Why SaaS? 7 Benefits of Cloud vs. On-Premise Software
In this post, you’ll learn what SaaS is, who it’s for, and, for those of you considering the SaaS route for sales order management – the 7 reasons why SaaS makes sense for your business.
What is SaaS?
Software as a service (SaaS) is transforming information technology today. Gartner defines SaaS as “software that is owned, delivered and managed remotely by one or more providers. The provider delivers software based on one set of common code and data definitions that is consumed in a one-to-many model by all contracted customers at any time on a pay-for-use basis or as a subscription based on use metrics.”
In effect, SaaS is a leased software maintained by its creator and not hosted on your premises. SaaS apps run in the cloud.
Who uses SaaS?
Industry analyst Forrester Research notes that SaaS adoption has so far been concentrated mostly in human resource management (HRM), customer relationship management (CRM), collaboration software (e.g., email), and procurement solutions, but is poised to widen.
Today it’s possible to have a data warehouse in the cloud that you can access with business intelligence software running as a service and connect to your cloud-based ERP like NetSuite or Microsoft Dynamics. The dollar savings can run into the millions. And SaaS installations are often installed and working in a fraction of the time of on-premises deployments—some can be ready in hours.
Sales and marketing people are likely familiar with Salesforce.com, the leading SaaS CRM, with millions of users across more than 100,000 customers. Sales is going SaaS too, with apps available to support sales in order management, compensation, quote production and configure, price, quoting, electronic signatures, contract management and more.
Thinking of moving towards a SaaS solution for your sales process? Here are 7 reasons you should.
1. Lower cost of entry
With SaaS, you pay for what you need, without having to buy hardware to host your new applications. Instead of provisioning internal resources to install the software, the vendor provides APIs and performs much of the work to get their software working for you. The time to a working solution can drop from months in the traditional model to weeks, days or hours with the SaaS model. In some businesses, IT wants nothing to do with installing and running a sales app. In the case of funding software and its implementation, this can be a make-or-break issue for the sales and marketing budget, so the lower cost really makes the difference.
2. Reduced time to benefit/rapid prototyping
In the SaaS model, the software application is already installed and configured. Users can provision the server for the cloud and quickly have the application ready for use. This cuts the time to benefit and allows for rapid demonstrations and prototyping.
With many SaaS companies offering free trials, this means a painless proof of concept and discovery phase to prove the benefit to the organization. Whether in demo mode or actually going live, intuitive interfaces for order writing and rapid uploading of electronic catalogs and customer lists give sales people immediate benefits without long wait times or steep learning curves.
3. Pay as you go
SaaS software gives you the benefit of predictable costs both for the subscription and to some extent, the administration. Even as you scale, you can have a clear idea of what your costs will be. This allows for much more accurate budgeting, especially as compared to the costs of internal IT to manage upgrades and address issues for an owned instance.
4. The SaaS vendor is responsible for upgrades, uptime and security
Under the SaaS model, since the software is hosted by the vendor, they take on the responsibility for maintaining the software and upgrading it, ensuring that it is reliable and meeting agreed-upon service level agreements, and keeping the application and its data secure.
SaaS has been building its case for rapid user acceptance and training for years. In 2014, an author at IT World Canada quotes the 2009 report “The ROI of Software-As-A-Service,” where Forrester noted that: “SaaS solutions typically offer seamless, automatic, frequent upgrades as part of the ongoing subscription charge. Because these upgrades happen more frequently and therefore incrementally than on-premises solutions, they typically have significantly reduced testing and end user acceptance and training costs.”
While some IT people worry about security outside of the enterprise walls, the likely truth is that the vendor has a much higher level of security than the enterprise itself would provide. Many will have redundant instances in very secure data centers in multiple geographies. Also, the data is being automatically backed up by the vendor, providing additional security and peace of mind. Because of the data center hosting, you’re getting the added benefit of at least some disaster recovery.
Lastly, the vendor manages these issues as part of their core competencies—let them. Save your IT staff time for work on the systems they know best.
5. Higher adoption rates
According to Salesforce.com, because the software is accessible via familiar web browsers, SaaS apps tend to have lower learning curves and higher adoption rates. This can be especially significant given the high cost of on-premises software development and implementation, vs. the low cost of entry for SaaS. No one want to invest a lot of money in custom developed software or off-the-shelf software that users don’t care to adopt. With sales, it’s vital to have an intuitive order writing application that users are comfortable with. Sales people want to be in the field selling—not in training.
6. Integration and scalability
Most SaaS apps are designed to support some amount of customization for the way you do business. SaaS vendors create APIs to allow connections not only to internal applications like ERPs or CRMs but also to other SaaS providers. One of the terrific aspects of integration is that orders written in the field can be automatically sent to the ERP. Now a salesperson in the field can check inventory through the catalog, write the order in front of the customer for approval, send it and receive confirmation, all in minutes.
And as you scale with a SaaS vendor, there’s no need to invest in server capacity and software licenses. Simply adjust the subscription. Click here for more information about how to evaluate a SaaS vendor.
7. Work anywhere
Since the software is hosted in the cloud and accessible over the internet, users can access it via mobile devices wherever they are connected. This includes checking customer order histories prior to a sales call, as well as having access to real time data and real time order taking with the customer. For road warriors, the ability to access the software and data when they need it can change the nature of a sale.
The SaaS market continues to grow quickly. In fact, in its report “Forecast: Software as a Service, All Regions, 2010-2015, 1H12 Update,” Gartner predicts the market to be $22.1 billion globally by 2015, up from $12.5 billion in 2011. While much of this growth will be the continued adoption of infrastructure such as CRM and ERP, point solutions will continue to emerge to fill gaps in the sales and marketing continuum.
Do you have a SaaS question? A tool you want to recommend, or a SaaS story to tell? Share it here. If you want to know how to evaluate a SaaS vendor, check out this post.