Product Differentiation for Software-as-a-Service Providers

The market for the new provisioningtype Software-as-a-Service (SaaS) hasreached a significant size and still showsenormous growth rates. By varying sizeof SaaS products, providers can improvetheir market position and profitsby successfully acting in the tensionarea of customer acquisition, pricingand costs. We first elaborate differencesconcerning product differentiationbetween classic software provisioningmodels and SaaS. Then, we introducea micro-economic based decisionmodel to maximize the return of aprovider by finding an optimal granularity,i.e. by varying the size of services.This paper makes two contributions inthis context: (1) it provides a conceptualfoundation for product differentiationwithin the scope of SaaS and(2) it presents the first implementationof variable reproduction costs for webbased software offers. The model is illustratedby a real world case with datafrom a SaaS provider

IT Sourcing Portfolio Management for IT Services Providers - A Risk/Cost Perspective

Utilizing a global IT sourcing strategy bears enormous growth potential. With the main focus on cost reduction in valuation of sourcing alternatives, risk and risk diversification effects are often inadequately considered or completely neglected. This systematically results in wrong decisions about global sourcing. Correct decisions are in particular important for the success of IT services providers (ITSP), which are the major beneficiaries of the market growth, though being faced with intensifying competition. This paper proposes a decision model for allocating software development projects of an ITSP to available sites in a risk/cost efficient way by adapting Markowitz’s Modern Portfolio Theory to IT sourcing decision making. The suggested approach covers not only costs and sourcing risks but also interdependencies between both sites and projects. Additionally, we propose methods for quantifying the necessary input parameters. We demonstrate the practicability of our approach in a case study with data from a major ITSP

Would i use my personal blog for commercial exchange?

As information-based processes are usually independent of the location or even the processor, they can be oftentimes either automated or relocated to foreign sites to profit from differences in wages. Both strategies bear enormous micro-economic potential in terms of cost savings. However, with the main focus on cost reduction, risk due to the uncertain development of effective labor costs or future transaction volumes are oftentimes either inadequately considered or neglected. This systematically leads to false decisions, in particular since the two strategies – relocation and automation – result in different risk profiles. In this paper, we analyze the conditions for automating or relocating parts of business processes and propose a decision model that suggests a risk/return efficient allocation to the alternatives. In particular, we consider how uncertainties of effective labor costs and transaction volumes influence the decision. As shifting tasks to other locations has effects on the workload at the original location, we also take into account costs for social effects. The practicability of our approach is demonstrated with an example that is based on real data of a major financial services provider

Sourcing and automation decisions in financial value chains

As information-based processes are usually independent of the location or even the processor, they can be oftentimes either automated or relocated to foreign sites to profit from differences in wages. Both strategies bear enormous micro-economic potential in terms of cost savings. However, with the main focus on cost reduction, risk due to the uncertain development of effective labor costs or future transaction volumes are oftentimes either inadequately considered or neglected. This systematically leads to false decisions, in particular since the two strategies – relocation and automation – result in different risk profiles. In this paper, we analyze the conditions for automating or relocating parts of business processes and propose a decision model that suggests a risk/return efficient allocation to the alternatives. In particular, we consider how uncertainties of effective labor costs and transaction volumes influence the decision. As shifting tasks to other locations has effects on the workload at the original location, we also take into account costs for social effects. The practicability of our approach is demonstrated with an example that is based on real data of a major financial services provider