Manufacturers of SaaS, stop thinking like software companies!
This is called Software-as-a-Service (Software as a Service, SaaS), but manufacturers still continue to focus on the first S (software), and not the last (service). But it is the service that makes SaaS unique and distinguishes its business architecture from obsolete types (software rental, installed software, etc.). But full use of the benefits of SaaS requires manufacturers to change their way of thinking; stop thinking like software companies, and start thinking like service companies.
By shifting your thinking this way, your result will be better suited to user expectations, increase revenue, and allow you to better protect your position in the market. The shift is small, but very strong and can potentially change the game your company plays.
Alas, as a manufacturer of SaaS, it looks logical to you to look at other manufacturers of SaaS or Legacy software for inspiration; to simulate your operations, marketing, etc. This is especially so if your top managers came from software development, or your company produces software products in addition to your SaaS product. The best thing you can do is stop looking towards the manufacturers of installed software or other SaaS, and start looking at service companies such as auditors, PSF (professional services), recruitment firms, etc.
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The main advantage that SaaS manufacturers have is constant contact with customers. They can always find a way to please users, or at least offer them an excellent service; sometimes the results do not make customers happy, but the service is required to do so.
SaaS manufacturers have constant contact with users directly through their product. And this is one of the main differences between the installed software from SaaS; what makes them look like service companies. Using the multi-tenant business architecture, real SaaS applications not only provide manufacturers with a transparent view of how users use their product, but also enable them to aggregate all information on the fly, and see trends. This is a very powerful thing, inaccessible to manufacturers who think in the paradigm of outdated software.
This improved transparency gives SaaS manufacturers the ability to proactively solve problems as they arrive, to see where users spend the most time, and to focus on these areas in their development plan. The strategic development plan is broken down into tactical pivot points, and this process leads to continuous product improvement, the main added value of SaaS products over outdated software in the eyes of customers.
Continuous improvement of the product is a considerable part of the SaaS business proposal for users. More users do not have to wait for the next version of the product, they do not need to install the next release in order to get the necessary function. Alas, many SaaS manufacturers continue the tradition of conventional software, including the lack of Continuous Improvement, and as a result, lose some of their success.
Shift the worldview in the direction of service and conduct constant improvements in the product is necessary for manufacturers of SaaS, and they should be ready for this. Without attempting to dictate the product development methodology, you must be flexible and agile; to be able not only to react but also to anticipate something in its constant improvement. The ability to maintain such flexibility, the ability to implement changes, repair and add functionality on the fly - this is what is required of service companies, and this will require the support of flexibility in business and product. Understanding the necessary flexibility in the early stages of architectural development will allow you to design a system that will serve the needs of a service-centered SaaS.
In outdated software, bug fixes and improvements will be collected in one group, and this group will be delivered to the client in the form of a “release”. This makes sense for software where the manufacturer does not have complete control over the product. But why are SaaS manufacturers also called “releases” what they control? This is a relic of outdated thinking, and this is one of the things that you can change on the way to a service-oriented company.
If you think like a service company, the names of the versions are not even discussed, it becomes an eternal controversial issue. Service companies do not have versions of their service. When something needs to be fixed, the service company fixes it. They are not waiting for the next release or version. Or, for example, if a law changes, the standard support code is simply rewritten. If a new form is issued, the service provider simply adds it to the system. So SaaS manufacturers must think.
While Continuous Improvement ensures that customers use the latest advances in your thoughts, the same approach gives manufacturers a lot. Amazing things are possible if you think not as software vendors, but as a service organization. However, by allowing customers to not use old interfaces, but using the latest solutions, you can better manage customer expectations.
Remember that users do not like change. When there are large "releases" or "versions", they are often accompanied by disruptive changes in the basic elements of the user interface. Smaller, but more frequent changes in the system are more suitable for users. But simply getting rid of the "monolithic changes" is not enough. Just as the thinking of the SaaS manufacturer should move, so must the thinking of the users.
Changing the SaaS product vision for users is the question of why they buy it. So, knowing that buyers do not like change, one of the goals of service-oriented thinking is to manage customer expectations. One of the pitfalls that software vendors have lured people into is the ability to constantly use the same version of the product, without the need for an upgrade. Resistance to upgrades often comes from avoiding change. For SaaS manufacturers, this is a fundamental conflict with their value proposition to customers (value proposition).
A very simple way to illustrate this point is to hide all version references from interfaces. Especially the "version or release number." This pierces the veil of the service and creates the wrong impression of the user. One of the core values ​​of SaaS for the customer is that they should not know anything about the technologies on which the product is based. But, anyway, some SaaS manufacturers even on the login pages give the exact version number.
If you keep in mind that you are providing a service, then remove all the numbering, and then the expectation that the user will stop at some level of development of their needs will also disappear. You cannot use the old version of the one that has no versions, right?
The best analogy is this. If you produce programs for reporting to the state, and customers require switching to the 2003 version of the tax form, then you should tell them to use the latest version, or find another product. No average. You, with all the love, want to keep the user, but they cannot use the outdated form. This is unacceptable.
Managing customers' expectations and serving them in the spirit of continuous improvement are two ways to shift their thinking towards service. Although there are many ways to help users, there are as many ways to help you, SaaS manufacturers, increase profits and protect your position in the market.
Shifting thinking from old software towards the service is quite simple, but it can have huge advantages. Removing the "versions" is just one of the consequences. It is also important to help change the thinking of users.
Thinking as a service company, the goal of SaaS manufacturers is to remind users that they are not just “renting software”, but getting valuable service. When you do this, you place accents correctly. This part of changing the mindset of users is critical, because if they think they are just renting, they underestimate the service. They can compare with “other products”, think that your service is not important, start comparing price, ROI, TCO, etc. They can make a comparison tab and evaluate them by parameters, since software always has competitors.
But removing the emphasis from "software", you gradually change the focus of users' perception from product to service. Service, as long as it has a price, is fully determined by the value it gives; benefits. The true value of the service is often difficult to determine, it is much more difficult to calculate the TSO from the use of the service. Counting ROI is even worse.
Putting emphasis on the service, you, as a SaaS manufacturer, move away from the commoditization trap that many other software vendors have fallen into. In the early days of SaaS, in an attempt to attract attention, manufacturers gave their service for free. This created a current dilemma for manufacturers, where SaaS is perceived not as a delivery method, but as a cheap way. Each SaaS product feels the impact of commoditization, and this will continue. By focusing on the service, and emphasizing that SaaS is a Value Delivery Model, not a Software Delivery Model, SaaS manufacturers can avoid competition, and become a truly high-quality service.
By focusing your clients on the fact that you provide a service, not software, you remind them that your company is an expert in your field, that you can rely on occasion. With you, users do not “rent software”, but subscribe to expert assistance delivered via the network. This is a completely undermining change in worldview, and this is what SaaS manufacturers need to do.
The author is Lincoln Murphy, Sixteen Ventures .
Translation - Alexey Postnikov, Comindwork .
By shifting your thinking this way, your result will be better suited to user expectations, increase revenue, and allow you to better protect your position in the market. The shift is small, but very strong and can potentially change the game your company plays.
Service companies are not independent developers (ISV)
Alas, as a manufacturer of SaaS, it looks logical to you to look at other manufacturers of SaaS or Legacy software for inspiration; to simulate your operations, marketing, etc. This is especially so if your top managers came from software development, or your company produces software products in addition to your SaaS product. The best thing you can do is stop looking towards the manufacturers of installed software or other SaaS, and start looking at service companies such as auditors, PSF (professional services), recruitment firms, etc.
')
The main advantage that SaaS manufacturers have is constant contact with customers. They can always find a way to please users, or at least offer them an excellent service; sometimes the results do not make customers happy, but the service is required to do so.
SaaS manufacturers have constant contact with users directly through their product. And this is one of the main differences between the installed software from SaaS; what makes them look like service companies. Using the multi-tenant business architecture, real SaaS applications not only provide manufacturers with a transparent view of how users use their product, but also enable them to aggregate all information on the fly, and see trends. This is a very powerful thing, inaccessible to manufacturers who think in the paradigm of outdated software.
This improved transparency gives SaaS manufacturers the ability to proactively solve problems as they arrive, to see where users spend the most time, and to focus on these areas in their development plan. The strategic development plan is broken down into tactical pivot points, and this process leads to continuous product improvement, the main added value of SaaS products over outdated software in the eyes of customers.
Continuous improvement
Continuous improvement of the product is a considerable part of the SaaS business proposal for users. More users do not have to wait for the next version of the product, they do not need to install the next release in order to get the necessary function. Alas, many SaaS manufacturers continue the tradition of conventional software, including the lack of Continuous Improvement, and as a result, lose some of their success.
Shift the worldview in the direction of service and conduct constant improvements in the product is necessary for manufacturers of SaaS, and they should be ready for this. Without attempting to dictate the product development methodology, you must be flexible and agile; to be able not only to react but also to anticipate something in its constant improvement. The ability to maintain such flexibility, the ability to implement changes, repair and add functionality on the fly - this is what is required of service companies, and this will require the support of flexibility in business and product. Understanding the necessary flexibility in the early stages of architectural development will allow you to design a system that will serve the needs of a service-centered SaaS.
In outdated software, bug fixes and improvements will be collected in one group, and this group will be delivered to the client in the form of a “release”. This makes sense for software where the manufacturer does not have complete control over the product. But why are SaaS manufacturers also called “releases” what they control? This is a relic of outdated thinking, and this is one of the things that you can change on the way to a service-oriented company.
If you think like a service company, the names of the versions are not even discussed, it becomes an eternal controversial issue. Service companies do not have versions of their service. When something needs to be fixed, the service company fixes it. They are not waiting for the next release or version. Or, for example, if a law changes, the standard support code is simply rewritten. If a new form is issued, the service provider simply adds it to the system. So SaaS manufacturers must think.
While Continuous Improvement ensures that customers use the latest advances in your thoughts, the same approach gives manufacturers a lot. Amazing things are possible if you think not as software vendors, but as a service organization. However, by allowing customers to not use old interfaces, but using the latest solutions, you can better manage customer expectations.
Remember that users do not like change. When there are large "releases" or "versions", they are often accompanied by disruptive changes in the basic elements of the user interface. Smaller, but more frequent changes in the system are more suitable for users. But simply getting rid of the "monolithic changes" is not enough. Just as the thinking of the SaaS manufacturer should move, so must the thinking of the users.
Shift of the universe: the service has no versions and releases
Changing the SaaS product vision for users is the question of why they buy it. So, knowing that buyers do not like change, one of the goals of service-oriented thinking is to manage customer expectations. One of the pitfalls that software vendors have lured people into is the ability to constantly use the same version of the product, without the need for an upgrade. Resistance to upgrades often comes from avoiding change. For SaaS manufacturers, this is a fundamental conflict with their value proposition to customers (value proposition).
A very simple way to illustrate this point is to hide all version references from interfaces. Especially the "version or release number." This pierces the veil of the service and creates the wrong impression of the user. One of the core values ​​of SaaS for the customer is that they should not know anything about the technologies on which the product is based. But, anyway, some SaaS manufacturers even on the login pages give the exact version number.
If you keep in mind that you are providing a service, then remove all the numbering, and then the expectation that the user will stop at some level of development of their needs will also disappear. You cannot use the old version of the one that has no versions, right?
The best analogy is this. If you produce programs for reporting to the state, and customers require switching to the 2003 version of the tax form, then you should tell them to use the latest version, or find another product. No average. You, with all the love, want to keep the user, but they cannot use the outdated form. This is unacceptable.
Managing customers' expectations and serving them in the spirit of continuous improvement are two ways to shift their thinking towards service. Although there are many ways to help users, there are as many ways to help you, SaaS manufacturers, increase profits and protect your position in the market.
We shift the thinking of users to increase profits
Shifting thinking from old software towards the service is quite simple, but it can have huge advantages. Removing the "versions" is just one of the consequences. It is also important to help change the thinking of users.
Thinking as a service company, the goal of SaaS manufacturers is to remind users that they are not just “renting software”, but getting valuable service. When you do this, you place accents correctly. This part of changing the mindset of users is critical, because if they think they are just renting, they underestimate the service. They can compare with “other products”, think that your service is not important, start comparing price, ROI, TCO, etc. They can make a comparison tab and evaluate them by parameters, since software always has competitors.
But removing the emphasis from "software", you gradually change the focus of users' perception from product to service. Service, as long as it has a price, is fully determined by the value it gives; benefits. The true value of the service is often difficult to determine, it is much more difficult to calculate the TSO from the use of the service. Counting ROI is even worse.
Putting emphasis on the service, you, as a SaaS manufacturer, move away from the commoditization trap that many other software vendors have fallen into. In the early days of SaaS, in an attempt to attract attention, manufacturers gave their service for free. This created a current dilemma for manufacturers, where SaaS is perceived not as a delivery method, but as a cheap way. Each SaaS product feels the impact of commoditization, and this will continue. By focusing on the service, and emphasizing that SaaS is a Value Delivery Model, not a Software Delivery Model, SaaS manufacturers can avoid competition, and become a truly high-quality service.
By focusing your clients on the fact that you provide a service, not software, you remind them that your company is an expert in your field, that you can rely on occasion. With you, users do not “rent software”, but subscribe to expert assistance delivered via the network. This is a completely undermining change in worldview, and this is what SaaS manufacturers need to do.
The author is Lincoln Murphy, Sixteen Ventures .
Translation - Alexey Postnikov, Comindwork .
Source: https://habr.com/ru/post/61926/
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