1. SB 309
Embracing SaaS: Strategies
of Winning Organizations
Armen Najarian, IBM
© 2014 IBM Corporation

2. Please Note
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configuration, and the workload processed. Therefore, no assurance can be given that an individual user will achieve
results similar to those stated here.
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3. Cloud computing is a force for business growth; Software
as a Service (SaaS) is a fast-growing segment within cloud
Leading organizations are using cloud to gain competitive advantage
Compared to peers,
these leaders are*:
SaaS is a key growth segment
within cloud**:
79% more likely to rely on cloud to locate and
leverage expertise anywhere in the ecosystem
The Worldwide SaaS market is forecasted to grow
at a CAGR of 20.2% in 2012-2017, growing from
US$18.2 billion in 2012 to US$45.6 billion in
2017
136% more likely to use cloud to reinvent
customer relationships
170% more likely to use cloud-based analytics
extensively to derive insights
*Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation
**Source: Gartner Forecast: Public Cloud Services, Worldwide, 2011-2017, 4Q13 Update, Ed Anderson, Lai-ling Lam, Yanna Dharmasthira, et al., December 26, 2013
For more info, visit: ibm.com/ibmcai/saas
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4. To gain a deeper understanding of how organizations
approach SaaS, we surveyed 879 IT and line of business
(LOB) decision makers
Respondent distribution
(Organizations that currently deploy SaaS, spanning six countries* and 23 industries)
Role
12%
C-level
LOB**
42%
LOB VPs,
Directors,
Managers**
10%
C-level IT
36%
IT VPs,
Directors,
Managers
Organization size
(# of employees)
20%
10,000+
40%
2,500 – 9,999
Geography
40%
<2,500
43%
Mature
markets
57%
Growth
markets
Growth markets surveyed: Brazil,
China, India, South Africa
Mature markets surveyed: UK, USA
*To smooth possible geographic distortions, responses were weighted based on an IBM assessment of each country’s total IT spend.
**LOB functions surveyed: Marketing, Procurement, Supply Chain, Sales/Commerce, Finance, Customer Service, Human Resources and Legal
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas
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5. Though reducing costs is the #1 motivator for considering SaaS, the
more common result is a gain in competitive advantage
SaaS was shown to reduce total
cost of ownership (TCO) of
applications
But, almost half of enterprises
are also gaining competitive
advantage through SaaS
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Reduce TCO (vs. on-premise)
41%
Gain competitive advantage
Source: IBM Center for Applied Insights Champions of Software as a Service: How SaaS is helping companies secure powerful competitive advantage
For more info, visit: ibm.com/ibmcai/saas
47%
© 2014 IBM Corporation

6. To learn from the leading organizations, we segmented
enterprises by level of SaaS adoption and competitive
advantage
High
Pacesetters
19%
Level of SaaS adoption*
Challengers
41%
Pacesetters (19% of the total) have the highest level
of SaaS adoption and are gaining competitive
advantage through these broad efforts
Top 3 Motivators: Collaboration, Customer
Experience, Time to Market
Challengers (41%) have adopted SaaS more
narrowly, but are gaining competitive advantage
through their existing SaaS deployments
Top 3 Motivators: Reducing TCO, Application Agility,
Decision Making
Chasers
40%
Chasers (40%) are slower to adopt SaaS and gain
competitive advantage through it
Top 3 Motivators: Reduced TCO, Application Agility,
Collaboration
*Based on # of application areas deployed as SaaS
Low
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas
High
agreement
Low agreement
Gaining competitive advantage
through SaaS
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7. Pacesetters are motivated by higher-order values that
drive competitive advantage and market agility
Segment
Top three
motivators
Chasers (40% )
Challengers (41%)
Pacesetters (19%)
Reduced TCO
Reduced TCO
Collaboration
Application agility
Collaboration
Application agility
Decision making
Customer experience
Time to market
How are Pacesetters gaining their competitive edge?
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas

8. Dispelling a myth, leadership isn’t achieved by LOB
circumventing IT. Pacesetters show the strongest level of
IT + LOB collaboration.
The power of collaboration
Pacesetters surpass Chasers
70%
36%
35%
Strong IT/LOB
collaboration around
SaaS security
24%
Chasers
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas
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+97%
39%
Strong IT/LOB
collaboration on SaaS
selection/deployment
Pacesetters
+79%
71%
SaaS strengthens the
IT/LOB relationship
+46%

9. In fact, Pacesetter IT and LOB tend to regard each other as
strategic partners on SaaS – one of two essentials for
achieving competitive advantage
Fostering strategic partnerships
Pacesetters surpass Chasers
72%
IT respondents view
LOB as a strategic
partner for SaaS
+227%
37%
22%
66%
LOB respondents
view IT as a strategic
partner for SaaS
54%
31%
Pacesetters
Challengers
Chasers
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas
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+113%

10. Pacesetters also align their organizations around a
cohesive enterprise-wide SaaS strategy – the other key to
competitive advantage
Strategic approach to SaaS
Chasers
Challengers
Pacesetters
% Pacesetters
surpass Chasers
Has a mature and cohesive enterprise-wide SaaS strategy
31%
46%
71%
+129%
SaaS is a critical piece of enterprise cloud strategy
12%
18%
48%
+300%
SaaS provider is a strategic partner/advisor
28%
56%
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas
10
86%
+207%

11. This approach enables Pacesetters to go beyond enterprise
efficiency – achieving deeper collaboration, better decisionmaking, and market agility
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Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas

12. Pacesetters are experts at using SaaS to increase selfservice capability, optimize operations and improve
application agility
Enterprise efficiency
(% using SaaS to achieve to significant degree)
Chasers
Challengers
Pacesetters
% Pacesetters
surpass Chasers
Increased self-service capability for applications
26%
36%
74%
+185%
Optimized business processes and workflows
31%
41%
70%
+126%
Improved application agility (flexibly deploy and
implement solutions)
28%
41%
66%
+136%
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas
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13. Pacesetters also use SaaS to increase collaboration and
improve core business relationships across their
organizations and ecosystems
Real world example:
SafeGuard World
International
This top provider of managed payroll and employment outsourcing needed to
support an aggressive global expansion strategy.
It used a SaaS-based collaboration, knowledge-sharing and social project
management solution that enables its worldwide teams to respond more quickly
and effectively to fast-breaking issues and opportunities.
Result: 20% reduction in implementation time
Deeper collaboration
(% using SaaS to achieve to significant degree)
Chasers
Challengers
Increased collaboration across organization and ecosystem
34%
37%
Improved core business relationships
28%
44%
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas
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Pacesetters
61%
71%
+79%
+154%

14. SaaS enables Pacesetters to convert big data into new
insights and improve decision making
Real world example:
PAC2000A
An Italian retail giant needed to overhaul its manual price management system in order
to keep up with the competition.
It implemented a SaaS-based price optimization solution, which offered frequent
analytics on cost and competitive data. This changed PAC2000A from an organization
that based pricing decisions on “gut feel” to one that leverages analytics to make more
informed decisions and predictive forecasts.
Result: 2.4% increase in comparable store sales
Better decision making
(% using SaaS to achieve to significant degree)
Chasers
Leveraged analytics across organization to turn big data
into insights
Achieved better decision making
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas
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Challengers
Pacesetters
% Pacesetters
surpass Chasers
34%
50%
72%
+112%
28%
41%
72%
+157%

15. Finally, Pacesetters employ SaaS to unlock market agility
and become more responsive to market and customer needs
Real world example:
Virgin Atlantic
A major carrier – with more than 9,000 employees, 41 aircrafts and carrying
5 million passengers/year – wanted to redesign its website to be more user-friendly.
It used a SaaS analytics solution to aggregate historical and current site usage
data to understand customer use and decision making, as well as gain insights
to transform the website. The airline has gradually released new pages and
continued to refine the site based on customer data.
Result: 10% increase in flight bookings, 7% increase in average booking value
Market agility
(% using SaaS to achieve to significant degree)
Chasers
Chasers
Pacesetters
% Pacesetters
surpass Chasers
Increased innovation
29%
40%
66%
+126%
Reduced time to market
30%
42%
71%
+137%
Improved customer experience
30%
47%
68%
+127%
30%
44%
71%
+137%
Changed organization’s business model
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas
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16. Want to hone your own competitive edge through SaaS?
Set ambitious objectives
Consider the full range of
benefits that SaaS could
help you attain.
Take a more strategic and
collaborative approach
Incorporate your SaaS
initiatives within an
enterprise-wide cloud strategy.
• Where can you speed application
deployment and implementation?
•
What elements would round out
your current SaaS strategy?
• Which business processes could
be better optimized?
•
How could you better integrate
SaaS strategy into a broader
cloud strategy?
• How could broader, smoother and
more frequent collaboration inside
and outside your organization
improve results?
• Which teams could do a better job
by leveraging big data to inform
decision making?
•
•
Are you exerting just the right
amount of control over SaaS
deployment?
What changes are needed to
keep your governance structures
current?
Source: IBM Center for Applied Insights Champions of competitive advantage: Inside the most successful SaaS playbooks
For more info, visit: ibm.com/ibmcai/saas
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Broaden your collaborative
base
Multiply your chances of
success by encouraging close
IT and LOB collaboration.
• Are you leveraging the best minds
of IT and LOB for SaaS selection
and investment decisions?
• Where else could IT and LOB gain
from each other’s perspectives
and resources? SaaS
deployment? Security?
• How can SaaS help you tap
valuable expertise beyond your
organization?

17. IBM SaaS Portfolio Overview
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18. CEOs identify technology as the most important external
force impacting their organizations.
2004
2006
2008
2010
2012
2013
1
1
1
1
1
1
Technology Factors
2
2
2
2
2
2
Market Factors
3
3
3
3
3
3
Macro-economic Factors
4
4
4
4
4
4
People Skills
5
5
5
5
5
5
Regulatory Concerns
6
6
6
6
6
6
Socio-economic Factors
7
7
7
7
7
7
Globalization
8
8
8
8
8
8
Environmental Issues
9
9
9
9
9
9
Geopolitical Factors
IBM CEO Study, 2004-2013
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19. Tap into it.
More than 100 SaaS applications.
Accelerate your innovation
Accelerate your innovation with over 100 best-in-class software-as-a-service (SaaS)
applications and business process-as-a-service (BPaaS) capabilities, all delivered with the
enterprise-grade security, availability and elasticity you expect from IBM.
Accelerate business
process innovation
Deliver business analytics
at point of impact
Connect people with
collaborative business
networks
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20. Shared IT/LOB strategy encourages a collaborative
SaaS buying agenda.
Line of Business is closest to the customer. IT is ahead of the curve on technology. By collaborating to address IT needs, they can jointly
drive leadership and innovation
Business Needs
Innovative solutions
Faster time to value
IT Needs
Up-to-date
capabilities
Security
Privacy
Always available
Scalability
Agility
Governance
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Prevent “Shadow IT”.
Create a Collaborative IT
environment with a shared cloud
strategy, vision, and execution
plan.

21. IBM lets you tap into Role-Based Cloud Suites.
Procurement
Human Resources
Contract Management
Spend Analysis
Strategic Sourcing
Talent Management
Learning and Certification
Employee Onboarding
Legal
Customer Care & Support
Engagement Advice
Experience Management
Client Success
Social Business
Collaboration Suite
City Operations
Sales & Commerce
Transportation Planning
Water Management
Utility Optimization
eCommerce
Performance Analytics
Quote Management
IT Operations
Finance
Reporting
Risk Analysis
Compensation Models
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Contract Management
Risk Analytics
Document Management
Marketing
Demand Generation
Campaign Analytics
Agency Collaboration
Service Management
Security

22. BPaaS solutions let you accelerate business process
innovation with security, availability, and elasticity.
Reinvent business
operations with Business
Process Management tools
•
•
IBM Blueworks Live
IBM Business Process Manager
Ready-to-use market-leading solutions let you
collaborate, capture process knowledge, and
improve your business in under 48 hours.
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Leverage industry vertical
solutions
•
•
IBM SmartCloud Service Delivery for
electronics
IBM Panorama
Industry expertise and experience to help
you set policies, load data, and customize
your ready-to-use applications.
Improve speed by
sourcing business
process expertise
•
•
•
IBM GPS – order to cash with AR
Collect
IBM Payment Systems
IBM GPS – recruitment process
outsourcing with Kenexa
On-premise expertise, insights, analytics, and
best-practices to improve business processes
and drive value.

23. High-value applications: delivered at scale and helping
our clients innovate today.
300,000 connected for
global trading entities
5.5 million
daily transactions exchanged via IBM B2B
IBM clients
cloud
60,000 users of IBM digital marketing tools send 130 million
monthly emails
180 Million
transportation management
transactions annually
120 million candidate records on the Kenexa talent management platform…
…accessed daily by 80,000 candidates
and more than one million hiring managers
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24. Why do the world’s leading companies rely on IBM SaaS
solutions?
 Broad coverage for front office roles with 8 SaaS suites
for the c-suite
 Deep domain expertise across 18 industries delivered
through IBM Global Business Services
 Availability in over 50 countries today
 Customer-centric value with outcome-based subscription
models
 Enterprise-grade security standards
 Flexible deployment across private, public, and hybrid
cloud environments
 Large and expanding global SaaS business
partner community
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25. Engage Online
 SocialBiz User Group socialbizug.org
– Join the epicenter of Notes and Collaboration user groups
 Follow us on Twitter
– @IBMConnect and @IBMSocialBiz
 LinkedIn http://bit.ly/SBComm
– Participate in the IBM Social Business group on LinkedIn:
 Facebook https://www.facebook.com/IBMSocialBiz
– Like IBM Social Business on Facebook
 Social Business Insights blog ibm.com/blogs/socialbusiness
– Read and engage with our bloggers
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26. Thank You! Please reach out with questions!
Armen Najarian
@ArmenNajarian
Program Director
WW SaaS Marketing
armen@us.ibm.com
650-504-3430
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27.  Access Connect Online to complete your session surveys using any:
– Web or mobile browser
– Connect Online kiosk onsite
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