Why Automation Might Be the Key to Improving SaaS Business Performance
Amr Saafan
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In July 2024, SNS Insider Research confirmed that the Software as a Service (SaaS) market size is projected to reach an impressive USD 1057.8 billion by 2032. This explosive growth is largely driven by the pursuit of operational efficiency, cost savings, and flexibility — qualities that are critical for organizations worldwide.?
Automation is a central force driving this expansion, and more industry leaders are demonstrating its power. Take Alteryx with analytic process automation, for instance, which accelerates learning from data and empowers more users across organizations to generate insights rapidly. As SaaS continues to evolve, automation is proving to be the linchpin for businesses aiming to navigate the complexities of scaling. Let’s take a closer look below.
Common challenges faced by SaaS businesses
SaaS businesses are not without their challenges, as hinted by an early statistic from McKinsey claiming that 90% of SaaS startups fail. KloudPortal CEO Prashanthi Kolluru explains SaaS startups tend to do so for different reasons. For one, products that fail to meet market demands or don't resonate with customer needs often experience high churn rates and low user retention. Additionally, a subpar UI/UX can lead to poor adoption rates and high customer turnover. SaaS startups also tend to face cash flow challenges due to high upfront costs for development and marketing before establishing a steady revenue stream.
Meanwhile, expanding SaaS platforms can often become entangled in cumbersome manual processes, which can lead to costly errors. To thrive in this increasingly competitive landscape, SaaS companies must find solutions to streamline operations while also maintaining flexibility.
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How automation can help
Automation tackles the very challenges that threaten growth and sustainability. As outlined in our previous article on , an efficient SaaS business is built on the foundations of streamlined operations, data-driven decision-making, and scalable infrastructure. Automation plays a critical role in all of these areas by reducing manual intervention, speeding up processes, and enabling real-time analysis that’s driven by automated data collection and processing.?
For example, Salesforce’s Einstein AI refines product-market fit through its advanced analytics and predictive insights. This helps sales teams identify potential leads and forecast sales. Alternatively, Adobe’s Sensei offers intelligent tools for image editing, video production, and content management, which help streamline creative processes and improve the quality of marketing output. Otherwise, Google Cloud's Looker Studio analyzes historical data and patterns to generate accurate predictions, helping organizations forecast future sales trends and anticipate customer churn.
By tracking key metrics such as Monthly Recurring Revenue and Customer Lifetime Value, such automated reporting tools enable companies to refine their growth strategies and optimize resource allocation with precise, data-driven insights. These integrate seamlessly with billing systems to ensure that contract terms are adhered to accurately. The consumption billing software from provider SOFTRAX is pre-programmed to comply with ASC 606 / IFRS 15, ensuring that the SaaS businesses can monitor compliance in real-time, flagging any discrepancies or potential breaches. This reduces the risk of billing errors, ensuring customer satisfaction by meeting all contract provisions as agreed and consequently maximizing revenue.?
Meanwhile, automation simultaneously addresses security in SaaS operations. In fact, a SaaS security posture management platform from Wing Security is currently aiming to block sensitive data from being shared with more than 300,000 SaaS applications. With 70% of organizations now accessing AI platforms capable of training future AI models with shared data, automation will help businesses manage the complexity of securing multiple applications by streamlining access controls, monitoring user activity, and enforcing compliance policies.?
The flexibility and scalability that automation provides align with the dynamic needs of today’s SaaS market. As the SaaS market continues its growth trajectory, companies that embrace automation are better positioned to capitalize on new opportunities and achieve long-term success. For more on scalable software solutions and app development, check out our services here at Nile Bits.