SaaS: The Great Enabler of Growth
Every company has aspirations to grow. Growth is exciting, yet it can also be challenging, especially for those companies that have already experienced early stage growth and are now settling in for the long haul. While that early growth may not necessarily have been easy, all the low hanging fruit has been picked and the clear and easy paths to growth have already been travelled. Operations are more complicated now and new paths to growth are riskier. It is no longer easy to keep your business simple and the solutions that got you to your current size may not be sufficient to power you through to the next level of growth.
You need to start thinking and acting like a big company long before you have the budget or the staff of a large enterprise. Software delivered as a service (SaaS) could well be your ticket to maintaining good governance and control, business consistency and efficiency, and speedy decisions that minimize risk, all without a capital expenditure. This is the 4th in our series on the benefits delivered by SaaS, and it could well open your eyes to some exciting possibilities.
The Path to Growth
Growth aspirations aren’t new. Companies have always looked for opportunities to expand and grow either organically or through mergers and acquisition (M&A). And let’s face it: There are only so many different ways your company can grow. You either add new products or services or sell more of those you already offer. That may sound simple enough, but, more often than not, it is anything but simple. And today’s global, digital economy only further complicates matters. The Internet has leveled the playing field, allowing even smaller companies to establish a global presence, creating unprecedented opportunities. But with those opportunities come new challenges.
Growth oriented companies have been dealing with the challenges of a global economy and a distributed work force for decades now. Operating across a distributed environment has become a way of life for a large percentage of businesses today, even smaller ones. In fact 75% of all survey participants in the 2019 Mint Jutras Enterprise Solution Study had more than one operating location (Figure 1). Even small companies (those with annual revenues under $25 million) average 4.91 operating locations, and that number grows steadily as revenues grow.
Historically the best opportunity for expansion was in established economies. The likelihood of that continuing is low. Today completely new markets are opening up in emerging economies. Innovation, advanced technology and the Internet have combined to create new consumer middle classes in countries that were hardly industrialized a short decade ago, creating unprecedented growth opportunity for both products and services. Not only does this result in increasingly remote and distributed environments, it also adds risk and creates new challenges in maintaining governance and control. These opportunities also bring companies into uncharted territory. Not only is the demand for product and services untested, but also there is no rich pool of local talent well versed in business and technology.
At the same time expectations are accelerated: consumers, shareholders and Wall Street all expect everything to happen more quickly. To capitalize on this opportunity, growing companies will need to take some chances and be willing to fail, but fail (or succeed) rapidly in order to move on to the next opportunity. They will need to leverage technology in order to manage, maintain control and reduce risk, and do so at a rapid pace. They can’t afford to take years to implement solutions to run the business. And they may not have the deep pockets or the time needed to build out infrastructure half a world away from their established locations.
SaaS Solutions to the rescue. No capital expenditure required; no need to build out a data center, or even put hardware or a huge information technology (IT) staff in country. And for years now Mint Jutras research shows that solutions delivered as software as a service (SaaS) reach their first go-live milestone faster than in traditional, on-premise deployments.
The access any time, from anywhere nature of a cloud solution is conducive to supporting distributed users and bringing up remote sites rapidly and easily. While cyber-security is an understandable concern to all today, SaaS solution providers not only deliver added security, but also the peace of mind of business continuity in the event of a disaster, either natural or man-made.
The Talent Factor
Technology is a key enabler in helping you grow faster, with less additional headcount. Back office applications streamline processes for improved productivity and efficiency. This is critical because in emerging economies, you can’t assume you have the same pool of skills and business maturity that have traditionally been available in well-established economies. Those that do have business skills and may be your best conduit for dealing with cultural issues, may not be technically adept.
The right enterprise applications can help, but only with a new generation of modern applications. By automating processes around best practices, companies can essentially teach local talent the business and enforce standard business processes. Managing the software delivered as a service puts corporate headquarters and those in key established locations, in a much better position to be able to effectively monitor use and actions from afar.
Putting new generation software in the cloud can be an effective response to the people challenge, particularly in terms of the “anytime, anywhere” nature of web-based access, easily connecting employees across the globe and providing a platform for collaboration and an implementation template that can become the blueprint for growth. But even beyond this convenience, a SaaS-based solution can add a level of business consistency that helps mitigate risk while adding a significant measure of governance and control.
CapEx versus Opex
Not only does the cloud help in providing remote access to an increasingly distributed work force, it also reduces the capital (CapEx) required to enter new territories. The cost of bringing up new sites can be treated as an operating expense (OpEx). The last thing you want is to have your growth stunted because you can’t afford the cost of hardware and software to support growth. Lower startup cost and easier scalability also contribute to making expansion easier.
Maintaining Governance and Control
Delivering financial and business process consistency is particularly challenging for companies that are growing. This level of governance and control is even harder in undeveloped countries where management may need to play hardball – enforcing these levels of control may be akin to ramming them down local throats.
Consistent business processes and visibility throughout the enterprise lead to better operational governance and control and risk management. A cloud solution helps integrate new parts of the organization, whether these new parts come from organic expansion or M&A. Emerging economies, or even new territories in mature economies may add requirements for new accounting standards, currencies and tax jurisdictions. “Cloud” alone does not insure these are all properly handled, so look beyond deployment and make sure you have the proper financial features and functions as well.
Summary and Key Take-aways
Never before have companies experienced such potential for growth – not small incremental growth, but huge unprecedented opportunity. But those looking to take these big, bold, giant steps will also face challenges. Emerging economies add to this tremendous growth opportunity, but also add risk and people challenges. Along the way comes the need to tighten the reins on governance and control.
SaaS can be a tremendous facilitator of growth. To capitalize on growth opportunities, particularly if growth is bringing you into emerging markets, companies will need to take some chances and be willing to fail, but fail (or succeed) rapidly in order to move on to the next opportunity. SaaS solutions require less capital expenditure and can be put in place without building out data centers and recruiting staff hired just to keep the lights on. SaaS software implementations can speed the process through faster times to “first go live” milestones.
You will need to recruit local talent, but you will likely not have the same pool of skills, comfort with technology and business maturity that are available in well-established economies. A good SaaS solution can help you automate processes around best practices, essentially serving to teach local talent good business and also enforce corporate standards.
While growth opportunities abound, growth never comes without a certain element of risk (more on that in our final installment). Cloud solutions allow you to fail (or succeed) faster. Particularly when you expand into new territories, you are able to get in quickly, with lower startup costs. If the opportunity plays out, you succeed faster. If not, you have limited your capital expense and are able to move on faster and with fewer regrets.
And throughout the growth process you need to maintain an acceptable level of governance and control. What better way to enforce corporate standards than by rolling them out through a standard implementation template of a SaaS solution that is defined and managed centrally? A cloud solution aids both operational and financial leaders in implementing standard cross-organizational business processes more effectively and gives them the visibility into the business needed to continually assess progress and the potential of new markets.
Yes, growth can be exciting and it can also be challenging. Arm yourself well with the right enterprise applications and technology. Consider SaaS solutions as an important component of your arsenal as you battle for market share.
Cindy Jutras is a widely recognized expert in analyzing the impact of enterprise applications on business performance. Utilizing over 45 years of corporate experience and specific expertise in manufacturing, supply chain, customer service and business performance management, Cindy has spent the past 14 years benchmarking the performance of software solutions in the context of the business benefits of technology. In 2011 Cindy founded Mint Jutras (www.mintjutras.com), specializing in analyzing and communicating the business value enterprise applications bring to the enterprise.