Buying SaaS – A Bifocal Vision
If you’re buying Software as a Service (SaaS), you’re probably spending a lot of time looking at what the software does. You might even have a requirements checklist developed by Purchasing or acquired through a combination of your wish-list and IT requirements. This approach is standard procedure because you should base your decision on a vendor that can fulfill not just your needs, but your entire organization’s needs.
As a software industry veteran, who has collaborated with many buying coalitions throughout many decision processes, I’ve accumulated a few crucial observations.
My leading conclusion is that requirements change—a lot— throughout the buying process. This scenario is particularly accurate for early-stage software or new variations to existing software. As vendors showcase their solutions, a buyer sees additional use cases or problems that she can solve. So over time as a buyer sees different products from different vendors, this process will impact the final requirements list.
In many instances, it will morph the requirements list into a features list, which is very limiting. A strong SaaS player has rapid software development cycles and is always iterating their products with continuous improvements to meet the needs of their customers. Therefore, a product a customer sees in the buying journey will not be the product that will be implemented—the vendor will have extended and expanded the product. Ultimately, this is good for the customer because the implemented product is an improved version and often will meet not only today’s needs but also future requirements.
Instead of solely using a feature list approach, the buyers that express the most satisfaction with their choices use a bi-focal approach to evaluate their SaaS partners. This approach has both a short-term and long-term perspective.
Here the goal is to assess which vendor is most likely to meet your immediate needs, with a plan to deliver for the long-term.
When you’re reviewing the features and functionality of the software, you should also be evaluating the philosophy and approach the SaaS vendor is using.
This is a better indication of where they will be in two to four years. In the example of scale, if they have a feature, how well does it work for 100,000 users as well 100. If you’re going to ask non-technically-savvy employees to use the solution, what is the overall user interface (UI) flow—is it intuitive, or complex? That is an excellent indication of how the vendor will build new features.
So, pick the partner that has the capabilities you need today. Yet, beware that many vendors will have feature checklists, but will not have designed them or implemented them to align with a coherent product philosophy, or to scale.
Another part of the short-term view is the people. Meet as many of the staff that will be servicing and supporting you as a customer. Any business relationship is a people relationship as they influence how the software will be built. Understanding this factor is key to projecting the long-term arc of the SaaS solution.
You are most likely making a three to five-year decision for your SaaS vendor, so you are not just buying today’s functionality. You are also selecting the future functionality, along with the services and support that they will deliver over that period. As a result, the most critical element from a buyer’s perspective is to be clear on the business outcomes you will require over the three to five year time. Admittedly, you can never anticipate the future with 100% accuracy. But you should have a general growth strategy and ideas on the required capabilities in platforms needed to support your growth.
A simple example is a 20,000 employee company that initially scopes a solution for 1,000 users. It is then reasonable to consider whether your partner will scale. Which should include not only size – can the software platform support 20,000 users, but also geography, languages, global compliance, and support services.
So, the long-term vision should be one of your overall requirements. It should be your north star as you evaluate your SaaS partner. “Will this SaaS platform be my partner for today, and also my partner for tomorrow?”
In summary, a bi-focal approach to selecting a SaaS solution yields much better value over time. A near-term focus on product philosophy and people are the best indications of the long-term value that will be created. Balance the two questions:
- Will the platform meet your minimum required capabilities today?
- Does the product strategy and philosophy meet your business objectives and strategy in the long term?
For more guidance on how to create a business use case and buy the right technology for your organization, read How to Secure Funding for a Workforce Communications Platform.