Quote:
"I have this software that I've been using forever for my core business. My entire thing is dependent on this one. Now the vendor, who is someone I know from a long time and really like a lot, has come to me and said I should ditch my own IT infrastructure and move to a SaaS model. It will be much better, automatic updates, great uptime and all that. So I went to my own IT and told them to prepare for this SaaS model, and they told me it is a very bad idea, because then I will lose all control over my data, backup, everything, and even for service, our own IT team wont be able to do anything because everything is with the service vendor. And if the internet goes down, so does the business. Right now, we don't expose our core business data to the internet at all.
Now I am totally confused. What should I do? "
Answer (our perspective):
As a business owner, there are 3 key factors that you should think of:
A. What is going to be easier for me to live with, on a day to day basis?
B. IF things go really, really wrong, how soon can we get back on track?
C. How much does each option cost?
How do we convert these questions and apply them to the technical evaluation process?
- Convert each question to technical metrics that both options can understand and unambiguously respond to.
- Assess how important each metric is - in absolute and relative to the others. Ensure that you assign a score to each metric such that it totals to 100. This is a very good way to understand everything in context.
- Score each response that you get and see which solution makes sense. It is better to use scoring scales and uniform score ranges.
We are converting each question to some relevant technical metrics. Please feel free to use this list, and edit/ add as per your need.
A. What is going to be easier for me to live with, on a day to day basis?
Ask your service provider for:
- Uptime
- Service SLAs
- Escalation Matrix
- Automatic Upgrade Frequency
- Automatic Upgrade flexibility
- Training support for new features
- Transaction Processing Time SLAs and actual numbers (I know of a software where every field saving took 30 seconds. Another took 11 minutes to fill up a form which is done manually in about 2 minutes)
Do your own assessment on:
- Functional Fit Adequacy
- Training adequacy for new users and new features
B. IF things go really, really wrong, how soon can we get back on track?
Ask your vendor for:
- Information Security - Certifications and SLAs promised to clients
- Business Continuity Plan
- RTO/RPO
C. How much does each option cost?
Ask your vendor for a TCO Analysis for 1, 3 and 5 years. See how the marginal cost of ownership looks as the years pass. Check for upgrade costs, maintenance costs, staff costs et al. 3 separate TCOs Vs a single 5 year TCO sheet also helps you understand the Return on Investment on the various subscription plans that the software vendor is offering.
This is a good TCO calculator that you can use to get started and understand the concept of TCO.
So there, we hope this has helped reduce the confusion a bit. Remove the technical jargon, and its all just common sense.
This article is contributed by Nidhi Arora, Co-Founder and Director at Topgain Consulting Pvt. Ltd.
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