

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

9

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


+227%

+113%

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

10


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%

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

11 Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks For more info, visit: ibm.com/ibmcai/saas

Pacesetters are experts at using SaaS to increase self-service capability, optimize operations and improve application agility

12


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%


surpass Chasers

74%

(% using SaaS to achieve to significant degree)

Pacesetters also use SaaS to increase collaboration and improve core business relationships across their organizations and ecosystems

13


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%

Chasers Challengers Pacesetters

61%


SaaS enables Pacesetters to convert big data into new insights and improve decision making

14


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%


surpass Chasers

Achieved better decision making +157% 41% 28% 72%


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

15


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%

Want to hone your own competitive edge through SaaS?

16


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?

17

IBM SaaS Portfolio Overview

CEOs identify technology as the most important external force impacting their organizations.

18

IBM CEO Study, 2004-2013

Technology Factors

2004 2012 2010 2006 2008 2013

2 2 2 2 2 2

3 3 3 3 3 3

4 4 4 4 4 4

5 5 5 5 5 5

6 6 6 6 6 6

7 7 7 7 7 7

8 8 8 8 8 8

9 9 9 9 9 9

1 1 1 1 1 1

Market Factors

Macro-economic Factors

People Skills

Regulatory Concerns

Socio-economic Factors

Globalization

Environmental Issues

Geopolitical Factors

19

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.

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

20

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.

21

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.

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

22

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

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

23

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

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

24

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

25

Engage Online

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

https://reg.socialbizug.org/wispubs/socbizwidgets.nsf/homepage.xsp

https://twitter.com/IBMConnect

https://twitter.com/IBMSocialBiz

http://bit.ly/SBComm

https://www.facebook.com/IBMSocialBiz

http://www.ibm.com/blogs/socialbusiness

http://www.ibm.com/software/data/champion

Thank You! Please reach out with questions!

26

Armen Najarian @ArmenNajarian Program Director WW SaaS Marketing [email protected] 650-504-3430

https://twitter.com/armennajarian

mailto:[email protected]

Access Connect Online to complete your session surveys using any:

– Web or mobile browser

– Connect Online kiosk onsite

27

28

Acknowledgements and Disclaimers

© Copyright IBM Corporation 2014. All rights reserved.

U.S. Government Users Restricted Rights - Use, duplication or disclosure restricted by GSA ADP Schedule Contract with IBM Corp.

Please update paragraph below for the particular product or family brand trademarks you mention such as WebSphere, DB2, Maximo, Clearcase, Lotus, etc.

IBM, the IBM logo, ibm.com, [IBM Brand, if trademarked], and [IBM Product, if trademarked] are trademarks or registered trademarks of International Business Machines Corporation in

the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these

symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law

trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml

If you have mentioned trademarks that are not from IBM, please update and add the following lines:

[Insert any special 3rd party trademark names/attributions here]

Other company, product, or service names may be trademarks or service marks of others.

Availability. References in this presentation to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates.

The workshops, sessions and materials have been prepared by IBM or the session speakers and reflect their own views. They are provided for informational purposes only, and are neither

intended to, nor shall have the effect of being, legal or other guidance or advice to any participant. While efforts were made to verify the completeness and accuracy of the information

contained in this presentation, it is provided AS-IS without warranty of any kind, express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise

related to, this presentation or any other materials. Nothing contained in this presentation is intended to, nor shall have the effect of, creating any warranties or representations from IBM or

its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software.

All customer examples described are presented as illustrations of how those customers have used IBM products and the results they may have achieved. Actual environmental costs and

performance characteristics may vary by customer. Nothing contained in these materials is intended to, nor shall have the effect of, stating or implying that any activities undertaken by you

will result in any specific sales, revenue growth or other results.

http://www.ibm.com/legal/copytrade.shtml

embracing saas: strategies of winning organizations

Technology

cloud cover

cloud computing

cloud leading organizations

cloudbased analytics

public cloud services

potential future products

service saas

embracing saas