What Makes Service Providers Relevant for Software-As-a-Service

At the onset of the Software-as-a-Service (SaaS) revolution many years ago, service providers were worrying about the possible cannibalisation of their IT services business. ISVs for their part highlighted the easy plug-and-play nature of their SaaS offerings, which enterprises could apparently deploy easily and cost effectively on their own. Service providers, especially those with large application development businesses, panicked trying to identify a Plan B.

A few years and SaaS cycles on, enterprises have realized that they need the help of IT service providers to get the maximum benefits from their SaaS investments. It is painfully apparent that an isolated SaaS deployment by a business unit that is not properly integrated into other IT systems, nor understood and ultimately used by employees has limited value. Unfortunately, most enterprises have only worked this out late in their SaaS journeys. Service providers are back in style.

ISVs are increasingly adopting an end-to-end view of their SaaS suites to ultimately sell more technology. Workday offers both HCM and financial management solutions, and want clients to use Workday as a platform for both functions. The Customer Success Platform is Salesforce’s complete CRM offering and represents the software provider’s move away from individual products to an integrated end-to-end CRM offering for clients. SuccessFactors’ Intelligent Services focuses on an end-to-end solution that can integrate different processes. All of this requires even more planning, integration and optimization services, increasing service provider opportunities in the SaaS services market.

Service providers have increased service opportunities because they can help enterprises understand the full extent of deploying SaaS, as well as offer continued support services to ensure new software releases remain relevant to dynamic business objectives.  

Moreover, while simplification is an important criterion for selecting SaaS solutions, buyers are now looking for tailored solutions that are more immediately relevant to their business needs. Service providers should be investing in industry sector solutions, including accelerators and templates to facilitate faster and more relevant deployments. Examples include Accenture’s Connected Physician Solution for Healthcare and PWC’s Total Retail Clienteling Solution.  

Service buyers are also looking for flexibility in service delivery and pricing. Enterprises demand just-in-time access to skills and advice rather than look to sign long-term contracts for a clearly defined statement of work.

Service providers are therefore relevant to the SaaS market. Notably leading service providers are demonstrating skills across the HfS 8 Ideals of the As-a-Service Economy. In particular, we see investments in Design Thinking, Collaborative Engagement and in Intelligent Automation and Accessible & Actionable Data. Service providers that make the right investments to offer relevant, pro-active offerings as well as adopt collaborative and flexible engagement methodologies will be the ultimate winners in the SaaS service market.