After Hours optimize

10 keys to a winning SaaS relationship

To get the most benefit from a SaaS deployment, you need to be informed and proactive in your vendor relationship.

Finding the right SaaS (software-as-a-service) provider can be energizing and value-added -- especially when you negotiate a well-conceived contract for service that ensures open communications and a cooperative working relationship. But there are also more subtle benefits that aren't always captured in the contract or in typical daily work. When these benefits are realized, your SaaS relationship can soar even further. Here are 10 things that companies using SaaS vendors can do to turbo charge their SaaS services.

1: Test disaster recovery with your vendor

Most SaaS vendors now describe their disaster recovery capabilities in their contracts. But if you are moving a mission-critical application to a SaaS provider, you should also ensure that the provider's disaster recovery provisions mesh with your own plan. You should do two things in this area:

  • Integrate the vendor's DR plan into your own.
  • Have an agreement with the vendor that the two of you will test this DR plan integration and execution on an annual basis to make sure that it works in practice.

2: Conduct regular SLA meetings

Although most SaaS vendors do not have written SLAs (service level agreements) in their boilerplate contracts, many IT departments are adding SLAs as part of contract negotiations. But the work shouldn't stop there. SLAs (like almost everything else in IT) are moving targets. They change with the demands on the business. Accordingly, IT should also specify (as part of the contract) that the SaaS vendor and IT meet quarterly to review SLA performance and to see whether any changes in SLAs are needed to keep pace with the business.

3: Have a clear understanding about hiring

IT and SaaS personnel (and managers) get to know each other well. It isn't uncommon for SaaS vendors to hire someone away from IT, or vice versa. Some companies negotiate a clause into their contracts with SaaS vendors that requires a cash settlement for any employee who is hired away or that limits hiring under certain conditions. Everyone should be clear on hiring policy upfront. This includes letting employees and managers know.

4: Make integration modular

Some SaaS relationships seem too good to be true, but change happens and there could come a day when you need to separate from your SaaS provider. When you "dock" onto a SaaS service, make sure that the degree of integration between your internal systems and the SaaS system are sufficiently modular so that you can easily disconnect if you need to.

5: Participate on SaaS vendor committees

SaaS providers have many clients. That's why it's important to participate actively in SaaS user committees. The committees provide input to the SaaS vendor on which improvements and enhancements it should make. This is one way you can ensure that your voice will be heard regarding upgrades you would like to see the SaaS provider make to benefit your business.

6: Protect your intellectual property

Many SaaS providers provide custom services that allow their clients to develop special applications. The SaaS provider might do the coding. But if the idea you are developing is unique and competitively advantageous to your business, you might also want to ensure that what you are paying for is exclusively your property and is not be shared with other clients. This preclusion of sharing should include not only the custom product that is developed, but the ideas behind that product.

7: Consider collaboration in custom work

The other side of custom development is when you want something custom from the SaaS provider that you pay for, but you don't particularly care if it is shared with others. In this case, you can help yourself by negotiating with the SaaS vendor for an agreement where you will pay for the upfront development -- but with each new sale of what is developed to another customer, you will get a portion of your money back until you have recouped all your R&D cost. The strategy "amortizes away" your upfront costs, eventually giving you the custom work for free.

8: Perform a proof of concept

SaaS might look attractive on the outside, but you never really know how it will serve the business until you see it in action. Always perform a proof of concept (POC) with the SaaS service before inking a more permanent agreement. If for some reason the POC doesn't work, you're still free to walk away without further investment.

9: Carefully vet the SaaS provider for security

Your own auditors and/or regulators will demand this. The SaaS provider should be able to fully meet all security regulations that your company is subject to. Furthermore, if you are using this SaaS vendor as a platform to communicate with other business partners, you should ensure that you are able to set unique security permissions for your information down to the level of a single individual in a any given organization you deal with. Finally, take steps to ensure that your data is effectively partitioned and protected from all accesses that fall outside the ones that you have designated.

10: Write in a change-of-management provision

Some SaaS relationships start out great, then sour when the vendor is acquired by another company with a different culture. Technology company acquisitions happen every day. Be sure to leave yourself an opt-out in the contract, in case your vendor undergoes a change of management control that doesn't work for you.

More resources

Automatically sign up for TechRepublic's 10 Things newsletter!

About

Mary E. Shacklett is president of Transworld Data, a technology research and market development firm. Prior to founding the company, Mary was Senior Vice President of Marketing and Technology at TCCU, Inc., a financial services firm; Vice President o...

5 comments
frank.bruno
frank.bruno

Great article! I would advocate for a written repeatable process for safely onboarding new SaaS technology. Now google "SaaSProtect"! Sorry for my shameless plug, but we have been working on this problem since the early 2000's. The bottom line for any company entrusting their mission critical data to the cloud is to have a contingency plan that they can execute independently of the SaaS provider. Consider the sudden cessation of business, where everything goes dark and the provider is non-responsive. Do you think their DR plan is going to work? Despite all of the testing, if the provider disappears, even the best laid plans will never be executed. That is why Subscribers need to consider this before they sign up. The plan should include a neutral trusted third party that can enable the contingency plan too. Testing data recovery procedures and application continuity with the neutral third party is really the only sure fire way to know that your contingency plan will work too. Lastly, consider this; such a contingency plan that is underwritten and supported by a neutral third party like Iron Mountain is a good way to overcome the risk objection to doing business. If you want practical, useful information on the subject, please let me know.

dlovep
dlovep

When people don't like the IT terms like FTP they called it Cloud Storage. sAAs, Cloud computing is another same things as Website and server, the worse thing is none under your control, other than Service Agreement when the company still operate, when they sold or under auction by other company, your company basically doom.

HAL 9000
HAL 9000

Like being able to cleanly get your Data out including the Backup when the SaaS Provider you hire is taken over by the company you rejected as unserviceable. It's one thing to recover your Data and then have to frantically look for another SaaS Provider when your current SaaS Provider is taken over by another company but you need to remember that they still have a Backup of your Data and you need to ensure that you own that Backup and that it can not be used by the new Owner to make money for themselves. Good luck with that as the Agreement that you negotiated was with the old provider not the new one and getting the Old Agreement Enforced is marginal in most cases. Of course the SaaS Provider you hire going broke and the Receiver seizing all of your Data and selling them to the Highest Bidder is always an issue that needs to be thought about but when it happens there is nothing that you can do to stop your Data being offered for Auction by the Liquidator. :D Col

TsarNikky
TsarNikky

It is bad enough having to "deal" with Saas, don't add "the cloud" to further complicate the relationship. Now, instead of having a two-sided relationship, you have a three-sided relationship. (Let the finger-pointing begin.)

HAL 9000
HAL 9000

They are not in control when a Receiver is appointed and it's the Receivers Job to recover as much money as possible. That can include holding the different companies Data Hostage and selling it to the Highest Bidder. it's all very well saying one thing that it's impossible to enforce in practice or recover any restitution for. ;) Col