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“A rule of thumb is that a lousy process will consume ten times as many hours as the work itself requires.”  – Bill Gates

 

What is a Business-as-a-Service (BaaS) Model?

More and more, enterprises are seeking third-party vendors to host business solutions rather than source the hardware and software themselves. This is widely known as the software-as-a-service (SaaS) model and it’s making enterprises more efficient as it continues to gain widespread adoption.

The thing is, a tool is only as useful as the manner in which it’s applied. That’s why the business-as-a-service (BaaS) model is emerging. In the BaaS environment, a vendor not only hosts its solution on behalf of the enterprise, it also takes part in managing the tool to ensure business goals are met.

This is quite valuable as vendors generally have experience across a range of customers and industries. So, the customer not only receives a hosted business solution, they also receive a wealth of knowledge and real-world experience about how best to apply the solution to meet business goals.

This delivers a new knowledge-base to your business and a third-party perspective on current processes and ways to improve them.

 

Why Would I Want to go the BaaS Route?

There’s a wide range of benefits to adopting a BaaS model.

 

Cost

First and foremost, the BaaS model is cost-effective. Enterprises don’t require capital investment to source the solution – it can generally be acquired through a monthly or annual subscription pricing model. This avoids the purchase and maintenance of hardware, the cost of software licenses and the head-count that comes with managing all this technology.

Also, professional services – which often are one of the largest hidden costs to an enterprise – are generally included in the subscription fee, making it easier to budget.

As an added bonus, BaaS solutions are generally scaled-up or down through an adjustment to the subscription fee. This de-risks the solution for the enterprise and facilitates quick change to go along with periods of growth.

Creative procurement departments might also appreciate some of the new pricing options a BaaS model enables. One example is the gain share model. Since vendors are helping manage the solution, many would be open to having part of their revenue tied to a gain-share, where a portion of customer savings are shared as an incentive.

 

Better Business Results

Customers are generally going to see better business results from a BaaS model. As I mentioned above, a BaaS vendor has a wealth of experience applying their solution in different enterprises to deliver business results.

As such, the vendor team is going to know what processes work, which don’t, which metrics to focus on and what strategies to execute. Furthermore, process tweaks and new strategies will generally be implemented faster, since a BaaS vendor will perform this duty on behalf of the customer, giving business managers more direct control of their applications.

 

Real-Time Monitoring and Management of Business Processes

A good BaaS vendor will constantly be monitoring the performance of the business processes its solution executes. As such, any inefficiencies and/or areas for improvement will be brought to the customer’s attention and quickly fixed.

Most BaaS vendors also offer performance improvement reports at regular intervals (usually by the quarter), offering customers recommendations for new strategies to use the solution to deliver business performance.

 

Virtualization of Business Resources

A lot of technical professionals are familiar with the term ‘virtualization’ as it refers to computing. The BaaS model delivers the same core principal to customers’ business teams.

Essentially, virtualization refers to sharing central computer processing power between a number of ‘virtual’ machines, each running its own operating system. Don’t get bogged-down in the technical side of things – the point is that when one of the virtual machines needs processing power, it draws from the host machine. Conversely, when one of the virtual machines is idle, the host machine can lend its processing power to a different virtual machine that needs it. It’s basically a clever way to do more with less.

The BaaS model introduces this same concept to a customer’s business team. When a certain initiative requires more resources, the customer doesn’t have to hire people or ‘borrow’ from another department – there’s a whole team of vendor business professionals that can fill the gaps.

 

The BaaS model is in its infancy but should gain steam quickly as more enterprises are looking outwards for business solutions. It makes sense to avoid the excessive capital expenditure and maintenance costs that come along with sourcing technology in-house. Adding business support and industry expertise to the hosted solution is the next logical step.