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3 success factors for pay-per-use SaaS

MichaelGarrett

HP20140315586.jpgIn my last blog post (3 signs you’re ready to graduate from basic SaaS), I wrote about how new software consumption models like pay-per-use and outcome-based services are changing the way enterprises deliver IT services. Such models give you far more flexibility than your garden-variety software as a service (SaaS) offering.

 

But there’s a certain level of maturity you have to have to make the most of these models. This is a business value decision. You want to be able to look across your organisation and say, “At X number of users per month, this is really going to help us.” But if you don’t have financial transparency into what your services cost, then you won’t know if this model will make the impact you want at the scale you’ve got. Part of our job in HP Professional Services is to evaluate your situation and advise you on whether you have the requisite maturity. (You can read more of our advice on how IT can deliver business value in our new ebook.) Here are three key factors for success.

 

The 3 prerequisites for success

Here is what we recommend to customers so that they can be successful with a pay-per-use consumption model:

 

1. Have the right KPIs in place: What are you trying to achieve, and what KPIs matter? Is it a purely cost-based approach where you’re looking at low cost for everything? Or are there other business priorities, such as performance, efficiency, or quality? You really need to understand the business priority you’re trying to meet. And to do that you need a certain level of process maturity. A pay-per-use model might decrease your cost, but if you’re not meeting your other agreements, maybe you’d get better value out of a different software consumption model.

 

2. Understand what your services cost: Financial transparency is an essential capability for success. You need to have your service catalog in place, and you need to understand what your cost per service is. In order to understand if pay-per-use is actually saving you money, you first have to understand your baseline costs.

 

3. Leverage tools that give you visibility into KPIs across your organisation: Say your KPI is to meet a certain number of incident resolutions and you’re trying to do that across multiple suppliers (including your own in-house IT). A tool like the HP IT Executive Scorecard gives you the capability to look at KPIs across your entire IT organisation. You want to get to the point where you can make apples-to-apples comparisons for specific KPIs across multiple suppliers.

 

Now, not many enterprises have all three success factors in place. But this is what you should aspire to. When you are able to fulfill these three requirements, then you really are able to use pay-per-use consumption models to your advantage. You can leverage them in a much more powerful way and at a much wider scale. And you’re making decisions based on what will deliver the greatest business value.

 

 

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About the Author

MichaelGarrett

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