11 Questions to Ask Before Choosing a SaaS Vendor
Whether you’re searching for an online CRM system, a web-based registration program, or an Electronic Medical Records (EMR) service, you should take the research process seriously. After all, information is the lifeblood of your business. And choosing an online vendor to handle your information should not be a decision based on blind faith.
Many people use the terms online application, web application, online software, Software-as-a-Service (SaaS), and cloud computing interchangeably. However, these terms are not all the same. Here we’ll be discussing Software-as-a-Service (SaaS), specifically subscription-based, cloud-hosted online business applications.
Most small businesses tend to first gravitate toward a SaaS option when they’re looking for a sophisticated information solution that would be too expensive for a local install. Options could range from a help-desk platform like Zendesk.com, an e-commerce solution, an electronic medical records service (EMR), or an invoicing solution like Freshbooks.com. Whatever the case, due diligence is in order. Here are the 11 most important questions to ask when choosing a SaaS vendor.
Your most obvious concern is whether the SaaS solution is a good fit for your business. Try to run a trial version and plug in some common scenarios. If you’re a school and you’re testing an online registration system, check to see how the software handles issuing a refund or pro-rating a class. If the service involves interaction from your customers, try testing it on a select few of them, too. If there are glitches, or your staff or customers can’t find the utilities they need, chances are the new software won’t be embraced. If so, shop around; there are lots more fish in the sea!
The subscription payment plans of SaaS solutions are often preferred over out-of-the-box software that can require expensive licenses and hardware, not to mention installations, maintenance and upgrades. However, be sure you have some flexibility within your SaaS subscription, in case your quantity of users or accounts changes over time. The ideal SaaS product will grow or shrink with the changing needs of your business. Also, be sure to calculate the long-term cost of your new SaaS subscription. While the monthly charge may initially seem low, the long-term expense can be substantial, so be sure the benefits outweigh the liabilities.
The interface should be simple to navigate, allowing you to quickly find what you need. And, don’t fall into the trap of choosing online software that has too many bells and whistles. While you might like the idea of printing 56 different kinds of reports or 10 ways to customize your color scheme, think twice about how much choice you really need. Too many options can make the navigation process ponderous and confusing—especially if those options involve multiple pull-down menus or are all hanging out on the top navigation bar.
Every new product involves a learning process, but does this vendor leave you out in the wilderness or walk with you through the woods? Most SaaS solutions have online tutorials, webinars, or even phone consultations to coach you through their product. Check to find out how much training you’ll have access to; The last thing you want is to spend your next two months researching your new software.
If and when the software gets buggy or there’s a service interruption, you’ll want to reach customer support. Different companies offer different kinds of support, and the key for you will be identifying how necessary it will be to get help ASAP. If you have a high-traffic website relying on a SaaS-based e-commerce solution, then you’ll probably expect support now. If you’re only accessing the software intermittently, support through email with some delay may be an option.
Some companies offer 24/7 live chat sessions, others have a hotline number, and others require you to submit questions or concerns through email. Some of these scenarios may involve charges. The most important point is: Are they responsive?
Your SaaS vendor should provide a Service Level Agreement (SLA) which formalizes their objectives for availability. The SLA should indicate stats on how often the service will be online and available. A distinction will probably be made between scheduled and unscheduled downtime, and for the purposes of your business, you should be concerned with both. Furthermore, the vendor should self-impose penalties for violating the SLA.
For additional due-diligence you should also ask for references, so you can speak to actual customers who can attest whether the company is really following through with their promises.
You should expect frequent upgrades from a company that is keeping their technology up-to-date. As a consumer, you should also have a way to submit feedback and requests for enhancements. And you should always be notified when upgrades or changes are being implemented.
It is worth asking some probing questions related to your prospective SaaS vendor’s information security. At the least you should expect 24-hour monitoring, firewalls, intrusion detection, data encryption, SSL and application security. The vendor should also guarantee that your information will never be sold to a third party and that no other parties will have access to your data.
Whether this application is hosted at one specific data center or in the cloud, you should be concerned about the details. Not all SaaS services are responsible for their data hosting. Rather, hosting may be outsourced to a third party vendor. In this case you’ll want to know who that vendor is and where the hosting takes place.
You will also want to know what their backup strategy is and whether there is a disaster recovery plan in place. In the case of a disaster, you need to know how quickly you can access and retrieve your information. You should have free and unfettered access to your data at all times. And, your data should be fully portable, meaning that you can export all of your information on your terms, at will. Again, this would likely be laid out in the SLA.
Be aware of any regulatory standards that may impact your industry. For example, if you accept credit cards, your SaaS vendor should be in compliance with Payment Card Industry standards (PCI compliance). In the medical industry, you’d be concerned with HIPPA privacy and security standards. You might also need to consider any industry-related auditing standards.
In these times, you don’t want to partner with a business that might not be around in a year or two. Confirm that the company has an established reputation. And if you’re concerned about their long-term viability, you should ask about funding sources. If the company is just running off of venture capital funding, with no recurring revenue, then you’re right to have concerns and should maybe shop elsewhere. And, as before, check references thoroughly.
If you’re satisfied with your prospective SaaS vendor’s answers to these questions, chances are you’ve found a good fit. Now, that you know how to choose a SaaS vendor, it’s time for you to sign up and start getting familiar with your new SaaS application. Good luck, and may your business prosper!
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