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Evaluate Commercially Available SaaS Applications

September 17, 2020
Volodymyr Rudyi

When manufacturing companies seek to improve their efficiency and profitability by eradicating internal friction, investments in technology to advance digital transformation usually rank pretty high.

That said, at a high level, executives can build their own technology or subscribe to technology in the form of a software as a service (SaaS) agreement.

Approaches and End User Evaluations

When leaders of small- and mid-sized manufacturing companies evaluate commercially available SaaS applications, they usually take one of two approaches:

  1. Purchase a license -- In this scenario, one or more stakeholders reads up on the available software, listens to pitches from the vendor’s sales team, and purchases a license. Many times this approach leads to disappointment.
  2. Trial a license -- Generally the better way to understand if this particular SaaS investment makes sense for your company, a trial helps you evaluate how well this particular platform integrates with your other existing technology investments.

When trialing a SaaS option, ask for feedback from different departments. Keep your onboarding very brief, as there’s really only one fundamental question to address at this stage:

Do your end-users feel comfortable performing routine tasks in this SaaS application?

If users have any hesitation at all, there’s no need to pursue it further. Abandon the trial.

Path for Extending and Customizing

Granted, there’s still quite a bit of road ahead to properly evaluate this SaaS investment:

  • Can this SaaS application be extended and customized?
  • How well can this SaaS application be integrated with your existing technology infrastructure?

Be extremely wary of investing in SaaS applications that prevent data imports, data exports, and data extraction.

To dig deeper, find out:

  • What kinds of APIs are available?
  • Are all of your desired functions of the API available in the system?

Often SaaS vendors don’t want data to leave their systems - many times for self-serving reasons.

Issues with Pricing and Ability to Self-Customize

When you loop in your finance executive, you’ll certainly want to find out about the SaaS vendor’s billing model and licensing costs:

  • How are pricing tiers determined?
  • What kind of seat capacity exists at different pricing tiers?
  • How long is your required commitment? Month-to-month? One year minimum?

If you’re really planning ahead, try to identify some of the most potentially painful gotchas, and find out how flexible your SaaS vendor is with allowing you to extend their application.

For example, perhaps you’ll have API access, but there’s no documentation. So, you’re forced to hire their consultants or choose from a very limited pool of very expensive talent.

Or if you’re required to hire the SaaS vendor for all customizations, besides the expense, what kind of turnaround times can you expect? Will their sale process or quotations slow you down? What kinds of turnaround time can you expect for the implementation of customizations?

Because it’s not uncommon for days to turn into weeks of delay, be sure to factor all of this into your decision-making process when evaluating commercially-available SaaS applications for your manufacturing company.

Is your manufacturing company investing in technology to advance digital transformation? Share your comments below.

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