Global Enterprises Embrace SaaS for Its Intelligent Tools

ISG Provider Lens report sees strong growth in SaaS market before the COVID-19 pandemic

Enterprises embracing the software-as-a-service model are making use of its intelligent features to better understand their business data and generate new and predictive insights, according to a new report published by Information Services Group, a leading global technology research and advisory firm.

The 2020 ISG Provider Lens Digital Business – SaaS Solutions Global Report finds many enterprises adopting SaaS tools for their artificial intelligence and machine learning features in the human capital management (HCM), enterprise resource planning (ERP) and customer relationship management (CRM) areas.

Smart features in SaaS products are offering several new benefits to business customers, said Jan Erik Aase, director and global leader, ISG Provider Lens Research. “Some of the most recent SaaS updates enable companies to understand late payments, predict cash flow and anticipate cash needs or availability,” he said. “Using credit scores, AI can predict customer defaults.”

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AI provides a more accurate understanding of seasonal impacts on revenue and sales, enabling predictive procurement, the report adds. Financial planning and results forecasts can be improved by using current SaaS offerings.

For HCM, AI helps companies understand employee experience and its impact on health and productivity, the report says. Behavior analytics and sentiment analysis can predict retention and attrition. AI can also accelerate the employee recruiting process by scanning candidates’ resumes.

For CRM, AI can estimate deal close chances to predict revenue, the report adds. In commerce, AI powers dynamic pricing and product recommendation. For contact center agents, AI translates voice to text to compare with previous calls and recommend the next action. AI also provides real-time customer sentiment analysis, which can be used for automated call escalation.

The report also notes that the SaaS market is seeing growth in the number of vendors, including small, niche providers dedicated to a single industry in a limited geographical area. Many larger SaaS companies have acquired smaller vendors in the past three years, with vendors seeing acquisitions as a way to grow their customer base.

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The SaaS market was seeing strong growth before the COVID-19 pandemic, the report notes, reaching a record high in annual contract value (ACV) in the first quarter of 2020, according to the ISG Index, which measures market performance. The latest ISG Index covering the third quarter shows the global SaaS market has decelerated from the second quarter, although ACV still is up 2 percent from the prior year, and 3 percent higher year-to-date versus 2019.

The report suggests SaaS customers pay close attention to support options and potential mergers when choosing a SaaS vendor. Some vendors provide customer support directly, while others transfer support responsibility to partners. A large number of partners and apps in a vendor’s marketplace is one indication of a robust ecosystem that attracts more contributors and innovation.

The 2020 ISG Provider Lens Digital business – SaaS Solutions Global Report evaluates the capabilities of 19 providers across three quadrants: Human Capital Management, Enterprise Resource Planning and Customer Relationship Management.

The report names Oracle Cloud as a leader in all three quadrants and Microsoft, SAP and Workday as leaders in two. Salesforce, UKG (Ultimate Kronos Group) and Zendesk are named as leaders in one quadrant.

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