Standardizing Operations as a Key to Growth
In the fast-paced world of Software as a Service (SaaS), growth and scalability are paramount. Whether you are integrating acquired companies, aiming for faster growth, standardizing operations across the globe, or orchestrating a roll-up of multiple entities, having a common operating model is the key to unlocking your business's full potential.
A common operating model serves as the backbone of your organization, providing structure, consistency, and efficiency across all facets of your business operations. Let us delve into the quantifiable and qualitative benefits as well as some real-life examples.
Improved Efficiency and Productivity
By standardizing processes and systems, you eliminate redundant workflows and minimize manual errors. By eliminating inefficiencies and maximizing productivity, you can achieve higher returns on investment (ROI) and allocate resources strategically towards growth initiatives.
For example, one company made a series of acquisitions but did not want to make changes in how the sales teams worked. As a result, they had over four hundred contract templates which made both auditing for compliance and new contract issuance a nightmare.
Consistent Customer Experience
A unified operating model ensures consistency in delivering products and services to your customers. Whether they interact with your sales team, engage with customer support, or use your software, they experience the same level of quality and professionalism. Consistency breeds trust, fosters long-term relationships, and drives increased customer satisfaction.
One of the largest technology companies today had a logo issue even into its' established years. The color and font type of their logo varied depending on what continent you were on. For their many multinational customers, this created a confusing impression of disunion. Unifying around even seemingly simple matters like this can make a significant difference in how the customer views your company.
Better Decision-Making with Data
With standardized data collection and reporting mechanisms, you gain valuable insights into your business performance. Centralized analytics provide a holistic view of your operations, enabling data-driven decision-making. From forecasting sales projections to optimizing marketing strategies, having access to accurate and consistent data empowers you to make informed choices that drive business success.
A company which had grown by acquisition decided to give each firms’ sales leaders complete autonomy. Each leader decided to maintain their own sales methodologies. When it came time to pull together a company-wide forecast, the company was crippled in trying to reconcile the differences, not to mention explain them.
Enhanced Scalability
A standardized operating model lays a solid foundation for scalability. As your business grows, you can easily replicate successful processes across new markets, products, or acquisitions. This scalability accelerates your time-to-market, allowing you to capitalize on emerging opportunities swiftly and stay ahead of the competition.
Consider the firm that bought several adjacent applications to expand its portfolio but neglected to standardize its onboarding steps. The Sales team did its job in selling several projects with the entire new suite. However, it became clear that their consulting teams were not on the same page when it was time to implement the technology. After multiple complaints from executives at these clients, and some negative press in the market, the company was forced to start an initiative to unify these methodologies.
Seamless Integration of Acquired Companies
When acquiring new entities, integrating disparate systems and processes can be challenging. A common operating model simplifies this process by providing a blueprint for alignment. By standardizing operations across all subsidiaries, you ensure a smooth transition, minimize disruption, and accelerate the realization of synergies.
One company acted proactively by standardizing job levels and compensation, as well as defining guidelines in organization structure (minimum, maximum, average # of reports), before they made a major acquisition. As a result, it was a lot easier to append the new company to this standardized, well-defined model.
What is in a Standard Operating Model?
It is best to start with your strategic intent and brand which may be altered depending on what you are trying to achieve. All customer communication and messaging should be consistent across products and across the globe. Alignment of people is important as well – leadership, organization, and even standard job titles and compensation need to be integrated and unified. Internal and external processes such as forecasting, contracting, billing, onboarding and support should be united in a consistent manner. Finally, systems need to be addressed – a thoughtful review of how you consolidate your IT infrastructure, and applications is critical to efficiently moving forward.
There is a lot of change here, so a robust change management program is vital to success.
Conclusion
In the dynamic landscape of SaaS, standardizing your operating model is not just a choice; it is a strategic imperative. Regardless of your goals, a common operating model provides the foundation for sustainable growth and success. These benefits, both quantitative and qualitative, underscore the importance of adopting a common operating model to propel your SaaS business towards greater heights of success.
By Duane Kotsen