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With disruptive technologies and evolving customer demands, many companies are looking to reinvent their organization in the digital era through digital transformation strategies. Adopting new technologies is an enticing way to dramatically improve business outcomes. But studies have shown that 70% of digital transformation initiatives fail to reach their intended goals

For many companies, however, leveraging B2B Software-as-a-Service (SaaS) solutions could be the driving force behind a successful digital transformation. That’s because there’s been a tremendous growth of SaaS solutions in recent years ranging from marketing technology (martech) to digital experience platforms and marketing analytics tools. 

So what exactly is B2B SaaS, why is it crucial for digital transformation and how can companies better leverage B2B SaaS solutions?

What the B2B SaaS Space Will Look Like in 2020

B2B SaaS is a delivery model that provides cloud-based software to companies for a recurring subscription. “B2B SaaS helps enterprise companies eliminate up-front IT costs and operational responsibilities, and gain access to the latest technologies,” explained Jamie Bertasi, COO & CCO of Totango. That’s because companies don’t need to worry about setting up IT infrastructure or maintaining the software, so adopting new software is much faster than in the past.

“SaaS has become a disruptive force in almost every industry and has fundamentally impacted all aspects of the way a business operates and delivers value to customers,” said Karl Rumelhart, chief product officer and EVP of engineering at Gainsight. Since SaaS companies no longer need on-premises infrastructure, there’s been an explosion in the number of solutions available today and best-of-breed options in nearly every industry. Companies, therefore, can pick and choose a multitude of niche SaaS solutions to meet highly specific business needs.

Related Article: SaaS vs. Cloud: Comparing Apples and Oranges

Why B2B SaaS Drives Successful Digital Transformation

There’s been a shift in control over software solutions from vendors to customers. Rumelhart said, “there are many SaaS solutions to choose from and customers have the ability to easily switch vendors by simply unsubscribing.” In the past, however, vendor lock-in was much greater because software migrations were much more challenging and costly. The ability to switch vendors more easily means there’s more power placed in the company’s hands and more pressure for SaaS vendors to deliver high-quality services.

Bertasia agreed that there’s much greater flexibility with today’s B2B SaaS solutions. She added, “[B2B SaaS] provides a much more flexible technological infrastructure than a static business model and forges meaningful connections with customers in ways that were once unattainable.” This means businesses can rapidly adapt to customer feedback with minimal upfront investment to create engaging digital experiences.

Oftentimes, there’s also improved collaboration across the organization. “For the business side of enterprises — including the areas of marketing, sales and customer success — B2B SaaS allows for the elimination of department silos and emphasizes collaboration throughout an entire company,” explained Bertasi. That’s because individual departments can choose the solutions that fit their needs best, while most SaaS applications can easily be integrated into a seamless overall employee experience.

How Companies Can Better Leverage B2B SaaS Technology

“Many enterprises are turning a corner and focusing more efforts on putting the customer at the center of their business,” Bertasi stated, “but achieving business success today is impossible without SaaS technology that can enable customer centeredness at enterprise scale.” Using SaaS, therefore, brands can more efficiently automate internal functions to become a more customer-centric organization. If they choose the right SaaS solutions, that is.

There’s an overwhelming breadth of options available today, so it’s challenging for most companies to choose the best SaaS solutions for their digital transformation strategy. Rumelhart believes organizations that center “their digital transformation efforts on focused KPIs, such as the customer experience, tend to outpace the competition.” It’s much easier to get organization-wide buy-in for software that’s supported by measurable metrics and has the potential for outsized positive business outcomes.

More specifically, Rumelhart suggested, “solutions that leverage data and digital tools to orchestrate customer journeys, measure customer health and coordinate internal teams to deliver value for customers.” In general, focusing on these areas can drive the most business impact during digital transformation projects.

Bertasi agrees that the focus needs to be on SaaS solutions that transform the customer experience. “While enterprises can ‘digitally transform’ without paying attention to customer success,” Bertasi said, “they will ultimately be less successful when their customers leave them for better experiences.” She says the customer needs to be at the center of every interaction and business decision.

In the end, “digital transformation, once considered a lofty goal of forward-thinking organizations, is now a business imperative,” Rumelhart said. If businesses don’t leverage customer data and digital solutions to improve the digital experiences they provide, then they’ll quickly fall behind. B2B SaaS, therefore, is the key to digital transformation.