Improving Software-as-a-Service Sales by Managing the Knowledge of Change Agents : A Case Study of an IT-company in a Servitization Transition

Abstract: Servitization describes the trend amongst companies of supplementing tangible product offerings with services. A case in point is the cloud computing which represents a paradigm shift of servitization in the IT industry as it allows physical products to be delivered entirely remotely as a service. Software-as-a-Service (SaaS) constitutes a delivery business model of cloud computing which allows customers to access a supplier's application through a cloud infrastructure and is seen as a disruptive innovation. Despite the growing market for cloud computing services, the concept is claimed not to be very understood by many businesses. When transitioning from product-oriented to service-oriented value propositions, successful companies have for instance put efforts on the education of their sales personnel. Such employees could be seen as change agents whose goal is to influence the adoption decision making processes of the organization’s clients. Furthermore, as economies have become more knowledge-intensive, Knowledge management has become more critical. Previous research has put little attention to how Knowledge management relates to the diffusion rate of innovations. This study, therefore, explores how management of change agents' knowledge can facilitate the mediation of innovations. A case study was conducted of an IT company experiencing a servitization transition towards SaaS offerings to achieve the purpose of this study. The study is delimited to the diffusion of SaaS as an innovation within the financial industry in Sweden. 12 employees within the Case Company and six clients were interviewed regarding the subjects previously mentioned. The results suggest that the mediation of SaaS is done through personal communication, presentations, and distribution of sales material. The study has found that change agents need to be clear in their mediation efforts of SaaS solutions as the understanding of what SaaS includes sometimes differs between clients and suppliers. Furthermore, customers considered SaaS solutions for systems that they view as not being directly value-adding and for those systems they prefer standardization as it allows cost-efficiency. SaaS allows multi-tenant environments and is therefore suitable for standardized offerings, as standardization corresponds well to the business logic appropriate for a codification Knowledge Management strategy. The Case Company already conducts a codification strategy. However, the finding of this study suggests that they should strengthen it since a focused KM strategy is preferable to attain more of its benefits and to increase the organizational knowledge creation capabilities. Conducting a codification strategy is something they have good capabilities of pursuing and is suggested to facilitate the change agents' mediation of innovations. Sales material at the Case Company is identified as dependent on personal performance and standardizing the material would thereby ensure an even quality. Making a variety of standardized material easily accessible would further allow the change agents to select material with appropriate messages aimed at specific types of customers, which is important since the customers are found to have different preferences