In the face of a black swan event like COVID-19, OTW’s portfolio companies have been focusing on pivoting their business model or modifying their product/service offerings. Amongst these companies is Smart Tech Solution, a computer-aided design (CAD) software developer for civil engineering purposes. In response to the pandemic, Smart Tech has migrated its hard-ware dependent products online to offer Software-as-a-service (SaaS). This builds a new revenue stream that is independent of any hard-ware based authentication that was previously required.
One of Smart Tech’s software that will adopt the SaaS model is Smart Road, a software for designing roads. Smart Road takes engineering survey data as input, guides designers through entire road designing process and produces design drawings and quantity/cost estimates as its outputs. Its end users are engineering agencies and professionals involved in road design, construction, and maintenance. The software completes the tasks faster with systematic design process, and gives automated calculates and reports.
Smart Tech is not planning on completely migrating Smart Road to the SaaS model; the SaaS model will be an alternative to the existing proprietary license. According to Serish, this change solves Smart Tech’s immediate problems caused by limitations of the hardware-based model under COVID-19. With the SaaS model, Serish explains that “there is flexibility for clients in terms of time/cost. We are also targeting students and engineering colleges. Initially, we expect that there will be a separate type of customer base, mostly comprising of students and short-term users. The shift will be gradual and involves continuous value addition around this new model in terms of product, client support, communication, engagements etc.”
Since face-to-face marketing has not been possible, Smart Tech plans on selling the software remotely and made further changes to their sales process. Instead of shipping their software with a hardware device for authentication like before, they have switched to an online authentication system. According to Serish Dhital, CTO and Co-Founder, “Almost all of our sales activities are now online. We conduct virtual demo sessions on a regular basis. We are able to hand out our software for trial with online authentication.” There are some activities in their sales process that still requires physical presence, but they are trying to manage the best they can.
These changes will cause a difference in the customer experience pre and post SaaS adoption. The product delivery will be much easier, and the demo and trial option will allow customers to get acquainted with the software before purchase. Furthermore, the customers will have flexibility with time/cost for their license making their buying decision easier. “We have experienced better customer relation with clients opting for SAAS model. Communication is frequent. They feel they have more control as they are paying and using according to their need.” Plus, Serish adds, since the “shift towards this SaaS model will be gradual and it will take some time to have substantial client base to show notable effect on monthly recurring revenue (MRR). But eventually, that [a heightened customer retention with increase in the MMR] is what we are hoping to achieve. We have just taken initial steps towards the new model and there is a lot more to do.”