Survey shows that SaaS can save you money

Earlier in the year we ran a survey on RMM Software, this is the software IT Company’s/MSP’s use to run their technical operations. What emerged were a few very revealing results on the software itself:

• Only 4% report they use the full potential of the system they buy.
• 50% said it took a month or longer to setup and more worryingly 20% said it took in excess of 6 months to setup.
• 53% stated they pay for areas of the system they don’t use.

Frankly, it’s not a surprise that so little use software to its full potential.  I’m guessing most people use approximately 20% of features. Could this mean that software vendors ‘over-engineer’ and then look to ‘recover’ and ‘profit’ on their efforts? I guess so, because our own industry has even coined the term ‘shelf-ware’, a term for unused software, features & licenses.

Anyway, it got me thinking… I started to consider software in relation to ‘Lean’… In ‘lean’ there are 7 wastes (‘mudas’) defined and I’ve had a bash at adapting them to fit the software business:

• Over-Production – Creating features which aren’t used by the vast majority of users.  In lean, this is by far the worst waste as it causes & exacerbates other wastes.
• Unnecessary Transportation – I guess this could apply to on-premise software where you’ve to box it, ship it distribution, ship it to users who then takes it out the box and installs it.  I think it applies less so to SaaS producers.
• Inventory – In terms of software production this could be pieces of code which aren’t used in the current build or are work in progress (not yet complete).
• Defects – Self-explanatory – shipping code which doesn’t work as it should.
• Over Processing – any waste in producing code.
• Motion – any movement between parts of production process – I reckon this equates to ‘context switching’ – start-up overhead associated when coding a new piece of functionality.
• Waiting around – time between completing a feature and users using it.

Clearly, in the survey above, a large percentage of RMM software users are saying they generally believe RMM software is over-produced (over-engineered) and they either never or very slowly get round to using it.

I guess what this says is that IT Companies who buy this particular type of software want a producer who doesn’t over-engineer their product, who delivers via SaaS, who provide a method of paying only for relevant bits of software on a basis which is closely tied to a return on purchase, who uses agile development to deliver beneficial features, and who releases their new features with useful education, motivation & collateral for their user base to profit from.  Sounds like a plan?  It does to us.

And back to the survey, one staggering fact on demand for IT Support on a fixed cost basis – 51% said it’s difficult to show value from managed services, ie: selling these arrangements.

Back to ‘Lean’.  In lean, if your customer doesn’t value it, you stop doing it.  End of debate! You find out what your customer values then spend as close to 100% of your time doing only what your customer values. Simple as that!

I’ve got a hunch that consumers of IT services do value work getting done, i.e.:  IT help – they value how quickly, accurately and efficiently an IT company does this work and they value communication and the relationship an IT company has with them.

Now if you could clearly package, price and run your arrangements to reflect the above – I hope selling Managed IT Support Services would be less of a problem.