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What it is and why it matters

Are you looking for a more effective way to use your IT budget? If so, Software as a Service (SaaS) may be the answer.

SaaS is a $15B market that is growing three times faster than traditional software, according to the Boston Consulting Group (BCG).  Large organisations have the biggest SaaS usage at 85%, followed by small organisations at 72%, and mid-sized organisations with 66%.

Organisations are increasing their budgets for SaaS as well. “BCG interviewed 80 CIOs and found they were willing to consider SaaS solutions for 35% to 60% of their application spending,” according to Louis Columbus with Forbes.com.

In this article, you will learn:

  • What is SaaS?
  • How SaaS can help your organisation
  • Which SaaS challenges you should watch out for
  • 8 tips to help you successfully select a SaaS vendor for your organisation

What is SaaS?

SaaS allows service providers to deliver applications over the Internet as a service. Instead of having to buy, install, and update software on your computer, you simply access the application in your web browser. It is sometimes called web-based software, hosted software, or on-demand software.

Some examples of SaaS products include:

In some ways, SaaS providers are a lot like your bank. They take care of each customer’s privacy while providing a service for large groups of people that is both reliable and secure.

SaaS offers the following benefits:

Decreased initial costs

With traditional software, organisations have a large capital expense at the beginning when purchasing new hardware and software. SaaS, on the other hand, is a subscription-based service without these additional expenses.

Easier adoption

SaaS allows for easier adoption than traditional software since there is no software to be installed. It is available from any computer with an Internet connection. Since most users are familiar with how to use the Internet, SaaS applications usually have a stress-free learning curve and a higher adoption rate.

Integration

Many SaaS providers partner with other SaaS providers to integrate their services. For example, cloud accounting provider FreshBooks integrates with CRM package Highrise. This allows users to share their customer data between the two programs.

Easier telecommuting

“Last year, inclement weather caused employee shortages for 73% of companies. Of these, only 39% had the ability to work remotely,” according to Sydney Rootman with SaasAddict.

Are your employees able to work efficiently from home? If they have an Internet connection and a web browser, they can work using SaaS.

Challenges with SaaS

Integration

If two SaaS providers have integrated their software, it makes sharing data between the two systems a simple process. On the other hand, if your organisation has data in another location (i.e. on your office network) or with another SaaS service provider, it can be a challenge. 

For example, your Microsoft Dynamics ERP package probably won’t integrate with your SaaS CRM software without some work. This is why integration is an important topic to discuss before you pick your SaaS provider (more on this later).

Customisation

Sometimes SaaS software is not as customisable as on-premise software. This can require proper planning before picking a vendor to make sure that the solution is able to handle your organisation’s business processes and workflows.

8 tips to help you successfully select a SaaS vendor for your organisation

1. Review multiple vendors

Anytime you are looking for a SaaS vendor that will cost more than $100 a month, make sure you look at a minimum of three alternatives. During this process, you’ll find variances in features, contract requirements, service commitments, customer support, and cancellation policies. Don’t become enamored with bells and whistles and make a commitment before reviewing multiple vendors.

2. Request a demo

Demos are a great way to start the conversation with a SaaS sales rep. Whether it’s an online or on-site demonstration, make sure you have at least one stakeholder attend from each area that will be affected by the program. This way, you’ll have at least one person in the meeting that understands the business processes for each group.

During the demo, ask questions that require the sales rep to show the functionality that you need. For example, when evaluating an accounting system, don’t ask, “Does your software handle payroll?” Instead, have them show you how their software handles the process.

3. Try before you buy

Most of us have been guilty of making a knee-jerk decision and purchasing the first product we see. Before you do this, step back and assess your needs with your primary stakeholders before making a decision. Whenever possible, ask the service provider if you can try their service for a month before making the decision. During the trial period, make sure each department affected by the software takes an appropriate amount of time to evaluate the software.

4. Will the service integrate with your businesses processes?

When evaluating a service that integrates into the core of your business like HR, accounting, ERP, or CRM software, take the time to discuss your business processes with the SaaS vendors. Ask them if they have successfully integrated with your other enterprise systems, including ones in the cloud and behind your firewall.

5. Know their export options

What would happen if you picked a vendor and they disappeared or decided to no longer offer the service after two years?

Before you select a SaaS vendor, you need to know their export options. Make sure you have a guarantee that you can get your data out of their system if the need arises.

6. Research the vendor size

It’s always a good idea to know how many employees a vendor has before making a decision. While this may not affect software features, you need to make sure they have support staff on hand to carry out your requests.

Be careful with organisations that have one or two developers who provide both development and support. What happens when these developers go to a conference for a week? Will the vendor’s level of support suffer as a result?

7. Know the total cost

It may be that the biggest reason your organisation switches to a SaaS service is to cut cost. Make sure you know about any hidden fees (transaction fees, maintenance fees, etc.) which can increase the cost of the software. Remember to factor in the cost of training or include it in the contract if possible.

8. Check their references

Part of the process of vetting a SaaS vendor is to get feedback from organisations that use their software. Whenever possible, ask them to give you a list of their typical “great customers” as well as customers that have had challenges. This will give you a better understanding of how the vendor resolves real issues and if they stand behind their product and service.

Reduce IT costs with SaaS

SaaS can help you reduce costs and quickly implement new software if you select the right vendor. By following these eight tips, you can feel confident that you are picking the right SaaS vendor to help your organization succeed.

Do you need help evaluating a SaaS solution?

R & G Technologies is a Brisbane IT Support and IT Consulting firm that helps organisations across Australia. We can help you identify and integrate the right SaaS products that will meet your needs. Call us on 1300 562 886 or contact us via this page

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