10-ways to champion Software-as-a-Service in your company

If you’re reading this you are probably, like me, 20s to 30s, perhaps 40s, but not top management in your company, very well read online, aware of all these cool apps, some of them free, others at prices cheaper than having lunch, and sincerely wanted your organization to ride the wave by utilizing some of these applications to do business. Statistically, you’re also likely to be a small / medium enterprise (SME), not a “filthy rich” company with huge IT budgets who can afford an army from Bangalore or have enough PCs and servers to fill a ship container.

But your boss, the business driver, is convinced of an alternative plan. Here’s a recent e-mail that I received, reproduced with permission.

HI bro,

want to hear your thoughts… we have recently hired an Indian IT person. Young (24) and proficient (Masters from NUS).

and that kick starts a series of in-house development from my bosses… HRIS, CRM system, blah blah.. The sad thing is that our website is not even up to standard yet.

is this realistic? There seems to be many things in the pipeline .. but nothing comes out yet. =p we jump from one thing to another.

Also, there is a ‘strong reluctance’ to explore into new things such as social media, Google Adwords, etc. … what can I do?

My bosses are ambitious.. and my voice of ‘outsourcing, cloud computing, social media’ is not heard.

I’ve been reading much in the Net, the development is exciting. Thankfully that I was able to bring in Salesforce in 2006… followed by Google Apps in 2008… but nothing much since then … Hire IT people = in-house devt?

What’s your take?

This is such an important situation to address, I decided to respond to it here. Let me share 10 effective ways that I’ve seen work, or, have personally championed, that you can use to help push your agenda to your bosses. These are practical tips, not high drama strategies from McKinsey, therefore it’s definitely not for everyone – you should pick and choose those that work with your company.

1. Separate what makes the company more money from what helps company reduce cost

Jack Ma (founder of Alibaba) once said this of SMEs (paraphrased): “These companies are running with skin on bones. Any effort to help them ‘cut cost’ is likely not going to be impactful. On the other hand, anything that helps the company earn more money is much better appreciated.” He did it by helping SMEs find more customers on his auction website. You can help your company by selecting the best go-to-market tools instead of harping on the best HR application the company should be using.

The number one pitfall of talking about SaaS is to lump various types of applications under one roof, and it turns out that the easiest categorization is simply whether it’s a top line booster (increase revenue) or a bottom line protector (decrease cost). Revenue Tools, e.g. your marketing tools, sales tools, social media tools, certain field force productivity tools, and some might even argue your invoicing tools, can help your company become more well known, nimble, connects with new customers faster and more efficient, charge them quicker, seal revenue leaks. On the other hand, Cost Tools, e.g. your human resource tools, procurement tools, accounting tools, and all sorts of ERP like tools, mainly helps your company be more six-sigma-ish, making cost more visible and controllable, support customers better to keep their loyalty. There are some tools that are “in between” in the sense that it can help gain you new customers or it’s just a cost you have to incur, depending on how you utilize it. High on this list is your customer service tool, which can actually be used for sales lead generation, depending on the nature of your business and how you set it up.

Once you’re clear, focus on the ones that makes the company more money first. Putting down money to explore new ways to get more revenue is usually easier than putting down money to cut cost. With SaaS, the magic happens when you can easily switch between providers if you find them unsatisfactory. Once the tool acquires more revenue than it cost monthly, it’ll be there to stay.

2. Speak your decision maker’s language

Obviously you are speaking a common language to your decision makers, but have you ever recorded yourself and listen to the amounts of jargon that you’re throwing at him when you’re championing SaaS? By articulating your proposal using the odd and sometimes gimmicky Web2.0 company’s names can throw someone who has been in business for a while off center.

For example, the phrase “social media” immediately rings a bell in many big bosses mind, being fed by the fear on mainstream newspapers on how people who said something wrong cost the company’s decades of reputation. Another phrase that raises an alarm is “hosted application”, this seemingly innocuous word hosted can sometimes be associated with “sacrificing” the privacy of one’s data by putting it in the hands of your enemy. And I’m just picking from the email I quoted above.

Instead, try to relate the new technologies today with older technologies that your stakeholder understands. You can say, for example (depending on how old school your boss is), that there’s a new way to fax purchase orders to your vendors that has your signatures, that is to use an e-Fax service, which operates very much like a telephone service, except, you can fax directly from your word processor or email composer! Or to tackle social media, you could say, that there’s a new way to invite people to come for a (physical) event, that is to send out an invitation through a virtual network of business contacts. No social, no media. Just getting people together. To avoid having to emphasize the word hosted, perhaps try to emphasize the word “private” when you’re describe the “private collaborative space between you and your customer/partner/vendor”. Don’t know where this space is, don’t care. Is private.

Of course, different people speak a different language, you’ll have to find out which word your boss is sensitive to, and try to find other sweet spots when you articulate your vision.

3. Go for trusted SaaS vendors

At the risk of sounding like selling my own employer’s medicine here, I felt that this is still one of the major hurdle that needs to be addressed, because a lot of really “cool” and “today” services are provided by small start-ups that can fold tomorrow. And it is not funny having the folding company run away with your data and leaving your company in a limbo.

Fortunately it is easy to see which provider will be around for a much longer time than others. They are probably the providers who have been providing you service for a very long time already. If Muthu IT services has been your trusted provider in the past 5 years, installing your MS Office and maintaining your website, then Muthu is probably also the best person whom you can trust to advise on what kind of SaaS application to buy. This is counter-intuitive in the sense that we tend to separate the “dinosaur companies” from the hippies (how would that Ah Beng know how to configure SalesForce CRM), but you have to realize that putting together a desktop and then configuring your network drivers and then coding a website is a lot more complicated than the average SaaS apps out there, with check boxes and radio buttons and an instant operational mode.

In many cases it boils down to convincing your trusted vendor to sell you SaaS, especially when switching out vendors who understands your business can hurt the business. If Muthu is always telling your boss to buy more of his servers so that he can qualify to attend the vendor’s secret Sentosa parties, you might want to consider motivating that vendor to propose SaaS products instead. Some example that I’ve seen (might not work for you!) is to show the vendor that they can earn a larger margin with SaaS (which is true on average), or pitting two vendors against each other (to get to the “I’m more SaaSy than you” situation), or simply help your vendor script his sales script (he really might have better things to do than to always commit to paying CPF for a guy to maintain your CRM system while getting squeezed by your boss for best value).

4. Use your 24-year old masters IT grad

Never underestimate NUS masters graduates 🙂 According to recent polls on the papers they earn as much as some unknown Stanford masters graduate working in governments and GLCs for 5 years 😉 I think the same goes to many other university graduates, as they also carry with them the idealism that work in business looks like homework and can be solved by building the greatest application. If your company is a software product house, that might be exactly the energy you need, otherwise you need to help them drive their energy in the right direction. If you’re the IT person yourself, you also need to read this.

From the on-set, always engage and share the business perspective with your in-house IT person. Let him (and her, implied) understand that his job is not necessarily to build the best of breed application, but to be able to find and integrate pieces of functionality that’s useful for the business. His job is very much like playing jigsaw puzzle, and usually it’s more fun playing with your own toys. So it natural that he would download open source software, try to upgrade your webserver from Apache 1.0 to Apache 2.0, claim that you need a wordpress blog on the site for interactivity, and confidently announces to boss that he is also a SugarCRM black belt. Find a way to tweak that ego by appealing to his emotions of wanting to “fit in” to the core business, by cheering him on whenever he says something like “but the total cost of ownership of an in-house CRM tool is tremendous!”

Some older fashion bosses might misconstrue more forward looking IT grads who proposes to out-source and use SaaS applications as trying to skim work or not feeling that he has enough capability to hold the fort. The boss is already running thin on headcount and he needs a tech savvy person to take care of the messy stuff and when the next thing the IT guy says is all we need is to sign up for 3 accounts of Google Apps and all our problems will be solved will only exacerbate the insecurity of the business person. So, turn it around and teach him how to inspire confidence with the boss. He needs to be able to say how he’s going to take a SaaS app, in crystal clear diagram show where data is stored, what is he doing as a recourse, what’s the backup strategy, how would the selection of apps used integrate seamlessly with each other, and how the total cost of doing all these is a better 6 month or 3 year plan compared to writing a hardware and software depreciation entry in the company’s books. Evidently I’m stereotyping here, but the average geek that’s good at taking care of your IT is not very articulate and persuasive so you’ve got to try to help him out.

5. Work on greenfield capabilities

Somewhat related to point 1 is to be able to look at your company’s spectrum of IT investment and ask yourself what’s next, and try to influence from the new technologies. This can vary greatly from SME to SME, but most of the time it’s going to be something that’s related to your business niche. An education provider might want to look at engaging students on social media. A logistics provider might want to explore how he can track his people on the field using GPS. A training provider might want to figure out whether he can conduct classes online through video conferencing.

Through new business plans like these, where an outline of new revenue potential can be highlighted in a project by project basis is very friendly to the business, as it gets put into the company’s product roadmap. The business as a whole needs to defend and attack at the same time, so while resources are being put into recurring customers on existing products, there’s always a need to innovate, and you should pound on that resource to move forward.

To get greenfield capabilities through, always try to articulate in terms of competitive differentiation, such as why the company is in a first-mover advantaged position to invest in such a thing, and how by leveraging this SaaS application the company can avoid over investing when getting their customer’s initial feedback, and tweak from there. Focus on selling the idea that it’s now possible to do more iterations and react quickly to the market.

6. Push for a great user experience (even if the functionality is simple)

One interesting fact I found when selling SaaS applications is that the better UI one gets picked even when the other one has more functionality. People do judge the book by the cover after all. You can make this your advantage by shortlisting the best applications and picking the more visually and interactively desirable application when proposing to bosses.

But user experience is more than just a visual look. Sometimes it’s the process, and understandably SaaS providers don’t illustrate that well. Some uses videos, while others provide you with a trial account to use it for 3 months. In these cases, do the following: Make a slide deck, doesn’t have to be long, but take in the video if any (unless it’s a boring negative one), capture screenshots as you march through the free trial account, filling in relevant information to your business, and show using your best presentation effort, how various co-workers or business partners interact using the business application. Make a guestimate to the process improvements, the sales touch points or whatever metric improvement you think the tool can help, and put in in the deck. Bold. Red. Exclamation mark.

Even if your boss is the hands-on type, don’t let him just sign up a trial account. You create the accounts and make it easy for him to simply log in with already some information about the company pre-populated. That way it’s easier for his neurons to connect. Default applications just don’t cut it.

7. Get real feedback from your business customers

Continuing on the same thread, make the effort to involve your customers in this. Don’t need many, one or two close ones will do. Always bounce ideas off them. Say you want to implement a shared online storage with your customer where you can always drop the latest piece of work you have for them there, so that they can give real time feedback. Then just get a free account and try it out with one customer.

Most importantly, get his written feedback, or better if you can put that customer in front of your bosses to describe on behalf of you how he like to interact with you. Customers are always king, especially the good type of customer (you know, those who pays you 80% of your topline but only require 20% of your work), so use them to your advantage.

The same goes for other business partners, or other departments if it’s an internal tool (is there a CEO office or HR dept for example), or just teammates if no one else. Just don’t make it a one man show when proposing such new ideas.

8. Plan your marketing campaigns holistically. Don’t do social media for fame

This is more specific to the social media marketing, and other related online means of engaging customers. A lot of SMEs know the power of social media but are afraid to spend effort to engage because even if it cost nothing to “buy” the product, it cost the employee effort to create one (and then faces a challenge measuring).

Before you do anything, if you think there’s a chance of engaging a marketing consultant, please go for one with digital marketing capabilities on top of the traditional media channels. In fact I would even say that you cannot get your digital marketing wrong because these days, what happens in Vegas stays in Facebook, Twitter, Friendster, you name it. It’s much harder to correct those marketing mistakes later.

Just as long as you don’t do social media to try to create a celebrity status when you don’t have one in the first place. Do it just like you’d do a serious marketing campaign. Engage your company’s comms / PR person and sit down to draw out a plan. How many people you intend to reach online? How many leads do you expect? You can even bring those questions to your provider. Thinking of buying social media monitoring? Ask them how much the conversion rate you can get from their tool based on their experience dealing with customers. Bidding for AdWords? Check the click through rate for your keyword and analyze whether you are over or underspending. Have a plan, then propose to your boss. You’re much more likely to get a yes let’s go ahead.

9. Don’t over integrate

Just to quote another person I came across in life, Rick Dalzell, CIO Amazon.com who repeatedly tell the developers this during quarter conferences: Harden APIs, minimal integration. So that teams can move quickly and does not cause trouble to others. As we move to an increasingly SaaS world, one of the challenge would be to ensure that the data that you have can flow through from system to system. This is the main culprit behind going after a single vendor setup or on-premise setup.

Different SaaS providers solves this differently. SalesForce forces everyone to build apps on them so that the data lives inside them, so you’ll have an issue if you have some in-house and some hosted. Others are very open with their APIs and invite you to integrate external systems and pass data around, but you’ll have to do all the work. As the industry (Google, Amazon, SalesForce, Twitter, Facebook, and that’s just the Americans) battles it out, your best bet is to keep data that’s relevant to that application in that application. Find connectors for data that you absolutely have to share between applications, but by and large, don’t over integrate all your systems.

Another strategy for this is to look for applications that are stand alone in its functionality. That day I saw a really cute service by SingPost called Click Post. It allows you to print your documents directly to the post office, where they will put it on paper, insert into an envelope and send it to your recipient at a per-letter fee not much higher than the cost of a stamp. Think about the saliva you’ll save licking stamps! But more importantly, there’s absolutely no need for integration. If you’re a spamming company you can do your mail merge directly from your word processor. You can also sprinkle some manual intervention as a stop gap, such as situations where you need to “tick” to whom you have print/sent your invoice to, but the total cost for the business would be much lower than printing it yourself.

10. Most importantly, ask for budget! This is not surprising because a lot of the bottom-up champions for SaaS blissfully ignore the fact that there will be OpEx appearing every month in their company’s books and OpEx is blood for SME. Yes GMail is free but GMail for enterprise with service level guarantees are not. You need resource to push for such change in one way or another. So grow up!

Conclusion
The key thing is: don’t make it a in-house versus outsource discussion for your boss. This kind of discussion puts it back to the business driver to look at things from the perspective of the P&L, which cannot reflect the many good things you’re trying to drive, such as brand value, customer engagement, etc. Putting ROI in the forefront would simply kill most discussion because there’s usually no immediate or attributable results, whether it’s in social media marketing analytics or CRM productivity to sales metric or the value of collaborating documents with your vendors.

Perhaps I’ll follow up with 10 things you shouldn’t do another time.

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4 Responses

  1. Wow, amazing reply.. triggered by one email . I should write to you more often. Thanks!

  2. I just realized your tips are actually very good not only for people who wanna champion SAAS but also for people selling SaaS.. companies that offer SaaS could benefit from changing their marketing messages and focus to what you suggested above. Very good article. Thanks!

  3. […] Ong Jiin Joo : 10-ways to champion Software-as-a-Service in your company […]

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