Those who know me (and those who have taken the time to read the about posts) know I worked at MindFlow where Jay Reddy was CEO for most of its existence and that I had my fair share (ok, more than fair share) of quarrels with Jay Reddy, but these were almost always centered around, or related to, technology development (selection, management, integration, people, etc.). However, on the sourcing side of the equation, especially from a strategic perspective, I have to admit Jay Reddy really knows his stuff – including where and how to best apply existing and emerging technology to solve your sourcing problems and improve your end results. (There is a big difference between knowing how to build technology and knowing how to use technology. I find that many great developers know the first, many great business minds know the second, but that very few people clearly see both sides of the picture.)
RSAG Research recently released their first annual Software-as-a-Service and the Need for Speed Benchmark Report 2007-2008 that found that retailers are feeling the “need for speed” when it comes to delivering new IT-enabled capabilities. This desire is driven from both internal and external pressures; customers are demanding better service from retailers (particularly for multi-channel customer order management), while the internal IT department is challenged to keep up with demands both from within and outside the company.
RSAG classifies retailers as winners, average, and also-rans. Whereas 34% of respondents “don’t know” what the value of SaaS is to their companies,
winners, defined as retailers with sales above the industry average sales growth of three percent, only 19% of winners are unsure what the value of SaaS is to their organization, and 41% of winners have “moderate” or “high” expectations from SaaS implementations over the next two years.
There are additional, subtle differences in how winners view SaaS as an option. Whereas average and laggard companies view SaaS as a “Fix”-It solution to do more, do it faster, and do it for less, winners view the SaaS delivery model as a way to accelerate value. Winners are also more influenced by their desire to meet the needs of their customers and trading partners then they are by IT’s capabilities or the cost of systems acquisition and integration.
It’s nice to see that at least in one industry, the majority of “winners” are starting to see the value of the SaaS delivery model and how it can enable an organization in weeks or days, and not the months or years it often takes to install behind-the-firewall enterprise-wide solutions.
In addition to a lot of great statistics, the report offers some good bootstrap recommendations for finding candidate SaaS applications for companies in general.
- Examine the IT backlog and pick a target application with relatively low risk but demonstrable value to start, remember that
- ROI wins, and be sure to
- ensure top-executive support.