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CREATING A WINNING SAAS BUSINESS MODEL: ADDRESS THE WHY, WHAT EN HOW OF BUSINESS MODEL TRANSFORMATI

May 17, 2020

SaaS services create substantial benefits for users compared to traditional software and this results in a sharp increase in global spending in SaaS applications. The total global spending on SaaS applications is expected to increase by 15% per annum from 2019 to 2022. Gartner expects, that spending on SaaS applications will be about 45% of the total spending on software applications.

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Formulating and executing a SaaS business model transformation basically consists of addressing three questions: the Why, What and How :

  • To better understand the need and appropriate speed of business model transformation, it is important to have a good idea of how your customers and competitors are evolving, how fast the disruption will occur in the overall industry, and what are the economic parameters driving the change.
  • If the answer to the previous questions implies that a transformation is a condition for success, then the question arises which parts of the organization need to be transformed. Typical questions in this domain are: what are the key value drivers of the SaaS business model, which customer experience strategy is most appropriate, what is the most appropriate operating model to deliver the products and services and what is the financial-economic impact of the change?
  • Now that a clear decision has been made what to do to be successful, it is time to decide how to shape the transformation. The most important questions in this domain consist of balancing the risk and speed of the transformation and the way in which the resources and competences can be obtained to execute the business model. A clear choice has to be made between developing the competences internally versus through acquisitions/partnerships.

 

 

CREATING A WINNING SAAS BUSINESS MODEL: ADDRESS THE WHY, WHAT EN HOW OF BUSINESS MODEL TRANSFORMATI

There are several SaaS business models. The models address different pain points experienced by customers and the customer experience strategy should be adjusted accordingly. In order to optimize the enterprise value, it is of great importance to identify the key value drivers of the chosen business model and to have insight in which actions have the most effect. Choices made in this respect have consequences for the various operating model elements such as product development (e.g. from a waterfall to an agile way of delivering software with continuous release cycles) and changes in financial reporting.

To achieve a successful transformation to a SaaS business model, an organization must make a choice regarding the right speed of implementation. Should the entire organization be transformed or is it better to set up a new and separate entity for the new business model? Should the competences and resources be developed internally or should they be purchased. These choices drive the product and technology roadmap and the M&A strategy of the organization and ultimately the success of the transformation.

 

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WCREËREN VAN EEN WINNEND SAAS BUSINESS MODEL: ADRESSEER HET WAAROM, WAT EN HOE VAN BUSINESS MODEL TRANSFORMATIE 2Would you like to view JBR 's view on developing a strategic plan for a Saas business model transformation?

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Please do not hesitate to contact us if you would like to discuss how JBR can support you in your journey towards a successful business model transformation, need help with acquiring or financing digital competences as well as with optimizing value creation for your organization.