SaaS, Mobility and "Shamrock" Organizations Support More Home-Based Skilled Work

Ricoh's North American market is changing -quickly. Trends such as the volatility of the job market, frequent down-sizing and the recession are behind a new organizational structure known as the "Shamrock Organization" and vast numbers of highly skilled home-based workers known as homepreneurs. New data indicates that these homepreneus class will only grow.

It represents a very real and profitable customer base that B2B players should address. These are the corporate workers who are still business people, but work from home. In the future they will create virtual organizations. They are a new demographic that is very likely to adopt SaaS + device solutions because they are simply, and mobile.



Shamrock Organizations Have Emerged, Giving Rise to Homepreneurs

Predicted by the Irish economist, Charles Handy in 1989, the three leaves of the "shamrock" represent the three components that make the organization work:

• The core staff
• A set of contractors on the fringe of the organization
• A significant temporary workforce

Shamrock Organizations Support/Harmonize with the Trend toward Self-Employment

In the "shamrock" organization, a permanent core of managers and employees inside the company is supported by independent contractors and part-time workers. To a large extent, these contractors are homepreneurs. We can define homepreneurs as white collar workers primarily working for large and mid-size firms.

Laptops, SaaS and Cell Phones Allow Support Work Anywhere -Supporting Homepreuring

As the popularity of cell phones, personal printers and other hand-held devices complemented the emergence of the World Wide Web in the 1990s, location began to matter less and less. Now, with most of the American economy performing knowledge work -- as opposed to the manufacturing of physical goods -- it's become possible for workers and entire businesses to thrive in the home setting.

That trend, in turn, is giving rise to even more new technologies that facilitate the phenomenon of leaving the traditional office behind. Cloud computing, online collaboration tools, Web conferencing, and smart phones have all become part of the modern home office.

As the technological feasibility of home-based businesses has increased, there has also been a subtle shift in attitudes. For example, the corporate world once viewed businesses run out of the home as hobbies or else as quaint, marginal operations not worth noticing. But today, large and mid-sized firms increasingly recognize home-based firms as useful suppliers and valuable customers.

More Than Half of US Businesses Are Run From the Home Today

According to BusinessWeek,¹ more than half of all the businesses in the United States are run out of someone's home, not in traditional office space -- and their employees collectively account for more workers than all the companies backed by venture capital firms

According to a report published by Business Know-How, a major factor behind the homepreneur trend is the increasing number of layoffs and the lackluster jobs market 4. Combined with new technologies and diminishing economies of scale, this economic uncertainty has caused more people to feel that they stand a better chance of succeeding by being their own bosses. Many employees see their present jobs as dead-end, due to frozen salaries and a lack of opportunity for advancement, as higher-ups stay in place for fear of entering the job market.


Home Businesses, on Average, Are More Profitable Than New Ventures or Corporations

A new report from Emergent Research² in Lafayette, California -- which is itself a home-based business -- analyzed data from the U.S. Census, the Small Business Administration, and the Small Business Success Index. It found that only 35 percent of these home businesses have revenue of more than $125,000, and yet they compare favorably to traditional small companies in the benefits they provide for workers, their approach to marketing and innovation, and their access to capital. For home-based businesses, the main areas of concentration are professional services, construction, retail, and personal services.

Home-based businesses employ more than 13 million people, usually in businesses that have only two employees. By contrast, the National Venture Capital Association reports that the traditional businesses backed by venture capital firms employ only 12.1 million people.³

Likewise, home businesses keep more of their profits -- 36 percent, versus 21 percent for conventional operations -- because they have lower overhead per dollar of revenue.

Future Forecast: Homepreneurs Will Create Virtual Corporations

According to Trends Magazine, by pooling resources in the virtual world, homepreneurs in a particular field -- say, accounting -- could garner significant market share, without having any fixed headquarters. Corporate customers will value this arrangement because managing full-time employees and temps in your office is not the same as managing far-flung entrepreneurial workers who can shift allegiance at a moment's notice. Expect to see new firms arising with the specific aim of coordinating contractors for larger companies. This is already showing up in the form of Web-based firms that provide connections between larger companies and homepreneurs.

References:

1. BusinessWeek Online, October 23, 2009, "The Rise of the 'Homepreneur,'" by John Tozzi. © Copyright 2009 by Bloomberg LP. All rights reserved. http://www.businessweek.com
2. To access the Emergent Research report on home-based small businesses, visit the Grow Smart Business website at: http://www.growsmartbusiness.com
3. To access the National Venture Capital Association report on traditional venture-capital-backed businesses, visit the PricewaterhouseCoopers website at: http://www.pwc.com.mu
4. To access a report about increased layoffs contributing to the home-business trend, visit the Business Know-How website at: http://www.businessknowhow.com

Twitter: The True Voice of the Customer on the Web

When it comes to delivering information about products and services and getting instant customer feedback, the hottest tool out there right now is Twitter. Twitter is the micro-communication service that gives users an opportunity to express their thoughts in 140-character "tweets". It s a big hit in the social media world, and many companies are benefiting from it.

In fact, 20 percent of all tweets now contain requests for product information or responses to the requests. In ads, many companies now display the logo of an animated blue bird holding a sign that says follow me.

According to Associate Professor Jim Jansen, at Penn State University, People are using tweets to express their reaction, both positive and negative, as they engage with products and services.
And he goes on to say that "tweets are about as close as one can get to the customer point of purchase for products and services".

Jansen's research team investigated microcommunicating as an electronic word-of-mouth medium, using Twitter as the platform. The results were published in the Journal of the American Society for Information Sciences and Technology. The researchers examined half a million tweets during the study, looking for tweets that mentioned a brand and why the brand was mentioned, and found that people were using tweets to connect with the products.

With more than six million active users daily, and predictions of more than 20 million users by the end of 2009, Twitter is now seen as the "next big thing" on the Web. Even though Twitter is still in its early stages of adoption, businesses are starting to make profits from it, using it in creative ways to market their products. Jansen's study is among the first in the area of micro-communication within the business sector. And the research team is now conducting a focused study specifically on how companies manage and use their Twitter accounts.

Ricoh Innovation's WBR (Web Business Research) group is actively "tweeting" to attract users to its beta software trials. WBR is also monitoring Tweets that include the word "Ricoh" to capture the voice of Ricoh's current customers.

Information Source: businessbriefings.com October 2009 issue

SaaS Model Pros and Cons and Implications for Document Capture

I get asked frequently about the big trends : cloud computing, software as a service and cloud services. In this article I’ll expand on these ideas to explore the difference between SaaS (software-as-a-service), cloud computing and traditional software business to shed light on why apps that are “native to the web” (built for the cloud) versus simply web-enabled (built as traditional software offerings with an added web capability) bring very different customer value and require very different business models that few small document capture/processing companies can readily afford.. I’ll also give you an idea of how Ricoh Innovations is experimenting with cloud computing to offer beta-level document/image processing services that can be combined with SaaS offerings or used alone to improve business communication, collaboration and corporate workflows.

Saas – A Definition

Software as a service (SaaS, typically pronounced 'sass') is a model of software deployment whereby a provider licenses an application to customers for use as a service on demand. SaaS providers operate using an Internet-based multi-tenancy model. This means that all customers use a single instance of the application. Customers can only access their information — their data and unique configuration requirements are virtually partitioned from other customers. The multi-tenancy model means big servers and economies of scale, making it less costly to manage when compared to the cost of running the same software within most corporate firewalls. Furthermore, the SaaS model drives innovations in security, redundancy, reliability and increase software capabilities at levels that any individual customer couldn't do without great cost on their own.

The customer benefits of the SaaS model are clear: software rental without the burden and distraction of hardware and software maintenance, higher up time, lower start-up costs, and often, better accessibility from remote locations. The benefits of the SaaS model for providers is also clear: there is only one main system to upgrade – so upgrades can be rolled out in waves, system analytics give both the provider and the customer much better information/analytics on the system and its use, and revenue comes in monthly over a multi-year contract.

How Saas is different than the traditional software model

Software companies that provide packaged software and sell it in a traditional software model enjoy different benefits than SaaS businesses. The traditional software company must invest heavily in a direct sales/support channel, and focus only the deals large enough to support the expensive direct sales channel model. However, traditional software companies benefit from the ability to recognize revenue upon shipment and thus, have much higher revenues than most SaaS companies. This increased inflow of revenue means that traditional software companies can invest more in creating variations of their products, or add-ons to increase and deepen existing customer relationships and create new ones.

SaaS companies also require large sales/support channels, but not as large as enterpri

se software firms, and therefore do not have to limit themselves to large deals. SaaS vendors can offer their product to any size firm because it can be demoed on the web, and easily trialed by any company with an Internet connection. Thus, the SaaS model has proven to provide an enterprise-level offering on a pay-as-you-go model that small and mid-size companies can afford. This is one powerful driver for the adoption of the SaaS model.

Limitations of the SaaS Model

Now that we have a working understanding of the benefits of the SaaS model, let us round out our knowledge by discussing its drawbacks. Let’s revisit the Internet-based multi-tenency of SaaS I discussed earlier. Multi-tenancy means that all customers use a single instance of the application. Thus, SaaS is both easier to support, but much more difficult to customize. Until a compelling portion of the user base requires a new feature, the SaaS vendor may be reticent to provide and support it. Furthermore, the implicit workflow of the SaaS offering may not allow the customization required needed to provide optimized workflow for a single corporate user.

For example, let’s imagine there is a SaaS-based information management offering that is used by our corporation. It provides a solid value for the money, and unburdens our internal IT staff so they can focus on customer issues, rather than server upgrades. However, the corporate workflow, say invoice processing, that we work in, requires that paper as well as digital documents be added to the SaaS system/ The paper documents arrive as image-based data, with limited data about the document (metadata), making them difficult to properly fit in the SaaS workflow.

What our imaginary invoice processing workflow needs is the ability to string together a custom set of document/forms processing capabilities – say, identify what type of document it is (an invoice from our biggest supplier, for example, then convert the document from image to text and place it in the system both in the invoice process and tag it as related to our biggest supplier.

Unfortunately, document capture/processing software is not available in a SaaS offering today. It seems a pity that to achieve the advanced capture/document processing capabilities today we we would need to purchase, via a traditional software model the hardware consulting and software system. Why hav

e document capture vendors yet to take up the SaaS model? I posit that since most are relatively small companies, they do not have the financial fortitude to invest in a SaaS offering that would have an immediate negative impact on their profitability. Marketing a SaaS offering would dramatically decrease their current year revenue forecasts as they trade revenue today, for much smaller subscription fees for the future. . From a financial perspective, SaaS can be a nightmare for traditional software companies. How will th

ey attract and maintain their best salespeople on deals that are not recognizable in one lump? How will they explain to shareholders that they gave up software revenue today, for much lower subscription fees? And then there is the investment required for building a state-of-the-art facility to house and maintains your SaaS offering. SaaS requires a competency in running/maintaining a large software system that is not necessarily required in the traditional software business. Seen in this light, one can readily understand why niche software companies are not keen to jump to a SaaS offering. Large software companies, like Oracle, recognized this m

arket change quickly and now offer both SaaS “On demand” offerings as well as traditional software. Smaller vendors likely do not have the financial strength to do so in our recovering economy.

Ricoh Innovations Plans to “Beta” Document Processing SaaS Services

Ricoh Innovations believes that as the SaaS model continues to gain adoption, customers will need flexible ways to add processing solutions that proceed and follow the existing SaaS offerings of their SaaS vendors. Therefore, via our beta labs site Ricoh Innovations intends to offer world-class document processing services as SaaS offerings that can either be:

· integrated with Ricoh’s App2Me widgets and sent to a SaaS offering

· called as web services directly from a browser and sent to a SaaS offering

· accessed via handheld devices such as Blackberries, iPhones, etc and sent to our SaaS offerings

· strung together to create custom workflows via our IKON consulting channel

Ricoh Innovations is leveraging the emergence of cloud computing platforms to offer these services in a robust “beta” format that ensures up-time and scalability beginning officially in April 2010.