In a recent blog post, we shared how the Zylo team wanted to hear directly from other CEOs and CFOs think about SaaS in their own organizations. We created a series of blog posts where we detail interviews from 5 veteran software executives and explore what they believe the future of cloud software will hold.
In this week’s post, we’ll highlight Leila Kirske, CFO of Simply Measured, and will share what she believes the future of the subscription economy will look like. Miss last week’s recap? Check out what Scott Roth, CEO of Jama Software had to say.
How Simply Measured Sees Itself In The SaaS Space
Leila explained that Simply Measured sells a SaaS solution in the marketing space, and more specifically in the social media marketplace, which tends to be a notoriously difficult section of the market. She explained the company positions itself as driving higher value outcomes for Simply Measured customers. In the world of SaaS, each company really needs to identify, “What’s the point of their solution? Will it provide better outcomes, will it provide a return on investment, or is it simply more of a time saver in terms of value?”
“SaaS and subscription-based services is one of our largest categories of expense,” Leila explained. “And what makes it uniquely challenging is that it is a category of expenses that is comprised of a ton of individual contracts. Across our company, we have a bit over 90 applications in place. We have an ongoing project to reduce the number of solutions in our environment. At one point, we had over 100 applications and were spending well over $1M on those recurring costs, but for each solution we let go, there was a request for another. Several tools solved the same problem and application owners were unknown. It was spinning out of control.”
Leila also explained that in the world of subscription-based services and SaaS products, individuals or internal business units can purchase software solutions and tools without participating in an IT evaluation process. “It has really become a decentralized procurement function and the tools that are purchased may or may not fit with other tools that are already in place. Specifically, in our early years, we implemented a core CRM solution that was tailored and customized to specific needs and without looking to future scalability. Subsequently, the finance team purchased a subscription management solution, the Support team purchased their own solution, and the Marketing team purchased their own solution; each dependent on compatibility with, and an integration with, that core CRM solution. SaaS is so easy to buy and to implement that by the time you find that you may not be able to use a specific solution as intended, you’re already in the middle of implementation and have wasted precious budget.”
Simply Measured As A SaaS Buyer
At Simply Measured, Leila and her team are have modified the SaaS procurement process by having them vet the solution with IT before purchasing. As an emerging, fast growing company, Leila explained, “We’re all entrepreneurial and rebellious. We don’t want IT telling us what to do, so we got a lot of push back. In the early stages of a company, people just need to get stuff done. At Simply Measured, we’ve slowly gotten people to understand that now there is a lot in our environment, not all of it is core to our business and it currently consumes a significant amount of financial resources. At its best, a SaaS-based technology environment allows you to select the optimum individual tool for your environment. However, what challenges that belief is that each of these solutions do not consistently play nicely with each other and may require costly connectors. We need IT to help us understand the desired target environment and ensure that as we add solutions that are thoughtful.”
What is The Future of the Subscription Economy?
When it comes to the future of SaaS and how it will change, Leila recently did some philosophizing. She shared her thought process:
“This [SaaS] model works for some software solutions. It works incredibly well for those solutions you are going to use anyways like CRM, ERP and marketing solutions that are really sticky. But after that, SaaS companies have to fight for every dollar at renewal and ensure customer success is at the center. With the subscription model, SaaS companies need to make sure their customers fall in love with the solution(s) and company at every renewal or else they experience high levels of churn. They have to show real value. SaaS companies need to determine their true value in order to compete with others in the market.”
“At Simply Measured and at most SaaS companies, we’re fighting for every dollar, which is also starting to affect our ability to sell to others because they also have the same issue of too many applications. We all need to ask how to build brand awareness and learn to demonstrate tangible value.”