With all the new Software as a Service (SaaS) providers out there, it’s theoretically possible to create a site that includes the tools you need to manage your business and effectively support your customers without ever hiring a programmer or IT person. I’ve recently investigated what it would take to build a site like this for a small business. At first, I was really excited and wanted to rush out and sign up for half a dozen services; then, I started to question costs, processes, data and responsibilities. My excitement dulled once I saw how the powerful site I was envisioning could quickly descend into an expensive, risky and scary SaaS-y nightmare.
The vision: SaaS frees you to run your business
Until recently, I worked for a SaaS provider. The big selling point to our customers was that our the technology would “land lightly” on their the organization. This was a nice way to say that they didn’t need to bother their IT departments because we’d take care of the technical end.
This remains the great appeal of SaaS. You can get email services, customer relationship management (CRM) and help desk software, curation tools, marketing campaigns and social media optimisation, all by entering your email address and handing over your credit card.
You can avoid hiring programmers and system administrators and let the experts in each field take care of business for you. Occasionally, you have to do some configuration or pay for a few hours of consulting, but generally, it’s pretty worry free.
It lets you get on with running your business, right?
The illusion: SaaS might save you money
The fees for many SaaS services are actually quite reasonable. Take Google Apps, for example. For $50 per year, you can get your hands on email, scheduling file sharing and office applications.
Even the more specialized services are fairly affordable. Help desks for $20 to $50 per person per month. CRM software for under $25 per user per month. Social media tools for as low as $10 per month. Doesn’t sound too bad, does it?
The premium tools for things like curation and social media analytics can see you digging much deeper, spending $1000 per month on each tool. Even at these higher costs, they may be worth the money because of the specialized service they provide.
However, this is where you need to start doing the math. Especially if you’re a small business or start-up. Make your wish list of tools, crunch those numbers and prioritize what tools you really need and why. Know how it will affect your bottom line. It’s easy to sign up for this and that and suddenly not realize that your money is flowing out the door faster than you thought.
In fact, the right mix of SaaS services at the start may get you more than hiring a single specialized employee, because you can split your investment into different service needs. However, don’t forget to think about how these costs will grow as your business does.
Also, take a moment to determine your breaking point for breaking up with your SaaS provider. At what point does hosting your own solution or hiring someone (or several someones) to do the work become more cost-effective that your SaaS solution? What would they have to do wrong to make you leave? Having some idea of this at the start of your SaaS journey can help alert you to when you need to reevaluate your solution.
The monsters lurking under the bed: What you shouldn’t ignore
Even if you’re paying attention to costs and planning your SaaS suite carefully, you can still build a nightmare if you forget about the impact on your processes and data.
- Think about how you will use each service in your daily tasks. For example, you’ll have a username and password for each provider. Are you going to be logging into a hundred different places to accomplish seemingly simple tasks?
- What about integration? Can you have a single sign-on for providers that play nicely together? Can they share data, so you don’t have to move it around yourself? The last thing you want to do is have several records of your client data.
- If they offer an integration, what does that really mean? Be skeptical!
- Look for hidden fees or development costs for allowing integration. Will you need to hire someone to make the API play to your needs?
- Some integrations only mean that you can view the data from the other service but not use the data or update it. This means you’ll be logging into both services to make things happen; or importing and exporting data to move it around.
- Understand that your data may be at risk if integrated services cease to play nicely together, even for a short time because one has upgraded or changed their service but the integration mechanism from the other hasn’t caught up.
- Have a plan for what you’d do if a service goes down (or closes up shop!) Make regular local backups and know where and how you would access this information in an emergency. Lots of providers tell you that you can export the data, but you can only export it if they are running. And, check what format the data comes out in. In a pinch, you can reference a human-readable XML to at least view the data while you’re hiring someone to convert it to the new system.
- Same goes for if you want to break up with your provider. Can you get the data out and what will that data be like when it comes out?
- Know what your customers would expect from the data you store for or about them. Some companies want the data stored or hosted in their home country, where it is under the jurisdiction of the local laws.
Waking up in the morning
Some people might think I’m being overly cautious or overly critical of SaaS providers. Or, that I don’t think SaaS is a good way to go. That’s not the case at all. By all means, take advantage of the SaaS tools out there. Your business can really leverage the expertise and knowledge behind them.
However, I believe the popularity, ease-of-use and availability of excellent SaaS tools is making us a little complacent in our choices. If you’re buying a costly tool for your business, you’d do a proper evaluation, right? If you’re hiring a new employee, you interview and check references. You plan and budget and take time to consider risk vs. reward.
Don’t stop doing that just because the price seems cheap and the tool is popular, or you might find yourself having a hard time waking up from a SaaSy nightmare.