Who's Using SaaS—and Why?

Steve Wise
By Steve Wise | March 2, 2017
Vice President of Statistical Methods
What did you do online today? Maybe you:
  • balanced your checkbook;
  • updated your Netflix queue; or
  • ordered pizza to pick up on the way home.
If you did, you did it in a cloud-based application — or Software as a Service (SaaS).
The adoption of SaaS is growing by leaps and bounds because SaaS makes our lives easier. And it’s not just easier, more cost-effective, and efficient for users but for businesses, too.
The benefits of SaaS
The benefits of SaaS to users are generally well known. Software that is purpose-built for the cloud is also designed with users in mind; it’s easy to learn and use, delivers fast performance, and enables users to focus on their work instead of the software.

Businesses can get numerous benefits such as:
  • Inexpensive startup: Because the service provider handles all the infrastructure — servers, software licenses, and the like — there are typically few costs (besides the subscription) to get started.
  • Rapid return on investment: Because the business doesn’t have to worry about installation and licensing, returns on investment are seen very quickly. Users just log on, and the software is there, ready for use.
  • Near-zero maintenance: One of the greatest benefits of SaaS is that the software is always up to date with the latest security patches and software versions. The vendor handles most of the administration and must meet agreed-on service-level agreements.
  • Scalability: As business needs change, the scalability of SaaS solutions allows them to change with the company: The company simply adjusts its subscription according to its needs.
  • Work from anywhere: SaaS solutions are web-based, so workers can get things done on any device anywhere there’s an internet connection.
Who’s using SaaS?
A Forrester Research report predicts that nearly half of respondents (from all  industry categories) plan to use SaaS to complement or replace applications in the following categories: 
  • Commerce
  • Enterprise resource planning (ERP)
  • Finance and accounting
  • Human resources (HR)
  • Procurement
  • Supply chain management (SCM)
The study highlights the increasing adoption of SaaS as the technology has moved from an “emerging technology” to a fundamental business tool with expanding benefits. The report also reveals that for manufacturers in particular, SaaS isn’t just for hosting basic software applications such as word processing and document management. Rather, it’s a way to fundamentally change the way businesses operate.
Not just for the back office
SaaS applications support manufacturing workers at every level, from business operations to more strategic planning and direction.
According to Gartner, SaaS deployments are now mission critical the world over, with more than 40% of respondents citing cost reduction as the principal driver for adoption. And Forbes reports that manufacturers in industries that stress accuracy and short product life cycles — such as Consumer Electronics, Food, and Beverage — are applying SaaS to highly strategic and business-critical functions primarily because SaaS applications are easier and faster to roll out and customize than their on-premises counterparts. These manufacturers are using SaaS to: 
  • capture and apply business intelligence company-wide;
  • collaborate through supplier portals and quality management dashboards and workflows;
  • accelerate new product development and introduction; and
  • hone ERP strategies to gain efficiencies in material planning and supplier management as well as reduce logistics costs.
The Forbes article noted, “Using cloud-based systems to streamline key areas of their business, manufacturers are freeing up more time to invest in new products and selling more.”
The concept of sharing a central computer resource has been around since the 1960s. But today’s mature technology, scalability, ability to handle complex and high-volume processing functions, emphasis on security and availability, and ease of use are making SaaS near-ubiquitous.

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