Global Enterprises Embrace SaaS for its Intelligent Tools
ISG Provider Lens™ report reveals strong pre-pandemic SaaS market growth.
Enterprises are increasingly adopting SaaS tools utilizing AI and machine learning to enhance business insights in areas like HCM, ERP, and CRM. The SaaS market reached a record high in annual contract value in Q1 2020, with a 2% increase from the previous year. Despite a deceleration by Q3 2020, the market saw a 3% year-to-date growth. The report highlights the importance of vendor support options and indicates Oracle Cloud as a leader across multiple quadrants.
- SaaS market reached a record high in annual contract value (ACV) in Q1 2020.
- Global SaaS market ACV up 2% year-over-year and 3% higher year-to-date versus 2019.
- AI tools in SaaS products improve financial planning, procurement, and employee experience.
- SaaS market experienced deceleration in growth by Q3 2020 compared to Q2.
ISG Provider Lens™ report sees strong growth in SaaS market before the COVID-19 pandemic
STAMFORD, Conn., Oct. 07, 2020 (GLOBE NEWSWIRE) -- 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 today by Information Services Group (ISG) (Nasdaq: III), 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.”
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.
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.
A customized version of the report is available from UKG (Ultimate Kronos Group).
The 2020 ISG Provider Lens™ Digital business – SaaS Solutions Global Report is available to subscribers or for one-time purchase on this webpage.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe and Latin America, as well as in the U.S., Germany, Switzerland, the U.K., France, the Nordics, Brazil and Australia/New Zealand, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.
A companion research series, the ISG Provider Lens Archetype reports, offers a first-of-its-kind evaluation of providers from the perspective of specific buyer types.
Starting this year, each ISG Provider Lens™ study will include a Global Summary to help enterprise subscribers better understand provider capabilities across all geographic markets covered by that study. All ISG Provider Lens™ reports also will now include an Enterprise Context feature to help executives quickly identify key insights related to their roles and responsibilities.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.
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