The SaaS business model is unique in many respects, and requires a different set of drivers and metrics to measure business performance based on the type of company — pure-SaaS, on-premise software company, integrated technology/ product company. We present a strategic framework with key drivers and metrics for increasing growth, profitability and sustainability for the SaaS business.
Companies across industries are increasingly adopting Cloud/ Software-as-a-Service (SaaS) business models to meet evolving customer needs and to benefit from high margins and monetization opportunities. The operating model required to support this new Cloud/SaaS business model requires alignment across the operating model, spanning the spectrum from products, to routes to market, to finance and support functions. More importantly, a successful SaaS business requires an operating model anchored on key drivers and metrics to measure and optimize business performance that are unique to the Cloud/SaaS business. These metrics are essential to assess progress as organizations embark on their transformation journey, and calibrate their approach accordingly.
KPMG’s new publication “Transforming your SaaS business: A strategic guide for optimizing business performance,” outlines a strategic framework to assess performance at each stage of the SaaS business lifecycle - launch, scale/optimization and stabilization. The publication defines the key metrics, their interpretation and how best to incorporate them into a SaaS business strategy to accelerate growth, improve profitability and achieve sustainability.
We hope you find the strategic drivers, metrics and transformational priorities provided in this publication valuable.