Cloud Ave.: The SaaS Metrics Maturity Model

InsightaaS: InsightaaS: Cloud Ave. is a site that examines cloud through both a technology and a business lens. In this post, internet software executive Joel York presents a model illustrating the progression of SaaS metrics – from historical to predictive, across financial and operational measures – to enable better management of SaaS businesses. As York points out, completion of the four-stage arc “requires an integrated management approach, especially between finance and customer success, two departments that have historically had little to do with each other.” His roadmap and its conclusions, however, hold that “the finance-customer success partnership is essential to the Metrics-Driven SaaS Business,” and can ultimately yeald a “stage 4 Metrics-driven SaaS Business [that] is a well-oiled recurring revenue generating machine.”

Becoming a Metrics-driven SaaS Business is no easy task. It takes time, commitment and plenty of customers. However, the financial rewards of moving beyond standard SaaS financial metrics to SaaS customer success metrics and ultimately to sophisticated predictive analytics are significant. Each step toward SaaS metrics greatness builds upon the last. The stages of development can be classified into a natural progression of increasing SaaS business understanding from financial stability to operational measurability to revenue predictability outlined at the very beginning of this series. These stages define a SaaS Metrics Maturity Model that provides a SaaS metrics roadmap along with benchmarks at each stage of development for SaaS companies that aspire to become a Metrics-driven SaaS Business…

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