As organizations become more and more focused on their core competencies, Software as a Service is increasingly gaining acceptance as the method of choice for the IT needs of companies which do not have internal competencies in IT. However, even today, most organizations, are hesitant to take the leap of faith required to adapt SaaS solutions, as the perceived benefits may be far less than the perceived risks. In this article, we will look at some of the factors that influence decision making in organizations when it comes to SaaS. This will hopefully benefit SaaS vendors and give them some insights on how to address the resistance faced during the sales process, and convince organizational buyers to switch to a SaaS model.
- Highlight strategic benefits: Often, SaaS vendors highlight the economic benefits of operating out of the cloud, while the senior management of the organization would be worried about the strategic benefits. SaaS solutions have several strategic benefits which often get ignored due to an excessive focus on cost savings. For example, since the software, the data storage and the computing processes are all done remotely, the ease of scaling up or down is much higher for a SaaS model. Thus, for a cash intensive high growth business model, a SaaS solution is ideal as they can pay per use and scale fast to support the growing business.
- The People Angle: Good IT professionals prefer to work for IT companies and not in the in-house IT department of traditional non-IT businesses. Thus, these industries often suffer from skill shortage when it comes to hosting and maintaining IT applications in-house. A SaaS model is a great way to bridge this skill gap as you will have experts on database and server management managing your SaaS servers and databases, albeit remotely.
- Have a customized selling approach: Decision criteria for SaaS solution adoption among small and medium businesses would be very different from that of a big corporation. Similarly, a player in a highly regulated industry such as banking or insurance would be more worried about issues such as data security whereas a player in a high response industry such as airline ticketing would be more concerned with processing speed and server uptimes. Therefore, a customized selling approach which is able to address the specific concerns of the buyers and increase their faith in the benefits of adapting the SaaS model is likely to be more successful rather than a standard pitch for all types of potential clients.
- Address subjective risks and not just technical risks: While most SaaS vendors focus on addressing technical risks such as network security, data integrity, authentication and authorization mechanisms and so on, many often fail to address other subjective risks perceived by the non-technical members of the buyer organization. Technology adoption decisions are not always evaluated on technical risks alone. Organizational dynamics such as the top management’s risk taking ability, the organizational culture etc. are all aspects that heavily influence technology purchase, and hence it is important to address risks and worries around these issues as well. For example, if an organization is moving from a legacy system to a SaaS model of a new software, the vendor may need to focus on their willingness to hand hold during the change management process, as much as he focuses on the data security offered by the SaaS model.
- Provide references from the same industry: One of the best ways to address the perceived risks of a potential buyer, is to offer references of early adopters who are happy with the SaaS model. Ideally, these should be from the same industry and roughly with the same business size as that of a potential buyer. No amount of reassurances from a vendor will replace a good testimonial from an existing customer who is convinced about the services and has not faced any issues with regard to data such as security, availability, integrity or confidentiality.
Have your organization evaluated a SaaS solution? What were the criteria that you used to evaluate your purchase decision? Or are you a vendor of a SaaS solution? How do convince potential clients? Do let us know in the comments section.