Give a person a fish and you feed them for a day. Teach a person to fish and you feed them for the rest of their lives. This is an old saying that still rings true today. It speaks of the fundamental difference between a short-term fix and a long-term solution. Organizations today face quite a number of “fish” choices. One area pretty much everyone agrees needs re-evaluation is IT. No, the department is not aging out – far from it; IT is more relevant than ever, and that is a double-edged sword. To return to the metaphor, we’re sure IT teams appreciate the odd fish thrown their way, but they would appreciate being taught to fish even more. Software-as-a-Service (SaaS) is the long-term solution.
When it comes to IT, organizations are faced with a challenging reality, complicated by three crucial challenges:
A 2021 survey from Gartner found that IT executives saw talent shortages as the largest obstacle when attempting to acquire new technologies, with 64% stating this was so (up 60% from 2020 data). Organizations are adapting new software solutions and technologies – PTC saw in our own recent survey that 71% of respondents adapted new software during the pandemic around remote collaboration alone. This does not include the litany of other improvements needed for effective, sustainable, decentralized operation.
Now, with continued fears (and a possible self-fulfilling prophecy) of recession, CNBC reports that tech organizations are reducing headcount wherever they can. Even with a department as crucial as IT, tight financial resources reduce the likelihood of adding employees even where they’re needed. This is compounded by the fact that a majority of employees, IT included, are stressed, over-worked, and near (or at) the point of burnout. To be clear, burnout isn’t solved by “being a good boss” or only pursuing those employees with a real “passion” for their work. As Deloitte found in a recent survey, nearly every employee – even those who reported having a real passion for their work and liking their job in general, are close to or at burnout-level stress.
So to recap, organizations are shifting how they do business, adopting new software and technology solutions to ensure continued success, while at the same time trying to maximize the resources they have without making large financial investments, and accomplishing all of this with employees that are dangerously close to burnout. This does not include the increasing prevalence of cybercrime, a predominantly IT-related responsibility.
This is an incredible strain and one that makes certain avenues of operation unsustainable. One example, asking an IT staff to fully regulate and maintain all internal software operations, while also overseeing hardware performance, while also spearheading efforts to promote and improve cybersecurity, while also participate in helping guide an organization’s digital transformation investments and initiatives is a lot to ask of any team, even a large one.
Before fully explaining how SaaS will benefit IT and why many organizations already have or are in the process of switching to SaaS, it is important to define just what we are discussing. SaaS is a software subscription and delivery method, wherein a third-party leases software solutions and platforms to the user for a recurring rate (annual, bi-annual, etc.). To give an example, when PTC customers use solutions like Onshape or Arena, they do not necessarily own those solutions, rather they are leasing them on a continued basis.
Why pursue SaaS if you do not own the solution? Simply put: SaaS solutions remove a lot of the grunt work, such as maintenance and oversight. All of that is now done by the third-party provider. Case in point, when PTC updates its SaaS solutions, the updates go out automatically, and all copies are updated at once to prevent versioning issues. These solutions are also optimized for decentralized work, as they do not rely on a user-maintained server farm or data storage.
So, for organizations suddenly finding themselves with at least a share of flexible/remote workers (pretty much everyone during the pandemic), SaaS makes a large amount of sense. Workers are connected to the software they need and can be confident it is up to date and secure. All of this happens without IT being burdened with development, installation, and continued maintenance operations and costs.
Recent data from McKinsey (and many others) confirms that employees like flexible work arrangements and the ability to work remotely as they see fit. Rather than risk increased employee turnover, organizations are instead prioritizing solutions that can empower remote collaboration without compromising productivity or security. SaaS offers a compelling alternative to on-premises solutions, making it far easier for organizations to scale up, including with remote onboarding and training.
These trends – accelerated but not started by COVID – are creating a world where IT departments may no longer be expected to perform the routine maintenance for every bit of their organizations’ software solutions. In fact, data we gathered shows that this process is already under way, with a clear competitive edge emerging.
In an upcoming whitepaper, PTC broke out high-level respondents into two categories: technological leaders and laggards. Respondents were asked to intuitively self-identify into one of these groups. The results were very illuminating, to say the least. In short, leaders are performing far better with many of the challenges of new work, including remote collaboration, employee retention, productivity, and innovation.
One key difference? Leaders were embracing remote and flexible work arrangements before the pandemic forced them. This meant they were a step ahead in terms of software investments and didn’t have to radically realign. This led to a variety of compelling advantages, but one of the most crucial is a marked difference in IT culture. When asked (again intuitively) if their IT teams spent more resources – time and money – in maintaining operations or facilitating new business strategies, 43% of leaders reported the latter, compared to only 19% of laggards.
Embracing decentralized SaaS solutions has enabled these technological leaders to reduce the stresses of maintaining the status quo for their IT teams and allowed them to engage in more thoughtful, proactive work., including providing expert insight and strategic planning into exactly how and where various digital transformation initiatives should be deployed. The differences here are stark and we will continue to explore exactly how they continue to impact organizations in future research.
Already, however, the lessons are increasingly clear. IT departments are in challenging times and switching from on-premises to SaaS (where possible) provides a clear avenue for improving productivity, reducing employee turnover – and very likely also reducing stress. Organizations with in-house IT departments running purely on-premises solutions should consider the value of SaaS immediately or risk falling behind as the evolution of work continues.
Colin McMahon is a senior market research analyst working with PTC’s Corporate Marketing team, helping to provide actionable insights, challenging perspectives, and thought leadership on trends, technologies, and markets. Colin has been working professionally as a research analyst for many years, and he enjoys examining and evaluating just how large the overall impact of digital transformation technologies will be. He has a passion for augmented reality and virtual reality initiatives and believes that understanding the connected ecosystem of people and technology is key to a company fully realizing its potential in the 21st century.