During IBM’s Connect user conference in Orlando this week, the company released the results of its latest global user survey regarding adoption and use of Cloud-based software-as-a-service (SaaS). IBM classed each of the 879 IT and LOB survey participants into one of three enterprise user profiles: Pacesetters (self-characterized as having relatively high rate and pace of SaaS adoption), Challengers (self-characterized as having significant, but not widespread adoption and use of SaaS), and Chasers (self-characterized as having relatively low rates and paces of SaaS adoption and use).
While IBM has begun using the survey results overall to help position and promote SaaS as enabling powerful competitive advantages, Saugatuck sees some key aspects of the survey data as more important and as critical elements in understanding why some firms are more advanced and successful users of SaaS (and other Cloud-based IT).
The key aspects noted: the most aggressive adopters and beneficiaries of SaaS / Cloud share some important characteristics regarding the function and relationship of IT and LOB leaders. IBM’s data and findings complement and support a position that Saugatuck has long espoused, to wit: the role(s) and attitudes/approaches of IT leaders and groups would change as SaaS / Cloud becomes more mainstream, and as it becomes more important to business success.
IT as a group or as an enterprise function has typically been thought of as an obstacle or hindrance regarding SaaS / Cloud adoption. But what Saugatuck’s research has been indicating since 2012, and what IBM’s own research now supports, is that perception (or reality) is shifting more, and rapidly, toward IT as leader and owner of SaaS Cloud initiatives, working more closely with LOB leadership to plan, organize, and increasingly even control, SaaS / Cloud deployment and use as it would any standard enterprise other form of IT. Key findings from IBM’s survey include the following regarding the most aggressive and successful enterprises vis-à-vis SaaS adoption and use:
- 70 percent of the “Pacesetters” group overall indicate that SaaS strengthens the IT and LOB relationship;
- 71 percent of the “Pacesetters” indicate a combination of strong IT and LOB collaboration on SaaS selection and deployment;
- 72 percent of Pacesetter-employed IT respondents view LOB as strategic partner for SaaS;
- 66 percent of Pacesetter LOB leaders view IT as a strategic partner for SaaS;
- And 71 percent of Pacesetters overall report having a “Mature & Cohesive,” enterprise-wide SaaS strategy.
It’s clear that not only are the perceptions and adoption of SaaS as regards enterprise business and IT competitiveness changing, and improving, but that the relationships and interaction between IT and LOB leaders within those enterprises are being affected as well.
Why is it Happening?
Saugatuck sees several reasons behind this shift, or more accurately, series of shifts, in the IT-LOB SaaS / Cloud dynamic.
First, SaaS/Cloud today offers mainstream-style awareness and comfort for both camps. For leading-edge, early-adopter-style enterprises, SaaS began entering the IT and business mainstream in 2008-2009 (562RA, SaaS in Finance: Mainstream, Growing, and Poised for Growth, 12Feb2009; 460SSR, Enterprise Ready, or Not SaaS Enters the Mainstream, 28July2008). IT adoption cycles throughout the past 30 years regularly witness a time lag of between 3 and 6 years from when leading-edge firms adopt, and when the early majority and mid-majority firms adopt and SaaS is right on that timeline.
As a result of this “mainstreaming,” we have seen rapidly increasing recognition by IT leaders that SaaS / Cloud are not threats of IT-LOB disengagement/disassociation, but instead are resources that enable greater business ability and greater value of the IT organization/function to the business. This is supported by a plethora of proven patterns across all aspects of business, large and small, regardless of LOB or function, but most significantly in the expansion (not shift) from so-called “systems of engagement” to “systems of record.”
At the same time, we see an increasing shift among LOB leadership toward involving IT organizations and leadership in SaaS/Cloud acquisition. The increasing presence, increasing interaction / integration, and increasing costs of managing SaaS / Cloud are helping LOB leaders see that circumventing IT (and traditional procurement) may not be practical or advisable and indeed, can often hinder business productivity, performance and profitability. This has helped lead to more broadly-increased awareness of SaaS / Cloud presence, utility, and risks, which is shifting IT and LOB leaders toward more planning which requires, and rewards, greater involvement by all.
Click here to read the market impact.
This blog was originally published at Saugatuck's Lens360 blog on January 30, 2014. Published with permission.