How Software-as-a-Service Is Accelerating Digital Transformation

George T. Taft

In a fast-moving, disruptive business environment, digital transformation is the key to improving operations, developing new business models, and tapping into new revenue streams to stay ahead of the competition. So why aren’t more organizations addressing their transformation more aggressively?

The biggest brake on speed and innovation is the cost of failure. It’s understandable that risk aversion is hardwired into so many organizations; the up-front investment for digital transformations can be prohibitive, and failure can be ruinous, particularly for small and medium-sized enterprises.

The key to accelerating transformation is to reduce the cost of failure. And software as a service (SaaS) can unleash this innovation by helping to reduce costs.

Benefits of SaaS

SaaS is an on-demand model that lets users access software and applications in the cloud, freeing them from the burden of purchasing and managing complex software and hardware. Users pay subscription fees for the software they need, when they need it, so executives can adopt a “try-fail-try-again” model until they find solutions for their business challenges.

Some of the biggest advantages of SaaS include:

  1. Reduced time to market: SaaS enables growth, resilience, and efficiency to help organizations find the right solutions faster.
  2. Start small, scale fast: SaaS enables companies to start small and scale fast to realize return on investment quickly.
  3. Ease of use and lower costs: SaaS removes operational complexity and allows organizations to perform proof of concept more affordably.
  4. Flexibility: SaaS offers options to change subscriptions to meet a company’s evolving demands.
  5. Up-to-date functionality: SaaS allows stakeholders to access the latest functionality and up-to-date features.

Pay as You Grow

The next level of this business model is anything as a service (XaaS), a term encompassing all cloud-based services customers can order, including SaaS, platform as a service (PaaS), infrastructure as a service, and mobility as a service.

A growing number of organizations are seeing the benefits of XaaS. One is Saildrone, a U.S.–based startup that provides comprehensive turnkey data solutions for maritime security, ocean mapping, and ocean data gathering with a fleet of uncrewed surface vehicles. With a lightweight IT and development operations team, Saildrone found that XaaS solutions helped it scale fast and build a single, dependable source for engineering data across disciplines within the company.

“We have had great success getting adoption and use throughout the company,” Saildrone Chief Technology Officer Andrew Schultz says. “Manufacturing uses it for purchasing and building of our components in our drones; then our finance and G&A [general and administrative] teams also use [it] to track inventory.” Adopting XaaS has given the company access to a portfolio on a digital platform that is scalable and flexible, using an out-of-the-box configuration to accelerate its speed of innovation.

Get What You Need, Pay What You Need

Silicon Valley Power (SVP), a municipal utility in Santa Clara, California, is reaping the benefits of migrating its utility data to meter-data management (MDM), a cloud-based SaaS solution that has removed the need for infrastructure, hardware, and systems upgrades.

The streamlined operation has reduced employees’ time spent on everyday tasks and routines by 85%. Its migration to SaaS has also helped SVP achieve significant cost savings, increased cybersecurity resilience, and quicker, more efficient access to high-quality billing data, all without service disruptions. Using MDM allowed SVP to upgrade its system while reducing its cost of ownership and minimizing the potential costs of failure.

Innovate, Fail Cheaply, Try Again, Scale Up

Business leaders need an innovative digital platform to achieve their goals and push boundaries while keeping costs in line with usage and growth. They need to try new strategies faster and fail cheaply. And when they succeed, they need to scale up quickly and easily.

What can businesses do to accelerate the move to SaaS?

“Leaders who view the cloud as an enabler rather than an end state will be most successful in their digital transformational journeys,” according to a recent Gartner report. The organizations combining cloud with adjacent emerging technologies such as PaaS, Gartner says, will fare even better.

A growing demand for SaaS offerings is enabling more customers to try new solutions more quickly, fail cheaply, try again, and scale up easily. SaaS can reduce the costs of failure considerably and accelerate transformation decisively.

Your competitors may already be adopting cloud services to improve and accelerate their digital transformations at breakneck speeds, adopting transformative technologies such as the industrial internet of things, artificial intelligence, blockchain, digital twins, edge computing, and 5G. Gartner estimates worldwide end-user spending on public cloud services will grow 20.4% in 2022.

To speed up your innovation cycle and remain competitive, pay-as-you-grow access will be essential to failing more cheaply and succeeding faster with SaaS.

Find more about how to make digital business transformation easier, faster and at scale with Siemens Xcelerator.

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