What to consider when evaluating SaaS options

What to consider when evaluating SaaS options
May 9, 2022  |  BY

Anyone who’s purchased enterprise software understands the potential rewards and risks involved in the decision.

On one hand you’re hoping your choice delivers what’s been promised: More efficiency, higher productivity, increased cost savings.

One the other hand, in the back of your mind, no matter how confident you may feel in the choice, you wonder if it might end up to be a complete financial and business disaster.

We never like to bring up the negative, but the reality is that purchasing decisions can go wrong – horribly wrong. Make a bad choice and not only will you fail to achieve the key goals agreed upon at the company off-site, you’ll waste a lot of dollars in the process.

Which brings us to SaaS (software-as-a-service) applications. With the continuous growth of this category, IT leaders can legitimately feel overwhelmed with the possibilities. We felt it was timely to go over what to consider when making a purchase decision.

Begin with the fundamentals: Why do you prefer one SaaS app to the others in the marketplace? Do your strategic drivers match up with that specific offering?

This is key, since how you’re approaching the evaluation can change based on the “why”, which can include “I want to cut costs”, “We need more operational efficiency”, “Data is siloed and we can’t extract value”, and other objectives.

Exploring the rationale for the purchase is essential, as many organizations make expensive purchase decisions based on arbitrary thinking. To avoid a costly choice, go beyond the operational issues that may be driving the need for the software and consider the aspirational drivers (like digital transformation) you may be ignoring.

Be sure to focus on your business requirements. Don’t ignore what you need from the software simply because you fell in love with a vendor’s list of features. To keep yourself looking in the right direction, follow a strict process for software selection rather than improvising along the often bumpy path.

For your process, use a template that makes it easy to document your choices, which in turn makes it easy to share them with stakeholders. This allows everyone to get aligned. They know what happened and why it happened. You eliminate any ambiguity and perception that you’re not following through on tasks.

As part of this process, narrow the focus on business requirements to ones that will truly drive value for your unique position in the industry. Otherwise, if you give the vendor dozens of requirements, they’ll choose based on what’s best for them, not necessarily for what’s in your best interest.

What we’re talking about here is due diligence. Those leading the SaaS selection must ensure that the vendors they’re evaluating can meet business needs today and well down the line. It’s surely stating the obvious but it must be said: Your organization’s requirements will change, so choose a vendor that can adapt to shifts within your company and throughout the business landscape.

Accordingly, as part of your evaluation, discover as much as you can about how the vendor provides service. What it’s really like to work together? Talk to some of their customers and partners to get a sense of their integrity, their style of communication. What do customers like best about them? What’s their biggest gripe? Which features and capabilities could use some improvement? Are they responsive or do they take four days to reply to requests?

As we’ve illustrated here – and as most of us know – the vendor selection process involves a lot of work. To get it right you need multiple perspectives. Put together a diverse evaluation team from various backgrounds, who can help parse through presentations, buyer reviews, testimonials, references, and other research.

But the most thorough, process-oriented evaluation is worthless without user testing. And not merely testing during the evaluation, but getting your people involved at the beginning of the selection period.

All that wasted money we mentioned at the beginning of this article? It’s often due to employees who simply don’t like the software. It doesn’t fit into their workflow, they don’t adopt it, and you’re left with a big pile of expensive nothing.

For testing, create a small team of individuals that represent all of the key functions that will be using the SaaS software. The feedback you receive from them is often the bulk of the reliable information you need to make the right decision.

Real experiences from real people can’t be overlooked in the decision, especially if you’re replacing a legacy application with a SaaS application. There will naturally be ramifications for the people who’ve been at the company more than a week.

Don’t rush the SaaS choice. By taking your time and doing a thorough analysis, your odds of success improve exponentially.