5 Crucial Questions You Should Ask Your SaaS Vendor Before Signing a Deal

SaaS applications are getting quite a bit of traction these days. The industry itself is growing, with a CAGR rate of 21% and the global SaaS industry is expected to reach $117 billion by the end of 2022. Whether small consultancies or large multinational corporations, everyone is using and investing in SaaS solutions. That’s one of the reasons why a lot of companies are outsourcing their SaaS software development to application development companies – to get their own solution.

What is SaaS, anyway? SaaS is an acronym that stands for software as a service and it refers to the software provided to users over the internet by third-party vendors. It’s also called on-demand software and it’s mostly used in the context of cloud-hosted applications. Using SaaS solutions is vastly different than the licensing model. Though it has many benefits, such as ease of use, easy upgrades, etc., it also has its problems.

For instance, each new SaaS subscription costs money to your company that needs to be calculated and accounted for. You also can’t cut new deals based on your usage, as scaling is already a standard part of SaaS contracts. Your company has to keep up with all the different SaaS tools. You also have to track how much and what data is being used by these applications.

Hence, it is crucial to choose a software outsourcing company that adheres to certain SaaS principles that can guarantee a satisfying experience. That’s why it is important to research and understand the vendor practices for the SaaS approach to work properly.

Here are a few key points you should think about before signing a SaaS contract, along with the questions you should ask.

1. Security

How does the SaaS software development vendor handle onboarding and offboarding of new customers? Manual addition and deletion of records have added costs, including hiring staff and daily maintenance of the log record.

Do you need to maintain several databases for all the different kinds of software you use? That can be a tiresome process and an unnecessary expense. To counter this, you need a single sign-on (SSO) process integrated into your system. When leaving the organization, automatic deboarding of clients is the best way to go.

Standards:

  • What are the vendor’s regulatory standards?
  • Do the vendor’s standards comply with the standards required by your company, such as HIPAA and GDPR compliance?

Application Security:

  • What are their application security policies?
  • Are the application security policies documented and provable?
  • Does it have all the key points, such as physical security, data classification, and loss prevention?
  • What level of network security do they provide? What sort of testing do they do to check their network security?

Outsourcing:

  • Does the software vendor outsource any work to other vendors?
  • What are the data sharing and protection policies in such cases?

Datacenter Protection:

  • What are their data center protection techniques? Are your servers protected from environmental factors (fire, rain, etc.)?
  • Are visitors logged when entering the data center facility?

2. Support

What kind of support does your application vendor provide? There are plenty of things that can go wrong when using third-party software, so you’ll always need 24/7 elite support to avoid conflicts. For that, you’ll need to know how they handle the call flow, what their on-call hours are, and what sort of troubleshooting can they do remotely.

Logs:

  • Are they handling and preparing diagnostic logs and audit records?
  • Are these documents parts of the SLA agreement? Is the same log provided to you for review?

Backups:

  • How frequently are they backing up their software? Most vendors provide night backups along with weekly testing.

Disaster Recovery:

  • What about disaster recovery and business continuity during the time of natural disasters? Disaster recovery should be a part of SLA and SLO contract requirements.
  • Are active redundant sites available?
  • How long does it take for failover services to start?
  • When can testing be scheduled for this? Are they annual, like in most companies?

3. Integration and Scalability

Obviously, all SaaS platforms you hire will undoubtedly work alongside all of your other digital solutions. That’s why you’ll have to learn everything about those platforms’ possibilities to connect with your existing infrastructure, be it new applications, custom tools, or legacy software.

The vendor should also make it clear how the transfer of data takes place, be it through CSV files, or by using web services. These should be seamless data exchange between different software solutions.

Scalability:

  • Is the system scalable? As your business grows, the platform should also scale as per requirement.
  • What is the most substantial/recent scaling they have done?
  • Will your business need more scaling than that? If yes, does the vendor require special provisions for your growth?

4. Upgrading

Make sure that updates don’t cost you anything. This is an inherent feature of all SaaS platforms, but it’s better to be safe than sorry. Also, make sure that they don’t require your staff to be trained again or, if they do, that they only require it in exceptional cases. No impact, along with new features, should be the goal for SaaS upgrades.

Upgrades:

  • What sort of upgrades to the service are available?
  • Are the upgrades automated?
  • Will the vendor take suggestions from the client and use that for future upgrades? Once you’ve chosen a trusted SaaS vendor, it’s important to critique their work through reviews.

5. Cost

Costs are always a primary concern and source of conflict. That’s why you have to take a close look at the contract and its provisions. Analyze what features are covered, if there are usage limits, and how it all compares to other products in the market. Pay special attention to hidden fees that might not be too publicized (like extra fees when scaling up).

Costs:

  • What is the cost per user?
  • How many people can use the subscription?
  • What are the charges for different types of subscriptions?
  • What would be the cost if going into the higher band upgrade/crossgrade?

Features:

  • What are the features available on a particular subscription?
  • What sort of package you’re getting?
  • What are the terms discount, loyalty discount, volume discount, etc.?
  • Is grandfathering available?

Payment Options:

  • What sort of payment do they accept, cash or revenue?
  • And if you’re working with a big brand, what other facilities can they provide?
  • What type of promotions do they have?

Conclusion

Have a meeting with your vendor to clear all these questions. Not having prepared satisfying answers to these questions should raise red flags. If your vendor doesn’t have these answers in their info brochure, raise these points separately.

SaaS products have many benefits, such as easy deployment, automatic upgrades, and less risk. It is a great option to reduce the stress of constantly having to learn new technologies every time there’s something new in the market.

Employing the right vendors and getting all the necessary information from them will go a long way in ensuring the efficiency of your current processes. The whole purpose of SaaS solutions is to have a better user experience and reduce operational costs. But you’ll only get that if you find the right partner, something you’ll easily do with these questions by your side.

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