There are approximately 30,000 SaaS companies in the world — that’s a gigantic pool for your business to choose from. These tools are key, with the average company spending 30% of its IT budget on SaaS, but they tend to be costly. That puts added pressure on businesses to subscribe to the right platforms as committing to ineffective software could result in lost time, money, and efficiency.
How can you make sure your organisation makes the best choices? You can start by asking the following five questions:
1. Are you making an informed decision?
Make sure you have obtained as much information about the product as possible. SaaS purchasing platform Vertice recommends asking for the following while you’re in conversation with vendors:
- A trial (or trial extension), data sample or proof of concept
- Case studies with a similar use case
- A reference from one of their customers
- The option to trade in a future testimonial or case study for an additional feature
- Different payment terms, for example monthly as opposed to quarterly
- A user ramp-up plan (now vs three months vs six months)
This is an absolute minimum in the SaaS purchasing process. You can only think seriously about committing to the product once you understand the costs and have tried it out, or at least have evidence that it’s been successful for other businesses with similar needs.
2. Does it align with your business needs?
Don’t be taken in by attractive marketing tactics without thinking carefully about what your business requires from the SaaS tool you’re investigating. Also consider how it would fit in with your current processes — will you move parts of the workflow to the product or will you integrate it into your current process?
Once you unpack your company’s current practices, hopefully it will be clear which areas can be improved. This will help you to identify the specific features and capabilities you need from a SaaS tool and in turn maximise your return on investment. For example, the software will probably have to be compatible with your existing technology, and you may want to ensure it’s able to grow with your business and integrate with future upgrades and new technology.
3. Have you had quotes from competitors?
We’ve already noted how jam-packed the SaaS market is, and although this can make it feel overwhelming when you’re looking for providers, it can also work in your favour. This competition means that there are likely to be multiple vendors offering the service your business needs, so make sure you investigate a number of them so you can compare prices, features, and contract terms and conditions.
Make sure you explore at least five different vendors. These SaaS product review sites can help you compare products and see what other customer experiences have been like.
4. Have you negotiated?
Given how expensive SaaS can be, it’s always worth negotiating with any vendor you speak to. This will be easier once you’re armed with quotes from competitors.
For example, you might be able to bring the price down by negotiating the removal of unnecessary features or support options (remember you may have other software that performs these tasks), or agreeing to discounted rates if you choose a multi-year contract or additional future licenses at a reduced cost.
Gartner offers some advice you could utilise by downloading its 8-Step Playbook to Optimize Software and SaaS Negotiations.
5. Does it adhere to security and compliance standards?
It’s wise to run a security audit on any SaaS platform you’re considering so you can check whether its security infrastructure meets the standards you require. For example, you would hope to see:
- Multi-later threat detection and prevention capabilities
- Periodic security audits and penetration testing
- TImely vulnerability patches
- Authentication policies such as SSO, encryption and key management
- Regular security monitoring
Make sure your IT department has studied privacy policies, terms and services and ask vendors for evidence that they comply with laws and regulations specific to your business. Also ensure you know exactly how your customer data will be stored and secured, and how they would respond to a data breach.