The data contained in Techaisle’s recent detailed survey, US SMB & Midmarket SaaS Adoption Trends, covering over 2500 responses, with a margin of error of +/- 1.94% at 95% confidence level, paints a fascinating picture of the sea change that is occurring within SMBs, and which is reflected in SaaS adoption patterns.
Techaisle was the first to highlight and has very well documented the role of SaaS as a deepening force within SMBs. Latest survey builds on the argument and shows that Customer-focused SaaS applications are at the top of the SMB SaaS list with 76% of US SMBs planning to adopt one or more customer cloud applications in the next one year. This is line with the four pillars of midmarket digital transformation identified by Techaisle. Customer intimacy is one of the pillars.
The vision of customer-centric business has long been beyond most organizations’ operational capabilities (hence, customer segments rather than customer activities), but with increased data/intelligence and the vastly lower cost of processing, storage and applications afforded by cloud, it is becoming more attainable.
Similarly, while large organizations have had ERP systems for years, midmarket firms have struggled with the high cost of software and (especially) the extensive ranks of IT staffers needed to configure and support monolithic ERP suites. With lighter-weight SaaS options, coupled with core IT support that is part of the ‘as-a-Service’ offering, ERP is meaningfully-available to SMBs – meaning that they have the option of using tools that greatly enhance the sophistication of management information and fact-based decisions.
When comparing current & planned adoption we find that current adoption side of the ledger paints a picture of SaaS technology as a means of supporting current processes. The top application area is finance, followed by collaboration: essentially, the first wave of adoption substitutes SaaS for on-premise automation of these functions. It is interesting to note that Finance-focused SaaS solutions – Accounting, Invoicing, eSignatures, payments, etc. – have been the most adopted applications. In some ways these form the foundation business solutions. And have replaced eFaxes, external accountants and others, allowing accounting solutions to be used by multiple users within the same organization in a collaborative environment thus enabling business performance reviews very quickly.
Collaboration and customer-focused SaaS solutions are the 2nd and 3rd most adopted applications. This compares well with past decade SMBs which used on-premise file-servers for file sharing and CRM solutions that took a minimum of one year to implement. In some ways it can also be argued that combining productivity-focused and collaboration-focused would be the top solution. After all, today’s productivity solutions are built for collaboration.
On planned side of the ledger, data shows SMB users recognizing that SaaS offers options for changing the ways that their businesses work. On the future adoption pattern, data finds that customer-focused and ERP solutions will take center stage in line with business priorities of customer retention, product and process management, business growth and managing inventory and supply chain.
When breaking down the data by small (1-99 employees) and midmarket (100-999 employees) businesses we see some key differences. Collaboration-focused as well as finance-focused SaaS solutions are the top two highest adopted and also appear in the top two planned to be adopted within small businesses. Customer-focused and HR including payroll are close second for planned adoption. Linking these back to the business issues and need for basic foundational SaaS solutions it is not surprising that they are among the top. What is surprising though is that productivity-focused SaaS solutions such as Office 365, G-Suite are fifth in ranking within small businesses. This is because of two fundamental reasons – first, both of these apps are not very easy to adapt and migrate to from current solutions and secondly, most very small businesses prefer to use their non-company-specific-domain name email addresses.
Midmarket businesses show a completely different adoption trend – the collaboration and productivity oriented SaaS solutions are at the top of the adoption agenda.
Techaisle urges SaaS users to look for ways to reorient rather than re-automate their processes, and urges SaaS marketers to stress the capacity for better (customer-focused, sophisticated) approaches to business management as a key outcome of interconnected SaaS applications as an agile automation platform.
SMB Data You Can Rely On | Analysis You Can Act Upon