Mass Customization – How Software as a Service (SaaS) enables customer centric behavior

Mass Customization – How Software as a Service (SaaS) enables customer centric behavior
One Sunday afternoon while I was reading a book on manufacturing, I read this interesting term called Mass Customization and I was wondering what exactly it meant. Though I couldn’t understand it fully at that time in terms of how practically feasible it is going to be, when I later started learning more about marketing, I realized the power of mass customization.

Facebook: A perfect example of mass customization. Here I choose what I want and customize my software (applications / front-page) according to my needs.
Salesforce.com: Another brilliant example of web based database crunching and CRM system.
Google Docs: Another example of a web based product delivery as a service.

So why Mass Customization is important?
Well the people in sales would agree with me on the point that, whenever you visit a prospect and present your product / service to them, one question which you always want to avoid but seems unavoidable: Can we customize this?
“Now, after spending so much money on research and development my company came-up with a product and still this customer wants to customize this”, would be an obvious thought in anyone’s mind. However, you do know that the customer is asking for customized feature/s as their organizational needs are different. This is mostly true for every organization.

So what to do?
Well you can do 2 things: Keep making that installable software which sits and runs on someone’s systems, fixing bugs in it and charge customers for every new feature or customization they want.
Or
Choose a model which is delivered through web or is On-Demand. Provide software as a service.

The Good, the Bad and the Ugly
Though in certain cases it might not be possible to do mass customization, however, in the cases where you can deliver Software as a Service with customization options, this is what you can expect:
The Good: Long term loyalty, more flexibility and easy scalability, continuous management revenue, better service, better products, low cost products, open platforms, mass customizable by worldwide contributors, continuous partnership revenues.
The Bad: High initial investment like high porting costs, integration cost etc, initial implementation barriers, however, in long term the product delivery costs come down considerably and you outperform in the fierce competition of today’s world
The Ugly: I am yet to think what worst can happen, may be customers become more and more demanding and may just ask for something over the board…

Things to look for in the coming time: Mashups and Customizable Business Applications, like longjump

Why Suddenly this?
Well think of this: Your organization spends thousands and millions of dollars in managing the IT infrastructure, quality and security. And then repeat costs of up gradation, licensing and more…
So if you get a safe, secure, on-demand system which can save your time, effort and money, obviously you would want to do that. And in this web 2.0 world this exactly has been done and is now possible for you.
As the desktops are being converted to virtual desktops or web tops this was the most obvious change for you.
What’s next?
As always, the product lifecycle will take its own time, even after certain known failures this time in the software scenario and web 2.0 world this should work!