June 17, 2008

Poll: Phase of customer life cycle most difficult to migrate to SaaS

The realities of the SaaS model are that there is less upfront revenue, it is transaction/usage-based, and it is renewal dependent. To be successful a SaaS must optimize time to market, control fixed & variable costs, and keep headcount low, even as services grow.  This is on top of the need to create compelling user experiences using RIAs to keep customers engaged.

With traditional on-premise applications, most phases in the customer life cycle (sales, marketing, customization, provisioning, training, billing, etc) are managed by people and services that are not part of the “core” software application. But with a successful and scalable SaaS, all aspects of the customer life cycle are exposed directly to the customer and all need to be handled as part of the strategy and design of the SaaS.  You are not just migrating the core application online, you are migrating the customer life cycle management and interaction points online and into the software. If each interaction point does not scale without adding staff, you forgo economies of scale and profitability becomes elusive. 

Not all phases of the customer life cycle are as easy to move to software as others. Depending on the nature of the business, internal momentum and constraints of IT or SOA architecture, organizations may not move a particular phase into software and instead handle it the more traditional, albeit less scalable way - using people. Our poll asks you to indicate which phase in the life cycle are you least likely to move into software.