Strong vendor engagement helps drive customer success with everything-as-a-service

To better understand how companies are adopting service-based IT, including their objectives, outcomes, challenges, and practices, Deloitte surveyed 600 IT and line-of-business professionals responsible for “everything-as-a-service” (XaaS) at large US organizations.¹ XaaS is seen as fueling innovation: Eight in 10 adopters agreed that XaaS has led their organization to reinvent business processes, develop new products and services, invent a new XaaS business model, and even change how they sell. Three in 10 “strongly agree” that XaaS is helping them achieve each of these outcomes—suggesting there’s still room for improvement.

Indeed, eight in 10 XaaS adopters believed their organization could achieve much better business outcomes with XaaS if their vendors acted as more consultative partners. To test this hypothesis, we assigned each respondent to a group that reflects the level of vendor engagement they have: high (29% of respondents), medium (36%), and low (35% of respondents), based on how often they were “satisfied” or “extremely satisfied” with the various consultative activities their XaaS vendors may be providing.²

Strikingly, the more engaged and consultative the vendor relationships are, the better adoption appears to be paying off (see figure). More than half of the XaaS adopters with a high level of vendor engagement strongly agree that XaaS has helped them improve decision-making and collaboration, accelerate experimentation (by allowing them to quickly evaluate new solutions), and reinvent business processes—versus roughly a quarter of the adopters with the least engaged vendors. Having highly consultative vendors also appears to give XaaS adopters an edge when it comes to market-focused activities, including creating new products and services, inventing new business models, growing revenue, and changing how they sell.

It may not be surprising then that adopters with the strongest vendor engagement report the highest competitive advantage: 43% of the “high” engagement group said that XaaS enables them to establish a significant lead over competitors, versus 20% of the “medium” group and merely 14% of the “low” group. Ultimately, adopters with highly consultative vendor relationships are more likely to feel that XaaS has improved their customer experience: 56% of the “high” group strongly agree, versus 41% of the “medium” group, and just 22% of the “low” group.

Considerations for XaaS providers

The flexibility of XaaS means if customers are not satisfied with their experience, they can switch providers fairly easily. Therefore, XaaS providers should focus on how they can fuel successful outcomes for their customers. Becoming highly engaged, consultative partners—not merely hands-off service providers—can play a key role.

• Establish a customer success (CS) program that features both pre- and post-sales engagement. Many XaaS providers have established CS initiatives to provide structured services beyond conventional support and training.³ According to a Deloitte study of CS programs, 90% of customers wanted pre-sales support to help them define a business case and evaluate potential ROI, but only 20% actually received such services.⁴ And our XaaS study found that only 34% of adopters were “extremely satisfied” with providers’ demonstration of how their solutions can address specific business needs and priorities. To help ensure that customer engagement happens consistently throughout the solution life cycle, providers should also consider assigning customers a CS representative or team.
• Determine what value-added services would help customers optimize their use of your solutions. Our XaaS survey revealed that more than four in 10 adopters typically use less than half the capabilities of their XaaS solutions—neglecting a lot of purchased functionality. Savvy providers can help their customers attain more value by helping them understand the full solution, reminding them about unused functionality, and suggesting additional or alternate services. Providers can also offer training on how to use their solutions, integration with other solutions to allow for seamless interoperability, and help with accurately forecasting spend.⁵
• Leverage analytics to improve your offerings and the customer experience. Many XaaS providers may be missing a way to boost revenue. Only 37% of our survey respondents strongly agreed that their XaaS providers continually improve their service based on what they learn from customer usage.⁶ However, leveraging usage data to guide product decisions can pay off: 85% of customers who say their provider incorporates their feedback into product development said they will invest more in those solutions, versus just 62% of customers who feel their feedback isn’t being used.⁷ Some astute providers have embraced usage analytics: A subscription-based language-learning platform uses behavioral data to understand product performance, release updates more quickly, and closely monitor the impact of product changes.⁸ A business spend provider differentiates itself by taking a “community intelligence” approach, aggregating anonymized data from its software-as-a-service (SaaS) customers and providing peer benchmarks, along with insights and recommendations for achieving better performance.⁹