SAAS Business Model and How it can save businesses money?

A SaaS company is a company that hosts an application and makes it available to customers over the internet. SaaS stands for Software as a Service. This infers that the software sits on a SaaS company’s server while the user accesses it remotely.

A SaaS company maintains servers, databases,
and software that allow the application to be accessed over the internet — most
likely by web browsers. Users can access the software from almost any device.

SaaS customers usually pay a subscription fee—
often monthly — to access the application. Some subscriptions are based upon
how much data needs to be stored, the number of users who will access the
application, or the level of technical support desired.

EXAMPLES OF SAAS COMPANIES

• Customer resource management (CRM) — These applications
  allow SaaS customers to manage customer information and track sales
  through their pipeline.
• Enterprise resource planning (ERP) — This is a
  system of many SaaS applications most suited for big organizations.
• Accounting and invoicing — Some SaaS companies
  focus on billing and invoicing services. Others offer a full range of
  financial tracking and reporting services.
• Project management — Software can help
  collaborators communicate and stay on track.
• Web hosting and ecommerce —  Remote
  servers can handle everything a business needs in its online presence.
• Human resources — SaaS companies can offer
  tools to track employee hours, manage payroll, schedule and manage the
  hiring process.
• Data management — SaaS products can help
  analyze and secure a company’s data.

The Advantages of SaaS

1. It Can Save
You Money

Traditionally,
deploying large-scale business-critical software systems, such as ERP and CRM
application suites, has been a major and costly undertaking. Deploying these
systems across a large organisation can cost hundreds of thousands of pounds.
The time, staff, and budget requirements of a deployment of this magnitude represents
a significant risk and expense for a business of any size, and often puts such
software out of the reach of smaller organizations.

SaaS applications
on the other hand don’t require the deployment of a large infrastructure at the
client’s location, which eliminates or drastically reduces the upfront
commitment of resources. Also, giving prospective customers a chance to try the
software for a limited period before they buy it helps eliminate much of the
risk surrounding software purchase. If a piece of software is only needed for a
limited period then it is only paid for over that period and subscriptions can
usually be halted at any time.

There are of
course no additional hardware costs as the processing power required to run the
applications is supplied by the cloud provider. There are also no initial setup
costs as applications are ready to use once the user subscribes. Updates are
automated; whenever there is an update it is available online to existing
customers, often free of charge. No new software will be required as it often
is with other types of applications .

SaaS applications
are usually licensed with a usage-based transaction model, in which the
customer is only billed for the number of service transactions used. Or,
there’s the time-based subscription model, in which the customer pays a flat
fee per user for a particular time period such as a month or a quarter – and is
allowed unlimited use of the service during that period.

2. Multitenant
Architecture

All users and
applications share a single, common infrastructure and code base that is
centrally maintained. SaaS vendor clients are all on the same infrastructure
and code base, so vendors can innovate more quickly and save the valuable
development time previously spent on maintaining numerous versions of outdated
code.

3. Easy
Customisation

Each user can easily
customize applications to fit their business processes without affecting the
common infrastructure. These customizations are unique to each company or user
and are always preserved through regular upgrades, with less customer risk and
much lower adoption costs.

4. Get Better Global
Access

You will get
improved access to data from any networked device and at the same time make it
easier to manage privileges, monitor data use, and ensure everyone sees the
same information at the same time. All users will have the same version of
software which allows for easier collaboration.

SaaS is
accessible from any location so rather than being restricted to installations
on individual computers, an application can be accessed from anywhere with an
internet enabled device.

5. It will
transform your IT Department

SaaS has the
potential to transform the way your IT department relates to and even thinks
about their role as providers of computing services to the rest of the
business. With SaaS, the job of deploying an application and keeping it running
from day to day – testing and installing patches, managing upgrades, monitoring
performance, ensuring high availability, and so forth – is handled by the
provider. By transferring these responsibilities to the provider, your IT department
can focus more on high-value activities that align with and support the goals
of your business. The department will have an opportunity to contribute to the
success of your business more directly than ever before.

6. Ease of
Management

SaaS applications
are completely managed by the vendor or SaaS hoster; in fact, the
implementation of management tasks and responsibilities is opaque to the
consumer. Service-level agreements (SLAs) govern the quality, availability, and
support commitments that the provider makes to the subscriber.

7. Cross device
compatibility

SaaS applications
can be accessed via any internet enabled device, which makes it ideal for those
who use a number of different devices, such as internet enabled phones and
tablets, and those who don’t always use the same computer.

BEST PRACTICES FOR CHOOSING A SAAS COMPANY

SaaS companies work very hard at making their applications easy
to use for users. And they try to make it just as easy to purchase their SaaS
products. Perhaps too easy. Slow the process down and consider some best
practices in choosing a SaaS partner for your business.

• Find out what happens when you are no longer a
  customer. Can you get your user data back in a standardized format easily?
• Test customer support. Just how good is it
  when you’re a paying customer?
• Get as much training and migration help as
  possible. Or use it as leverage in negotiations.
• Find out what is the backup plan. Nothing is
  bulletproof. There will be downtime. Have a plan for when the system is
  unavailable.
• Look for data vulnerabilities. Speaking of
  vulnerability, does the SaaS company offer strong defense against hackers
  and data breaches?
• Understand the prices. Look for hidden fees
  and what kind of usage will trigger a higher subscription tier.
• Make sure your systems are compatible. The
  promise of SaaS is functionality on any device used anywhere. But does the
  application really work with all browsers or phones?

SaaS companies can provide needed business
services at a low cost. Due diligence will help ensure the user experience
matches expectations and promises.

ONCE YOU FIND A SAAS COMPANY

Even if you find the perfect solution, there
is a chance you won’t use it to its full potential. For complicated software,
there is often a learning curve. There are a number of steps to take for each
new tool your company uses.

• Utilize educational materials — Most SaaS products have tutorials, knowledge bases and other material to help users get the most out of the product.
• Speak with the onboarding team — The next level is to get on a call or video conference with a rep(s). Make sure key members of your team are there, too.
• Consider third-party setup — Some SaaS tools are so complicated, having an outside contractor set everything up is ideal. The company may also offer this service.
• Get the team onboard — The right tool paired with education and ample communication will make adoption easier, but all change takes effort to make it successful.
• Re-evaluate use at regular intervals — After a few months, it’s a good idea to see if the software is doing what you hoped it would. This is a good, regular practice for every tool your company uses.

SaaS companies can provide needed business
services at a low cost. Due diligence will help ensure the user experience
matches expectations and promises