by Andre Bourque

How SaaS abandonment is killing your enterprise bottom line

May 31, 2017
Cloud ComputingSaaS

Organizations’ enterprise software infrastructure is so fragmented, business intelligence suffers severely. rn

Ten years ago every company bought enterprise software, often in abundance. Today, 96% of organizations have now shelved some or all of it. While buying software is daunting, it is essential for competing in increasingly sophisticated industries.

The right software stack can give companies a competitive advantage, and because it is so much easier to buy today, brands are increasingly open to buying from more and more vendors.

Here is the summary of how the landscape has changed in the last ten years according to reports from Siftery:

  • 20x increase in software vendors
  • 10x the number of software products purchased by companies
  • 12x the number of purchasing agents inside companies
  • 4x increase in budgets for software solutions

The enterprise world tends to start with simple solutions and build complex ones, but the growth of resources and internal buyers has not kept pace with the growth of enterprise software vendors. The result is functionality overlap, poor user experience, and a flooded vendor market. 

Functionality overlap

Because each department within a company has a software budget, this has created a demand for a plurality of similar, but not exactly the same products. Businesses then have multiple systems that have some but not all of the same information. Without one ‘hub’ where all the data can be found, a company may have four or five competing file sharing systems, but no single one that can be trusted.

The result of enterprise software overload from the last ten years is digital workplaces that have become bigger, richer, more complex and difficult to navigate.

According to Ken McElrath, CEO of Skuid, a bespoke software solution, many companies think they should solve different problems with different apps, but this actually creates more organizational fragmentation. Even when a company works with the same vendor, they may wind up with a list of different products that do not play well together (Salesforce, Microsoft, SAP, Oracle, etc.). To create simple, truly useful apps, we need to bring all that data under one roof to create a 360-degree view of a customer. 

Flooded vendor market

In 2015, the worldwide enterprise applications market rose 3.4% to a record $193 billion in product revenues following a decade of sweeping transformation, according to Apps Run the World. This pace of change has fueled startups and encouraged incumbents to adopt new technologies, like the cloud and machine learning.

According to Gartner, by the end of this year, market demand for mobile app development services will grow at least five times faster than internal IT organizations’ capacity to deliver them. The firm forecasts mobile phone sales will reach 2.1 billion units by 2019, which will fuel demand for apps in the enterprise that meet the high performance and usability of consumer apps.

Gartner principal research analyst, Adrian Leow, said enterprises find it a challenge to rapidly develop, deploy and maintain mobile apps to meet increasing demand, as it is exceedingly difficult and costly to hire developers with good mobile skills. The solution to this is to find one software vendor that can be used with existing systems, sync with various tools already in place, and be agile enough to grow in tandem with the organization.

Poor user experience

The bottom line impact on poor user experience, deemed ‘SaaS Abandonment,’ can be drastic. The traditional utilitarian structure of enterprise apps often leaves users uninterested and easily distracted. When workers are used to seamless consumer apps, they have a hard time working with clunky and inefficient platforms.

“Employees have shown a profound ability to use consumer tools to discover and assess information, collaborate, network and carry out tasks in their personal lives. The tools they have at work should be on par with, if not leagues ahead of the consumer apps they can use outside of work,” explains McElrath.

Looking at SaaS Abandonment from a monetary perspective, companies gain an extra 240 hours of work per year from employees due to mobile working, the equivalent of $5,114 of extra work, according to TrackVia.

“For companies to truly thrive in the digital world, they need to be able to streamline data and processes,” Jeff Cole, Director of Experience Design at Skuid, recently shared with IT Business Net. “More accurate data will unveil valuable business insights, and even reveal revenue that you didn’t know you were missing. Custom-tailored software and processes will help employees get work done faster so they can service more customers better. And accomplishing this with no-code tools makes the task profoundly possible.”