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How SaaS Levels the Playing Field for Mid-Sized Companies

Innovation is the engine that drives digital transformation and revenue. That's where brands should be focusing their strategic efforts. I just don't see any way retailers are going to further optimize conversion or average order value beyond what is possible with current technology and industry best practices. There is plenty of growth available for most companies leveraging those existing technologies and best practices but I don't see any emerging ideas with revolutionary potential that fit within the existing paradigm. The next big thing is going to be outside the box.

Why Innovation Matters

Innovation and digital transformation are en vogue across most industries today. And for good reason. Technology has progressed so far in the last decade yet so many brands and industries are still doing business with outdated modes of operation. Fax, anyone? I'm looking at you B2B distributor. Technology alone isn't the impetus for digital transformation. The confluence of empowered consumers, digital natives, and rapidly evolving technology is the real driving factor. 

An entire generation has entered the global economy with a tremendous ability to research and shopping savvy. They price compare, showroom, use coupons, read reviews, leverage social to the hilt and bring those capabilities with them everywhere they go (mobile). Technology enabled all this but it was the kids who grew up with the technology that are really keeping businesses on their heels. What was a truly innovative idea three or four years ago is now table stakes. Just look at free shipping and bold CTAs. This is why innovation matters - if you want to add value it has to be unique. Being a "me too" only gets you so far.

In some ways its a vicious cycle. Brands create new way to interact and everyone copies them. Then the truly innovative brands have to move on to the next thing to create a differentiated value proposition. This is the world we live in. 

In a recent study Oracle executed with the help of Digitas LBi and Spindrift, we surveyed over 300 Director level e-commerce professionals across industries. Among the B2C respondents, continuing innovation and competition were there two biggest business challenges in the coming years.

B2C e-commerce business challenges

This is the world we live in, it's hard to stay on top for too long but that's not a bad thing. Those who have innovation in their DNA thrive in this kind of environment. Innovation matters because it's what differentiates. Excellent execution on the status quo can make a lot of money but bringing innovative services and experiences is the holy grail for most companies.

How SaaS Levels the Playing Field for Mid-Sized Companies

Traditionally, innovation has been the purview of big companies with lots of money to spend. They would buy enterprise software and then develop customizations and extensions with an army of developers, testers and admins. The new economy, the digital economy, is turning that model on its head. Start ups with lean development staffs are disrupting entire industries with data, the cloud and mobile solutions. Today a mid-sized company can get one of the world's best enterprise e-commerce solutions for a monthly rate that is incredibly affordable. 

By using a SaaS based platform companies get a bunch of benefits but two are particularly important:

  1. Improved free cash flow - the value of CAPEX vs OPEX is well documented. This discussion is so common that many "get it" at a high level but miss the nuance for mid-sized companies. For big companies with tons of money to spend the value proposition here is only incremental. But for a mid-sized company this can be HUGE. By avoiding large outlays of cash in the form of one time purchases of perpetual license software they have more "free cash flow" to reinvest in other parts of their business. The finances associated with SaaS are quite literally financial enablers for growing your business.  E-commerce is a revenue generating piece of your business. Investing here is important but it doesn't have to come at the expense of growing other parts of the business.
  2. Time to innovation - We wrote about what the the next great innovation will be over on the Avalara blog. The short summary is that no one knows but the key to really moving the innovation needle is rapid cycles of development, deployment and testing. Some ideas will be great, other won't. That's okay. Digital companies don't mind throwing some code away. IT no longer has to be a roadblock. On a similar note, by leveraging SaaS e-commerce you get regular and meaningful product upgrades without doing anything. The rapid dev/test cycles enabled by the cloud and PaaS for SaaS can disrupt industries and are just as accessible to mid-sized companies as they are to large enterprises.

How powerful could your business users be with the right e-commerce platform?

Platforms, Not Point Solutions, Facilitate Innovation

We care deeply about the success of Oracle Commerce but when we talk about digital transformation and facilitating innovation it expands beyond e-commerce. True digital transformation involves the entire organization. It transforms how sales goes to market, what channels you leverage, how marketers communicate the companies value proposition, how the organization develops new products and how service reps care for customers. Digital transformation is as much a shift in mind set as it is a shift in how things get done; but for any meaningful innovation to occur you need underlying technology that facilitates. You can leverage point solutions for each part of your business but you end up creating roadblocks to future innovation because those point solutions weren't designed and integrated with purpose.

A platform on the other hand is a technological enabler of business outcomes that support your entire organization, or at least broad swaths of it. A platform provides out-of-the-box integration services to the major pillars of the business. It allows you to not only customize the end users experience through configuration, but also to enrich the overall experience through extensions services - think PaaS for SaaS. Oracle CX Cloud was recently ranked by Ovum as the leading customer experience platform in the industry - in part because of this integrated focus.

Cloud platforms facilitate innovation

The point here is not that mid-sized companies need to buy into an entire platform but rather that the cloud gives them access to these sorts of platforms. If you are a mid-sized retailer looking to take control of your online customer experience and want to leverage what is arguably the world's best e-commerce platform, you can do that without breaking the bank. If your business needs change and you need a world class marketing cloud, you can easily expand there. Same goes for service and sales automation. In a lot of situations you'd are forced to take a massive CRM or ERP system in order to get this type of capability expansion. More commonly for mid-sized companies, however, is that they can only afford one piece of the puzzle. 

Don't compromise


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