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Why SaaS is the Only Option for the Modern Enterprise

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With over 20 years of procurement experience, Rajiv Gupta has seen his profession evolve drastically, across industries and across the globe.

Early in his career, Rajiv gained a strong foundation by managing many different industries and procurement responsibilities. From category management, production planning, zero-base budgeting, to cross management, in a short time, Rajiv gained the skills necessary to lead Procurement at the largest Terrycloth manufacturer in the world.

At a young age, he learned organizational management skills that helped him drive the vision of suppliers. By focusing on long-term production planning, he created mutual partnerships from transactional relations with suppliers.

Then, his responsibilities shifted to e-sourcing and e-procurement. However, in the early 2000s, internet penetration was very low in India. Consequently, he gained a newfound respect for technology when working with corporations that were not able to use e-options.

From mobile migration to artificial intelligence, in his career, Rajiv has aggressively driven transformation initiatives. As Procurement has grown into today’s modern practice, Rajiv has had a hand in an incredible number of procurement and sourcing initiatives.

Following Rajiv’s vast experience, he has one big prediction for IT Procurement: SaaS proliferation is inevitable.

New Professionals Buy Only SaaS Applications

“There is no other way than SaaS,” said Rajiv. “All the new professionals entering the workforce don’t know CDs. Enterprises will move to SaaS, apps, and digital because young professionals buy everything by subscription: it’s the only world they know.”

Rajiv has a point: the subscription e-commerce market has grown over 100% year over year for the past five years. Subscriptions exist for everything, from entertainment to groceries. The pay-as-you-go pricing model is innate to young professionals’ buying experience, in and out of the office.

Unsurprisingly, cloud services, which follow the subscription buying model, are predicted to grow 17.5% by the end of the year. Therefore, Rajiv does not question whether SaaS applications and other cloud-based services will grow: the only question is when this growth happens at your enterprise.

To shift organizational sentiment around cloud-based services, Rajiv recommends understanding and speaking the language of your business leaders. For example, years ago, when Rajiv was discussing AI with other procurement leaders, he used a simple story:

A child sees a four-tired vehicle. If you tell her it is a truck, she will think all four-tired vehicles are trucks. For the child to know the difference between a car and a truck, you must keep giving her more information.

AI works similarly. These computing engines take in and process data, one line at a time. Over time, the engines become smarter and faster. Finally, they can reach accurate conclusions over defined conditions faster and more accurately than ever before.

When a SaaS enthusiast discusses digital transformation and the benefits of cloud-based technology, start with concepts your leadership understands well, like cost savings, and move onto more technical benefits, like server upkeep.

Security Scares Still Stump Digital Transformation

Boiled down, SaaS adoption is similar to all other outsourced services. When companies outsource, security will always be a concern, with good reason. Many security breaches are caused by insecure third party access, whether people, hackers or technology.

However, Rajiv believes cloud-based solutions are simply safer: they house better encryption, better software, better risk management. SaaS and cloud vendors are able to pour more resources than ever into change management, servers, upkeep, support, etc.

Consequently, security concerns are most often just the fear of the unknown. When moving to a cloud-first technology stack, the unknown can seem massive. Not only has the technology itself changed, but also contracts, service-level agreements, benchmarks, and pricing structures have changed.

However, as mentioned previously, new professionals are likely to purchase SaaS subscriptions with or without Procurement teams. In fact, Zylo data suggests that up to 50% of SaaS applications are purchased without the knowledge of IT or Procurement.

Therefore, no matter the stage of their digital transformation, Procurement leaders must prepare their organization to take on more cloud-based software solutions. Today, procurement leaders must tackle the unknown.

Harness Your Cloud-Based Software Communities

Rajiv cannot overemphasize the power of networks. When tackling the growing category of cloud-based software, procurement leaders are starting from scratch. Without previous experience and benchmarks, moving to the cloud can feel like entering a black box.

However, Rajiv recommends leaning into the tech community. Savvy enterprise SaaS applications build communities of users, opening the door to cross-company and cross-industry benchmarks.

Additionally, with powerful digital feedback loops in place, SaaS buyers have a say in the direction of the products they are purchasing. When you purchase a SaaS subscription, you are partnering with a best-in-breed solution that will grow to fit your business’s needs.

In his many years of experience, Rajiv has seen huge opportunities for growth, thanks to technology. As professionals of all ages and experiences continue adopting cloud-based applications, IT Procurement should see this growing category as an opportunity for advancing their careers and their companies.

As Rajiv said, “There is no other way than SaaS and Digital Platforms.”