SaaS companies are growing rapidly and becoming the top priority for most CIOs. With such high growth expectations, many SaaS vendors are investing in sales and marketing to acquire new customers even if it means having a negative net profit margin as a result. Moreover, with the pressure to grow rapidly, there is an increased urgency to ensure that the Average Sales Price (ASP) of every transaction increases in order to meet revenue targets.
The nature of the cloud allows these SaaS companies to release new features every few months, which sales reps can then promote to new customers. When new functionalities are not used nor understood, customers often feel that they have overpaid for a SaaS product. In such cases, customers usually downgrade to a lower-priced edition or worse, leave the vendor entirely. To make up for this loss, the sales representatives must work harder to acquire new leads, which results in less attention for existing customers. Preventing customer churn is very important. The Cost to Acquire a Customer (CAC) for upsells is 19% of the CAC to acquire new customer dollars. In comparison, the CAC to renew existing customers is only 15% of the CAC to acquire new customer dollars.
Accurate customer usage data helps determine which features customers use and which are under utilized. Gathering this data can help pinpoint high-value features that are not used, especially for customers that have recently upgraded to a higher edition. The process of collecting this data involves several touch points – from recording clicks within the app to analyzing the open rate of entire modules. This is where embedded cloud integration comes into play.
Embedding integration within a SaaS application allows vendors to gain operational insights into each aspect of how their app is being used. With this data, vendors are able to provide feedback to product management in regards to further improvements. Additionally, embedding integration can alert the customer success management team of potential churn, thereby allowing them to implement preventative measures.
To learn more about how a specialized analytics environment can be set up for SaaS apps, join Informatica and Gainsight on April 9th at 10am PDT for an informational webinar Powering Customer Analytics with Embedded Cloud Integration.
Within most organizations today, it is not a question of if SaaS applications should be deployed, but how quickly. The era of having to justify adoption of SaaS applications is long over, and the focus has shifted towards a deciding which SaaS applications to deploy, in which departments, and in what timeframes. With this view in mind, let us explore the typical journey that most companies take when deciding which SaaS applications to implement first.
Related: Learn more about customer facing processes vs. customer fulfillment processes in the March 25th webinar ‘Accelerate Business Velocity with NetSuite and Salesforce Integration’
Customer Facing Processes
The main impetus behind switching to a SaaS application is because of the agility the cloud brings. Customizations that normally take weeks to get implemented take minutes or days, and can be performed by employees that do not possess an in-depth knowledge of the technical infrastructure of the SaaS system. With that being said, it is customer-facing processes that require application customizations almost immediately because optimizing these processes results in bringing in revenue quickly into the company, thereby enabling CIOs to show rapid ROI of a SaaS application.
It is no wonder that front-office applications such as Salesforce have become one of the largest SaaS vendors out there today. The entire process of converting a lead to a closed opportunity has several steps in between, and may require multiple workflows in parallel. But the journey doesn’t stop there. To keep customers satisfied and retain them, their product needs to be fulfilled, and this is where customer fulfillment processes come into play.
Customer Fulfillment Processes
Once an opportunity has been closed, the process of getting the product to the customer begins. Traditionally, this role has been done by large-scale on-premise ERP vendors, but leading cloud ERP companies such as NetSuite are showing how the complex task of fulfilling orders and realizing revenue can be done faster. Processes such as applying category-specific price and quantity discounts, special tax regulations involving several regions and nations, and fulfillment through multiple delivery options all have several moving parts. Moreover, the task of invoicing the customer, collecting payment, and recording numerous financial transactions is an entire sub-process in of itself and the only way it can be streamlined is through cloud ERP applications.
Optimizing the Entire Lead-to-Cash Process with Cloud Integration
When looking at customer-facing and customer-fulfillment processes together, it is very clear that SaaS apps in both categories need to work hand-in-hand to ensure that an organization’s customers are satisfied, and continue to engage in repeat business. This is why organizations that are starting the rollout of front-office SaaS applications also need to be thinking about rolling out back-office ERP SaaS applications along with a cloud integration solution to tie it all together. In the March 25th webinar, ‘Accelerate Business Velocity with NetSuite and Salesforce Integration’, we’ll talk about a blueprint for integrating both these types of apps together and how the Australian Institute of Management deployed these apps as part of a multi-million dollar IT transformation project.
An explosion in mobile devices and social media usage has been the driving force behind large brands using big data solutions for deep, insightful analytics. In fact, a recent mobile consumer survey found that 71% of people used their mobile devices to access social media.
With social media becoming a major avenue for advertising, and mobile devices being the medium of access, there are numerous data points that global brands can cross-reference to get a more complete picture of their consumer, and their buying propensities. Analyzing these multitudes of data points is the reason behind the rise of big data solutions such as Hadoop.
However, Hadoop itself is only one Big Data framework, and consists of several different flavors. Facebook, which called itself the owner of the world’s largest Hadoop cluster, at 100 petabytes, outgrew its capabilities on Hadoop and is looking into a technology which would allow it to abstract its Hadoop workloads across several geographically dispersed datacenters.
When it comes to analytics projects that require intensive data warehousing, there is no one-size fits all answer for Big Data as the use cases can be extremely varied, ranging from short-term to long-term. Deploying Hadoop clusters requires specialized skills and proper capacity planning. In contrast, Big Data solutions in the cloud such as Amazon RedShift allow users to provision database nodes on demand and in a matter of minutes, without the need to take into account large outlays of infrastructure such as servers, and datacenter space. As a result, cloud-based Big Data can be a viable alternative for short-term analytics projects as well as fulfilling sandbox requirements to test out larger Big Data integration projects. Cloud-based Big Data may also make sense in situations where only a subset of the data is required for analysis as opposed to the entire dataset.
With cloud integration, much of the complexity of connecting to data sources and targets is abstracted away. Consequently, when a cloud-based Big Data deployment is combined with a cloud integration solution, it can result in even more time and cost savings and get the projects off the ground much faster.
We’ll be discussing several use cases around cloud-based Big Data in our webinar on August 22nd, Big Data in the Cloud with Informatica Cloud and Amazon Redshift, with special guests from Amazon on the event.
It’s no secret that software as a service (SaaS) applications like Salesforce CRM, Eloqua, Workday, NetSuite and Concur, to name a few, often get their start in the enterprise through individual departments, divisions and subsidiaries. Known for their rapid deployment times, frequent feature releases with API updates and end-user ease of use, SaaS applications are typically much more dynamic than on-premise business applications. New fields and objects can be added with a few clicks by line-of-business administrators, analysts and operational roles. So when it comes to data integration, waiting for IT to redevelop and deploy mappings every time there is a metadata change typically doesn’t meet the expectations of business users and application owners, who are used to greater speed and agility in the cloud.
The Informatica Winter 2013 announcement included the following customer quote:
“The Winter 2013 release will accelerate the time it takes to access, integrate and deliver valuable data in order to meet our business imperatives.”
It was also noted that, “the new Informatica Cloud user interface will make the cloud integration solution even more user friendly.” There are a number of user experience enhancements with this upgrade, so I sat down with Joshua Vaughn, Principal User Experience Designer for Informatica Cloud, to learn more about the impetus behind the new design and features, what’s on the horizon for the future releases, and why user interface (UI) design is so important for cloud applications.
Did you know that Forrester estimates in their 10 Cloud Predictions For 2012 blog post that on average organizations will be running more than 10 different cloud applications and that the public Software-as-a-Service (SaaS) market will hit $33 billion by the end of 2012?
However, in the same post, Forrester also acknowledged that SaaS adoption is led mainly by Customer Relationship Management (CRM), procurement, collaboration, and Human Capital Management (HCM) software and that all other software segments will “still have significantly lower SaaS adoption rates”. It’s not hard to see this in the market today, with cloud juggernaut salesforce.com leading the way in CRM, and Workday and SuccessFactors doing battle in HCM, for example. Forrester claims that amongst the lesser known software segments, Product Lifecycle Management (PLM), Business Intelligence (BI), and Supply Chain Management (SCM) will be the categories to break through as far as SaaS adoption is concerned, with approximately 25% of companies using these solutions by 2012. (more…)