Is SAAS just hype? Where is business and show me the money!

Software as a service is no more Beta. Even though this grow at a relatively slow pace, SAAS has been considered as a competitive line of business in India.

Availability of potential customers, substantial data to show the money, persistent innovation, interest from global technology giants and venture capitalists made this byproduct of cloud computing, very attractive.

Evolution of Greytip Online - India’s most popular online payroll software , True POS - the leading point of sale tool on SAAS, Freshdesk - the fresh and cute online Help desk software and growing popularity of Salesforce, Trello and Deskaway are giving enough proof that SAAS is viable in India.

As per the article Public cloud gains momentum in India, cxotoday.com finds from Gartner "the biggest segment of the market is Software as a Service (SaaS), having 36 percent of the total cloud service market. Out of the 233 billion INR that will be spent on cloud computing between 2013 and 2017, 89 billion INR will be spent on SaaS"

E-readiness/broadband penetration plays an important role for SAAS. It would be futile to focus on geographical segments, where Internet connectivity is still, a bottleneck.

As published in Track.in, according to 2010 statistics, 10 million broadband subscribers are active in India, of which Maharashtra leads the list with over 1.8 million subscribers followed by Tamilnadu (1.3 million) and Karnataka (1.13 million). Kerala has the highest broadband density with 0.7 million subscribers.

These 15 segments (states) could be ideal destinations to pitch in for SAAS

Small and medium enterprises (SMEs) account for 80-90% of the Indian SAAS business, today. By considering the typical business culture and geography of India, segment specific sales models could augment the acquisition process. If we plan segments based on nature of business, 9 segments could be created across India.

The average selling price and sales model are interdependent as far as sales growth is concerned. When target a large segment with a simple tool, low selling price with self service sales model would be suitable.

 

When target a very small segment, self service sales approach may not be suitable. We may need to adopt transactional sales and if the tool is complex, then enterprise model. However in both the cases, it would be risky to go with low average selling price.

Business support applications may be showcased across segments. However for tools like help desk, point of sale, ecommerce platform etc., service providers may further focus on specific segments

Segment 1	IT, ITeS, KPO, Consulting & eCommerce	1500C	Segment 2	Factories & SSIs	50000C
By considering the huge penetration of software products/ services and technical knowledge of potential buyers, customer acquisition could be relatively effortless here. However exposure to enterprise tools and legacy systems may make them more demanding and quite unrealistic in terms of SAAS offerings. If we achieve 10% of 15,000 units, it would be 1500 customers. Self service sales approach would be appropriate. Engagement is the key and keep the conversation going.			This segment is highly price sensitive.  Biggest challenge could be reaching the potential customer and we can not expect the stakeholders to carry portable gadgets, always and find the SAAS provider via Google search. If we take 10 million SSIs in India, 1 million firms are registered SSIs or SSSBEs. By considering the 1,00,000 factories, the segment can grow further. If we achieve a nominal 5% here, it would be a whopping 50000 customers. A mix of self service and transactional sales approaches would be appropriate. Engagement is the key and keep the conversation going.
Segment 3	Schools, Colleges & Training Centers	10000C	Segment 4	Hospitals & Diagnostic Centers	500C
General perception of education sector as 'non-profit establishment', stakeholders tend to bargain with vendors and pricing is critical here. Approximately 2,00,000 educational institutions could be in India. If we achieve a nominal 5% here, it would be a whopping 10000 customers. A mix of self service and transactional sales approaches would be appropriate. Engagement is the key and keep the conversation going.			This would be another potential segment where software penetration would be negligible except in Super specialty Hospitals. 5000+ units are functioning across India. 10% of this can contribute 500 customers. A mix of self service and transactional sales approaches would be appropriate. Engagement is the key and keep the conversation going.
Segment 5	Hotels, Restaurants & Resorts	250C	Segment 6	Courier, C&F, Packers/Movers, Shipping, Travel & Fleet Services	5000C
This would be another potential segment where software penetration would be negligible except booking or POS. 2500+ units are functioning across India. 10% of this can contribute 250 customers A mix of transactional and enterprise sales approaches would be appropriate. Engagement is the key and keep the conversation going.			This is one of the fast growing segments and SAAS can add value to business here. Reaching customers would be bit difficult by considering the line of business and non-tech savvy audience. There could be 1,00,000 service firms in this segment. If we achieve a nominal 5% here, it would be a whopping 5000 customers. A mix of self service and transactional sales approaches would be appropriate. Engagement is the key and keep the conversation going.
Segment 7	Retail Sector - Food, Apparel, Jewellery & Electronics shops	1000C	Segment 8	Real Estate, Infrastructure & PMC	500C
Branded retail chains and malls would be already running on legacy systems or ERPs. However we can find local super shops, retail chains, jewelries, exclusive garment showrooms, distributors etc. Reaching customers would be a challenge. If we achieve a nominal 10% of 10,000 such units, we would be adding another 1000 customers. A mix of transactional and enterprise sales approaches would be appropriate. Engagement is the key and keep the conversation going.			Small and medium builders, construction companies, architects, interior designers, project management consultants etc. would constitute another potential segment. This segment is vulnerable to market correction, then and there. Price sensitive segment and customer acquisition could be bit difficult. Approximately 5000 such establishments could be there. If we achieve a nominal 10% of this, we would be adding another 500 customers. A mix of transactional and enterprise sales approaches would be appropriate. Engagement is the key and keep the conversation going.
Segment 9	Other Industries	1000C
Outdoor Marketing, Agencies in Sales Promotion, Printing & Publishing, Clubs, Pizza Shops, Farms, Amusement Parks, Cable TV networks, Multiplexes etc. constitute another potential segment.  50000+ units would be functioning across India. If we achieve a nominal 5% of this, we would be adding another 1000 customers. A mix of self service and transactional sales approaches would be appropriate. Engagement is the key and keep the conversation going.

What is in SAAS for Small and Medium Enterprises ?

Meet Mr. Joye Gomez, 33 years old ambitious CEO of a SME in Bangalore - the FruitsNJuice fruit vendor.

Last year, during a cloud summit, I met this guy as he has been trying to get more insight on Greytip Online, the cloud based Payroll & HR software.

Probably, many of us may not even think of retailing fresh fruits & juice as an organized business. After masters in agribusiness and a short stint with a MNC, Joye Gomez started his first FruitsNJuice store in Bangalore with 2 employees, almost 3 years back. Bangalore, India's Silicon Valley got a special inclination towards hygiene and may be this could be one of the reasons behind the success of FruitsNJuice stores across the city.




Photo Courtesy : Original work of Ali Karimian, Creative CommonsCC BY-SA 2.0

By the time Joye Gomez reached 25 stores across the city with a staff strength of 60, FruitsNJuice managed to achieve a whopping sale of 500 fruit bowls and 750 juice packs, on an average from each store. 30% of sale is through phone booking and 70% over the counter.

Let's see what made Joye Gomez to visit the summit.

Huge number of transactions, maintenance of order details, verifications, real-time data analysis, JIT for fruits, preparation of salary and incentives, monitoring leave of absence and expense claims made the life of Joye Gomez and his Accountant, extremely difficult and reached a level where they have only two options – add more staff for accounting and administration or use information technology to streamline and simplify the process.

As FruitsNJuice has been operating with a moderate margin, Joye Gomez is not in so favor to spend again on staff. Being an avid reader, he had somewhat idea on benefits of SAAS tools for Small Business.

For order management and point of sale, Joye Gomez identified true POS, as the best tool to go with. For accounting, as it is centralized, he has decided to go with the existing desktop tool for some more time.

Managing staff salary preparation and distribution is the next big thing. At the time of this transition, everybody get their paychecks by 5th and to achieve this, 3 people including Joye Gomez had to spend day and night for a week to crack numbers across spreadsheets. To look after entire statutory aspects, he has appointed a consultant too. However, staff accountant will be spending even preparing reports for the consultant.

It was when Joye's Chartered Accountant referred Greytip Online, he has signed up for a trial account and evaluated the services for a month. Joye, by seeing some of the customer references , almost decided by the time itself to use Greytip Online. Incidentally, I have got the opportunity to meet this young entrepreneur at the summit and spend half an hour and explain the benefits, key features and how to go ahead.

During the discussion, I have noticed that Joye Gomez has no website and not done much in social media. I recommended him to try Google Apps, Google Local Business Center, Facebook & Twitter to promote among Gen Y. As Joye has shown interest in creating an online portal to sell, guided him to buildabazaar, where an e-commerce site can be hosted without any investment.

Today, FruitsNJuice is a 125 people company with 50 stores and an amazing turnover of 500 million... and expansion plan across cities. According to Joye Gomez, the overall expense towards software services across the shops is around 75K per month and for FruitsNJuice, it is worth spending.

Here is the overall satisfaction index of this CEO upon SAAS tools

1. No deadlock in order management, perfect POS and real time data analysis
2. 100% just in time (JIT) for fruits and related consumables
3. 5% orders getting generated from e-commerce portal
4. Complete and seamless document management and mailing
5. Real time CEO Dashboard for staff details
6. Perfectly streamlined one point reference for staff info
7. Staff attendance and leave of absence at mouse point
8. Preparation of staff salary, statutory returns and payslips in minutes
9. Perfect statutory compliance - ESI, EPF, IT and PT

Joye's own words "These tools are giving me the freedom to manage my business without visiting my stores frequently. I am not writing fat cheques for store supervisors or techies to manage technology. In fact, I myself processed the salary, when my staff accountant was on medical leave..." broadcast how SAAS tools helped the CEO of a Small and Medium Enterprise to expand business, improve the effectiveness and add further value to business.

Disclaimer: FruitsNJuice, Joye Gomez, Cloud Summit are not real names/events. Resemblance to any business is purely coincidental 

Saas Made Software Affordable For SMEs

Today, intelligent business applications like HR & Payroll, POS, CRM, Project Collaboration, Market Research, e-commerce portals etc. are affordable to Small & Medium Enterprises.Thanks to Software as a Service (SaaS) offers via cloud!

See the figure 1 for understanding SaaS value map

 

Let’s visualize Payroll process of a 25-30 people strong Tour & Travel Operations Company. Every month, Supervisors will forward the attendance report together with employee leave details duly signed by concerned Managers to Accounts Manager. Accounts will enter leave details in a register for record maintenance and cross verification in future, loan payments, deductions etc. Then Accounts Manager will update required information in a spreadsheet to calculate the salary payable to employees. Once the salary statement is ready, will take a print out and get the signature of General Manager and forward to Cashier for payout. Next to this Cashier will print payslips. As they are not paying salary through bank account, they will take payslip printouts in duplicate. During salary disbursement, Cashier will collect one copy with the signature of employee and filing purpose.

Now let’s see how a good Online Payroll can make the entire process, simple and enable the Accounts Manager to save time & money and provide so much value add to the process.

1. Connect to Internet, visit SaaS provider’s website URL <30 seconds>
2. Check & verify features, clientele, pricing and testimonials <5-10 minutes>
3. Verify security and privacy policies, terms and conditions <5-10 minutes>
4. Sign up for trial for one month <5 minutes>
5. Set up company information, finish basic configuration <2 minutes>
6. Enter basic employee information including employee’s bank account details (can create a digital file and handover to company’s bank, so that they can transfer the salary to employees) direct entry or data import using a spreadsheet <15-30 minutes>
7. Setup previous months' payroll <5-10 minutes>
8. Define salary structure, import salary information for the last 3 months in the system <15 minutes>
9. Create current payroll month and update salary details <10-15 minutes>
10. Process payroll <1 minute>
11. Generate salary statement, check/verify accuracy of payroll, compare differences (if any) with last month’s payroll <10 minutes>
12. Generate statutory reports and returns <10 minutes>
13. Generate Bank Transfer file and forward to Bank for salary transfer <1 minute>
14. Release payslips to employees, either via employee self service or through mail <1 minute>
    

That is all. We have processed payroll, distributed payslips, generated reports/returns and archived data without any additional efforts. Sounds simple and amazing, right? 

Cost of software for 25 people could be less than your monthly grocery bill. So with priceless value additions in business process, you got incredible cost advantage too.