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SaaS adoption driven by ‘competitive advantage’ and not solely cost cutting

Software as a Service [SaaS] products are being driven by the competitive advantage they provide and not just the amount of money that adopting the products can save.

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Research from IBM’s Centre for Applied Insights noted that almost half of those it surveyed are using SaaS to “attain a broad range of powerful benefits that combine to deliver something even more critical: competitive advantage.”

Of the 800 companies surveyed, 47 per cent stated that gaining a competitive advantage is most important with 41 per cent reporting the reduced total cost of ownership [TCO] as the most important factor.

Among the companies that gained a competitive advantage from SaaS products, most mentioned that cloud-powered social business tools and analytics are helping to foster cross-company collaboration. This ultimately gives a better customer experience and allows new products and services to hit the market more quickly.

Even though competitive advantage is highlighted by a number of firms once the technology has been installed, before it has been implemented most companies start looking into SaaS in order to cut costs.

“It’s common knowledge that deploying SaaS broadly has economic advantages, but the truly innovative companies have recognised that SaaS delivers real competitive advantage to fuel top-line growth, as well,” said Craig Hayman, IBM’s general manager of industry solutions, according to CloudPro. “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.”

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Companies that were early adopters of SaaS technology are also two times more likely to have increased innovation in the organisation as a whole. PepsiCo was given as an example with its Pepnet platform saving it both time and money by sifting through information more easily and making better use of assets. Under the original system it would have taken one person 20 hours a week to get a new label approved and this has been cut to around four hours under the SaaS regime.