IBM study reveals competitive advantages of SaaS

Merchants today are expanding their capabilities at an astounding rate by taking advantage of the Software-as-a-Service (SaaS) delivery model. For many, it’s a cost-effective alternative to traditional on-premise commercial or open-source software packages that often require charges to upgrade software and purchase additional licensing, which are in addition to the initial and sometimes hefty price tag.

Although cost efficiencies are justification enough to take the SaaS route, in a recent study, IBM touted the competitive advantages inherent to SaaS as an equally important driver. After surveying 879 IT and business decision makers, it was revealed that better in-house collaboration, improved customer service and an increased time to market were additional benefits found when adopting SaaS.

According to the IBM study, 61 percent of pacesetters – those respondents who had the highest level of SaaS adoption – said SaaS increased internal and external collaboration while 68 percent said it improved the customer experience. An overwhelming 72 percent identified SaaS as a means to leverage analytics and gain insight from large data sets.

“It’s common knowledge that deploying SaaS broadly has economic advantages, but the truly innovative companies have recognized that SaaS delivers real competitive advantage to fuel top-line growth, as well,” said Craig Hayman, the IBM executive sponsor of the study, in a recent press release. “Whether they are using it to enter new markets, transform or create entirely new business models, or improve relationships with their customers and suppliers, pacesetting organizations are embracing SaaS in a meaningful way.”

For companies residing in the competitive eCommerce arena, finding a leg up goes far beyond the cost of the software itself. In fact, one of the main benefits of SaaS is relieving an IT department of the sole responsibility of managing new software. With the flood of tech tools popping up to meet and exceed the needs of online shoppers, IT professionals can be spread so thin that they find little time for collaborative sessions outside of their department. According to the study, SaaS can increase those opportunities with 66 percent of pacesetting respondents finding it easier to deploy and implement solutions.

And compared to some internally developed solutions, more SaaS solutions are becoming available that are better suited to tackle a business’s growth initiatives. Within the IBM study, several case studies were given to highlight the advantages brought on by those solutions.

“PAC2000A, an Italian retail giant with 2011 sales topping 2.2 billion Euros, had been using a homegrown application and ‘gut feel’ to manage shelf prices across more than 1,000 member stores,” IBM editors explained in the study’s findings. “Their pricing application wasn’t able to incorporate consumer demand into its pricing equations, whether on a national or local scale. With the implementation of a SaaS-based price optimization solution, PAC2000A gained sophisticated analytical capabilities on fine-grained cost and competitive data. This led to more category-centric, localized pricing decisions, more accurate forecasts, and a 2.4 percent increase in comparable store sales.”

So as the level of SaaS adoption increases, businesses will find themselves overcoming hurdles that were once obstructing the path to agile decision-making. When planning and implementing their initiatives becomes more streamlined through SaaS solutions, they will be better able to focus on customer-centric strategies to grow their market share.