Senior Account Manager
Software as a Service (SaaS) firms are everywhere. From Netflix to Google, Shopify to Zoom; they’re in our homes, on our phones and most of us rely on them to keep our businesses — and lives — running.
SaaS floods the market. In a recent report, Gartner predicted that global spending on public cloud services will hit a staggering $679 billion in 2024 — and there’s good reason. The SaaS model has endless potential, it’s accessible, secure, agile and cost-effective, making it a hit with both customers and providers.
But how are the SaaS companies staying relevant? Well, just like the rest of us, they’re turning to the tech du jour: Artificial Intelligence (AI).
Adding AI to the traditional SaaS model mix, can empower firms to drive greater service, product and content personalisation, all while getting a better understanding of their customers through data-led metrics.
While the AI-SaaS model is at the edge of innovation, there are some inherent risks for firms in this space. So let’s dive into the way AI is driving change, where the risks are, and what firms can do to mitigate them.
The AI-driven revolution
Artificial Intelligence is fast becoming a fixture in our lives. It’s everywhere we look, even when you’re not looking for it. And within SaaS, it’s exploded.
By harnessing AI, SaaS companies are able to deliver more personalised, efficient, and intuitive user experiences. They can better understand user behaviour, anticipate user needs, and ultimately drive greater value for their customers.
Take Salesforce’s Einstein AI, which provides personalised recommendations, predictive analytics, and automated workflows to help sales and marketing teams better understand and engage with their customers.
AI is also being used by SaaS companies to streamline operations, automate repetitive tasks, and optimise processes across a range of industries and business functions.
By incorporating AI-driven capabilities into their platforms, SaaS companies are helping organisations improve efficiency, reduce costs, and drive growth in their operations.
An example would be Zapier, whose AI-powered features include intelligent task routing, automatic data synchronisation, and smart recommendations for workflow optimisation. AI is making SaaS companies and their customers leaner, more efficient and more intelligent.
There are four main ways that SaaS companies are revolutionising their offering — and the software space as a whole — through AI.
1. Personalisation: On a cosy Sunday evening at home, we often reach for the remote and browse through Netflix to see what’s new. But how does it know what we like to watch? You guessed it, it’s all down to that sneaky AI algorithm that’s designed specifically to deliver tailored experiences right to our screens. A Hallmark Christmas movie with a 98% match got you intrigued? No wonder — that green percentage got you to click and watch the movie the whole way through, likely leaving you with a warm and fuzzy feeling. 2. Robotic Process Automation (RPA): We’ve already touched on Zapier, but there are a range of companies out there that are leveraging AI to automate repetitive tasks, streamline workflows, and boost efficiency. Take ContractPod’s AI-powered features that enable their customers to achieve higher levels of productivity and innovation with the use of their legal assistant ‘Leah’. Leah can quickly review and summarise lengthy legal documents, and synthesise and discover connections that might elude a human. 3. Predictive analytics: What’s hot, and what’s not — what company wouldn’t want to be able to forecast trends and user behaviour to enable proactive decision-making? Sisense, for example, supports companies to actively anticipate trends, identify opportunities, and mitigate risks. 4. Scalability: A venture capital buzzword. Companies like Amazon Web Services, Microsoft Azure and Google Cloud Platform are at the forefront of the scalable AI solution revolution, supporting companies to build, deploy, and manage AI applications at scale.
The risks of innovation
While adapting and reinventing is key to staying relevant, it comes with some inherent risks.
Take regulatory compliance for example, it’s a minefield at the best of times, but adding never-before-seen AI to the mix and the complexity dial just hit 11. Data privacy is another big risk, especially around the collection, storage and use of sensitive and identifiable customer data.
So what can a SaaS company do to mitigate risks like this? Well, for a start it’s important to have robust data governance structures in place, as well as continuous monitoring of the AI systems so teams can proactively detect and address issues.
Collaboration with peers is also considered best practice, sharing insights and lessons learned — because you never know who might spark that idea. Lastly, building transparency into your AI algorithm will enhance accountability and should mitigate biases in the code.
But, insurance can also help. Different companies will need different covers, but there are three main covers you should consider as an AI-driven SaaS. 1. Cyber insurance: Data breaches and cyber-attacks are ever-present in our lives and SaaS companies can be a prime target for hackers. Cyber insurance, also called cybersecurity insurance, is designed to provide financial protection against specific risks including privacy breaches, malware, hacking and extortion. While cyber cover isn’t required by law, it can be key to protecting many industries and businesses, even those who do not consider themselves to be at risk of cyber attack. 2. Professional indemnity insurance: Mistakes can happen, we’re only human after all. That’s why professional indemnity (PI) insurance, also known as errors and omissions insurance, is there to protect your business from a range of exposures. From mistakes in the service you’ve provided, compensation claims, contract disputes and reputational damage. 3. Intellectual property insurance: Intellectual property is anything you create with your mind — it’s an umbrella term for intangible assets covering everything from ideas and inventions, designs and artwork, symbols and logos, stories and brand names. Depending on the cover you get, intellectual property (IP) insurance may cover legal costs and any damages involved in defending or settling a claim of infringement. It could also cover legal costs if you want to take action against another party for infringing on your IP.
Some final thoughts
When your company is capturing the zeitgeist of our age, removing barriers and creating new ways of working through personalised, data-driven tools, it can be easy to forget the perils that can lay just ahead.
But by balancing industrial growth with robust risk management procedures and insurance, AI-driven SaaS firms can build companies that are more prepared for long-term sustainability.
At Superscript, we’re well-versed in the risks faced by disruptive, inventive tech companies and can build bespoke policies to mitigate these risks, allowing founders to focus on the product. Get in touch with one of our team to learn how.
This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer.
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- 30 January 20244 minute read
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