SaaS, or Software as a Service, is a relatively new idea involving many facets, and it is because of this that businesses often struggle to grasp the core concepts. And while succeeding with SaaS can be very rewarding, making the change to a SaaS product requires taking the proper steps. Here are some things to consider before fully committing to a SaaS business model.
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Ensuring Sufficient Cash Flow
One of the first steps in making the switch to a SaaS product is to determine whether your company has adequate cash flow to cover all of the expenses that will be involved. Unlike with a physical product, where a majority of the costs can be estimated up front, developing a SaaS product can use up unforeseen amounts of capital, and it is all too common for businesses to drift into the red before seeing any returns on their product. After all, deploying a software as a service means that there will be the necessity for continual improvements and updating. Before transitioning to a SaaS model, make sure that you have adequate capital to deal with development and deployment issues.
If you have a product that is already being sold, then the transition into SaaS may seem relatively simple, but this is not always the case. In order to move your product to a service, you will need to consider where the service will be hosted, what the protocol for adding subscribers will be, as well as establishing a standardized billing and pricing system. In addition, monitoring the safety of the subscriber’s information can be a major complication that will need to be addressed, as a leak in user information could be catastrophic.
As technology increases, more and more companies are switching to SaaS platforms and this is causing certain areas of the market to become flooded. Before moving your product to a service, it is wise to do some market research to ensure that you will be able to gain enough subscribers to generate revenue. By analyzing the market, you can better identify the strengths and weaknesses of competing companies and this will offer insight as to the obstacles that your business may encounter during the transition.
Customer Service Concerns
Customer service is a priority for any business, but many companies fail to recognize the increase in customer service related areas that are needed when implementing a SaaS. With a subscription service, it is important to understand that there might be more questions and issues with the service than with a purchased product. When any changes to the service are made or there is an interruption in service, there will be an influx of inquiries and these need to be handled efficiently. Therefore, you must maintain an adequate customer service staff to address any product related issues.
As it has been shown, there are a number of steps to consider when trying to make the change to a SaaS model for your product. It is vital that your business has adequate cash flow so that any issues that are encountered can be remedied without drifting into the red. In addition, you will need to make sure that the product is viable for transitioning into SaaS by assessing the capabilities of the service, as well as the competition levels in the market. Furthermore, it is crucial that the number of customer service representatives is increased to handle the influx of questions regarding the new service, or by enabling self-service functionality subscribers can use to answer all basic questions. By taking all of these aspects into consideration, you will help to ensure that your business can make a seamless transition into SaaS.