Contact us anytime to know more — Amit A., Founder & COO CISIN
SaaS usage rates are three times faster; estimated as being used by 70% of business apps currently with usage predicted to hit 85% by 2025 according to one researcher's estimations; according to another researcher the cloud market surpassed non-cloud for the first time ever in 2020 and will double by 2025.
Cloud technology continues to flourish, so your business should seriously consider outsourcing SaaS services for continued success.
Here you will learn more about its challenges, benefits, costs and limitations when outsourcing SaaS.
What is SaaS (Software as a Service)?
Software as a Service (SaaS) offers typical customers access to mobile applications under subscription or pay-per-use models.
Vendor-managed apps allow customers to generate data in an efficient and seamless fashion; data generation services provided over the Internet reduce complexity while users don't need to manage hardware and software as part of a complex experience.
This list can help you better comprehend which mobile apps fall under the SaaS category.
SaaS Features and Characteristics
SaaS can be understood by comparing it to a bank. A bank provides a reliable, secure and efficient service while protecting the privacy of each customer.
SaaS is the same.
Saas helps you use your resources more efficiently. SaaS will help your business improve its customisation, reduce costs, and connect better with those who are important.
This is achieved by the application through four SaaS key features that can be customized.
SaaS Characteristics
SaaS Multi-Tenant Architecture
Multi-tenancy architecture is a system where all SaaS vendors and their clients share a common codebase and infrastructure that is centrally managed.
This architecture allows vendors to innovate faster, as they don't have to spend real time maintaining outdated code.
Saas Allows For Easy Customization
Users can easily customize applications to suit their business processes, without affecting shared infrastructure.
SaaS models support each user's and company’s unique customizations and preserve them through regular updates. SaaS providers are able to upgrade more frequently, with lower costs and less risk for customers.
Improved Access from Network Devices
SaaS models allow your business to access data remotely from any networked devices. This makes it easier to manage permissions, monitor data usage, and make sure that many users can view the same information at once.
Saas Harnesses The Consumer Web
Anyone familiar with Amazon.com, My Yahoo! SaaS applications are typically accessed via a Web interface. SaaS allows you to customize with a few clicks, making traditional business software that takes weeks or even months to update seem hopelessly outdated.
SaaS Features
In order to reduce costs and grow your business sizes, you should use SaaS features. This will enable sales and business teams to engage with existing and potential clients and stakeholders more effectively.
Here are 5 ways SaaS can help your business.
- Boost lead management by better identifying and monitoring leads during the sales cycle.
- By capturing and sharing better insights about prospects and customers, you can improve sales and marketing collaboration.
- Streamline your digital marketing campaigns to improve marketing automation.
- Improves data management.
- Contact management is improved by better storing and tracking information about customers, sales leads, and prospects.
SaaS v On-Premises Software
In the past, companies bought and relied upon packaged software. However, this software "on premises" had many drawbacks.
What are the disadvantages of on-premises packaged software?
- Needs to be upgraded regularly by the IT department.
- Maintenance is required frequently, which can cause IT pressure and bottlenecks in projects.
- Integration of multiple systems can be difficult due to differences in architecture and code.
- Software, licensing and server costs are increasing.
- Small businesses may not be able to afford the costs of CRM software or hardware, or it could be difficult to scale quickly to respond to change or growth.
Want More Information About Our Services? Talk to Our Consultants!
Why is SaaS Outsourcing a Smart Choice for SMBs
Outsourcing can alleviate some of your worries regarding hiring programmers or architects; moreover, projects are completed faster (provided the correct outsourcing partner is chosen).
Now let's delve deeper to understand why SaaS can be attractive for many organizations.
Outsourcing Saas Development Has Many Advantages
You Can Save Time And Money
SaaS products consist of multiple components and it can be difficult to design an MVP with limited features in-house due to requiring highly skilled developers.
Outsourcing SaaS development gives you access to cross-functional teams who use cost-effective techniques in creating products.
Outsourcing can save time by eliminating hours spent searching for developers to fit your requirements; as well as saving money as already having chosen an affordable internal team is freeing you to focus on other key business operations.
You Can Work With Experienced, Pre-Vetted Teams
Outsourcing SaaS software development services means hiring specialists with knowledge in handling data management and product lifecycle.
These specialists understand best practices, technology stack, and designing for business purposes when they navigate product development using outsourced services.
Outsourced teams can perform development work efficiently and methodically due to architects with clear strategies, project managers with proven skill sets and senior developers with relevant technical know-how; senior developers possessing specialization; as well as quality assurance engineers -- each member being equipped to do his or her part efficiently and precisely.
Expertise in developing customized solutions has allowed them to deliver products across different tech stacks.
Accelerating The Development Process
Outsourcing product development means trusting in an agency's ability to complete it within your specified timeline, with technical experts and project managers to oversee and guide the process.
Find experts specialized in specific tasks without spending hours searching and interviewing candidates; this allows SaaS development to move much quicker by not spending precious resources hiring, onboarding and training new personnel.
It Provides The Opportunity To Create Scalable Products
Staying competitive requires being able to quickly deploy new features onto your products, meeting market demand and introducing timely features as quickly as possible.
A reliable product development team may give your company a leg up when meeting this challenge.
You Can Learn From Your Partner
Your external devops team should possess extensive project development experience; thus, your agile teams could learn from industry professionals that have overcome similar hurdles to SaaS development.
Outsourcing Saas Development: What Are The Challenges?
Outsourcing offers many advantages; however, you should remain wary of certain red-flags when making this decision.
Here are the main warning signals.
Fraudulent Contracts
Your outsourcing agency must understand all details of the contract they sign, otherwise they could surprise you with unexpected costs or charges later.
Be sure to have them sign both a nondisclosure and full contract without loopholes to protect yourselves and avoid unpleasant surprises later on.
There Is No Standard Code Of Coding
Work with external teams may present unique difficulties when it comes to code quality. You might struggle to align your practices with those of an outside group; therefore it is crucial that they possess higher coding standards than yourself.
Finding A Reliable Partner For Software Development Is Difficult
Finding an agency you trust with software development can be difficult. Finding one who understands both your target audience and business goals as well as aligning development efforts in line with them may prove more challenging still.
Delayed Project Milestones
You might experience delays in deadlines due to technical or communication gaps.
Even though reliable development companies employ delivery managers who are responsible for project milestones it is possible that they might still miss one or two.
There are generally two main reasons why project milestones are delayed:
- In the early phases, expectations are unrealistic.
- Existing features or new functionalities may be added.
Find tech partners who are familiar with setting expectations, providing estimates, and creating clear roadmaps to work in iterations, incorporating necessary changes.
Selecting The Right Partner To Outsource Saas Development
There are some steps you can follow to make sure that these partners are worth working with before you sign on the dotted lines.
Here are some things to think about:
1. Check Their Experience Level
You should conduct thorough research as a business owner to choose your augmented team. You should evaluate the track record of your potential SaaS developer's ability to successfully complete projects.
- You can find out what services they provide by visiting their custom website
- Checking to see which tech stacks are built by them and if they align with your needs
- The resources available for the screening
After you have thoroughly read their profile, it will be clear if this is the person you are looking for.
2. Transparency Is Key
Transparency is at the core of any successful partnership, so be sure to discuss any concerns with your technical partner early.
Be wary of potential communication or language issues and conflicts among management tools. In addition, both parties need to be open from day one about any project iterations changes or budget restrictions that arise during any part of this venture.
3. Early And Frequent Communication Is Key
Communicating regularly with your SaaS partner allows both of you to stay updated. Your contact person should send regular reports.
Establishing a mutual understanding is vital since this agency serves as your augmented technology team.
4. Assess Their Willingness To Understand What You Do
SaaS service providers must understand their clients' business goals and viewpoints to develop better products. Outsourced partners should invest time into learning about your target audience, users, business goals and overall goals of the project in order to efficiently design products with minimum iterations cycles.
5. Ask About Methods
Ask questions to gauge their methodology against what you require.
Some vendors, for instance, tend to focus on simply finishing projects without considering end user perspectives, while others focus both on code quality and user friendliness.
Noticing various approaches to project planning can also be important; some vendors might choose Waterfall while others could favor Agile.
Clarity on the technical front will enable you to achieve desired outcomes when working with an outsourced vendor.
6. Assess Their Level Of Familiarity With The Latest Technology
Every new generation of technology advances faster and provides engineers with more features for digital experiences and products.
These technologies and tools have an enormous effect on SaaS applications' development, impacting performance, scalability and security metrics among others.
You should first outline your requirements carefully - setting dependencies between tasks as necessary - before selecting which vendor best meets them - depending on which tools and technologies have the biggest effect. Once you have finalized your requirements you should create the questions to ask to assess a company's experience - more likely that way they'll recommend single login solutions on top of current technologies and trends!
How To Select A Reliable Saas Outsourcer
It is important to make the right choice when selecting a saas development outsource partner.
You must first ensure that the vendor has all the technical knowledge and user experience necessary to develop a complex SaaS. Also, you should ensure that the developers are using a proven method and possess good communication skills. Here are 9 steps you need to take in order to be successful with SaaS.
#1 Shortlist Potential Vendors
To choose a reliable partner, you should learn as much about outsourcing as possible. Market research is important.
Take into account the risks. Understanding the SaaS process is important. Researching vendors will reduce the likelihood of choosing a vendor who is unreliable.
At least some of your project goals should be defined prior to the start. You may not be able to come up with a complete set of requirements, but having a vision for the product at a high level will help you choose ideally suited tech partners.
Where should you look for SaaS-outsourcing companies? Try Googling, or independent vendor listings.
Consider the case studies and websites of each company. Take note of their experience, type of project, size, etc.
Select at least five potential vendors who have the expertise you need for your project.
#2 Check Vendor Reviews
Check out the reviews and testimonials on their saas website development.
You can Google the person who provided the testimonial to verify the authenticity of the review. Contact them on LinkedIn or by email to ask for their feedback. People are eager to share their negative experiences with outsourcing vendors.
Clutch.co, an independent review aggregator, is another goldmine of feedback. Each testimonial is based on an interview conducted by the staff of the unified platform.
So expect brutal honesty.
#3 Find Out About The Services Offered By The Vendor And Their Approach To Development
Once you've compiled a list, fill out the form to contact them. This will usually lead to a meeting between you and their salesperson.
Try to find out as much information as possible about the company during the call:
- How big are they?
- How long has the company been on the market?
- What are the technical qualifications and certifications of their employees?
- What is the approach they take to development?
- Are they able to provide relevant expertise in your industry?
- Are they Agile or Waterfall?
There are often many questions and the intro calls are short. Do not be afraid to send in those questions that you did not have time to address during the initial meeting.
#4 Observe Their Communication Style
Communication is the key to building lasting partnerships and delivering high-quality SaaS. A vendor's communication style can be learned during an intro call.
- What are the different time zones and how do they handle them?
- Have they worked with Western companies before?
- What are the steps they take to overcome the cultural barrier?
As an example, use the so-called "golden hours" when working with overseas clients. This is the time between when one team just began working and the other had not yet left the office.
Our clients are also sent weekly progress reports. They're invited to stand-ups with the whole dedicated team and we run Sprint retrospectives/demo together. More than 95% of our clients come from Western countries.
#5 Outsourcing Saas Development Costs: What You Need To Know
As you are probably aware, most outsourcing companies operate on a contractual basis. SaaS development costs are highly dependent on factors such as geography, project complexity and size, technology used, functional and non-functional needs, as well the type of contract.
- Fixed-price.
- Non-fixed price.
Contracts With Fixed Prices
The scope of the project and the budget must be frozen before any cooperation can begin. The team must document all requirements and create an elaborate project roadmap, including major milestones.
A fixed-price project must go through a very thorough discovery phase to be successful. We usually begin with several workshops with team members and clients.
We talk about your audience, their requirements, and how to meet them in your custom apps. The team will estimate the project after the workshops to provide you with a detailed breakdown of costs.
Non-fixed Price Contracts
Non-fixed price agreements are ideal when your requirements may change in the future, or you need to hire multiple specialists by using the Outstaffing model.
Non-fixed price contracts are a great choice for large, highly dynamic Agile projects.
Time and Materials is the most common and easiest type of non-fixed contract. The IT vendor is paid a fixed rate per hour plus a vendor fee.
This is a good software option for long-term projects as you can avoid the contingency fee of fixed-priced projects and save up to 30%.
Incentives-based contracts ask the vendor to estimate the project on the basis of the initial requirements. Then, you can add rewards for exceeding the original performance goals.
This hybrid approach combines fixed-price and non-fixed price models to motivate the IT vendor.
A variant of the incentive model is a contract that shares risk and rewards. You can set a budget and pay a reward based on a percentage to the vendor when it meets certain goals.
This model involves partners funding the development jointly and sharing the rewards over a specified period.
#6 Create A Request For Proposal
A RFP is an outline of your requirements and project for a vendor. It can be in different formats. It is most commonly used in the following variants:
- Project description & goals.
- Your company's information
- Project requirements
- Timeframes for a ballpark estimate
- Budget range and so on.
Use an RFP to compare answers and shortlist the most suitable candidate.
#7 Request a Non-Disclosure Agreement
Signing an NDA is the next step after you have selected your outsourcing partner. This contract protects your SaaS rights and intellectual property.
We allow you to sign a non-disclosure agreement (NDA) even before the first details of your product are revealed. You can include a clause prohibiting us from developing similar solutions with your competitors for a specified period.
#8 Signing a SaaS Outsourcing Contract
A contract like this should protect your IP and define clear acceptance criteria, including the deliverables of a project, milestones and how they define "done".
The contract for SaaS should include a budget and timeline estimate (the accuracy of which will depend on the type of contract).
#9 Collaborate With Your Outsourced Team
Treat the developers you outsource as part of your own team to achieve the best possible results. Learn about them.
To avoid problems, communicate regularly and early.
It's not a good idea to build a SaaS application in one shot. It's much better to start small with a Minimum Viable product (MVP).
Release a product that only has the essential features to get early feedback and raise money. When we partnered with Bridge, a Silicon Valley-based startup building a SaaS application tailored to the IT recruitment industry, we chose MVP development.
Every product is built on assumptions about people, technology and markets. It's difficult to test assumptions until users have a product.
Bridge turned out to be a completely different product than what we had originally designed. The founders were fortunate to have a working MVP, which allowed them to attract funding from several investors. After a small pivot, the development of what is now a highly successful application continued.
This case teaches us that clients should stay involved throughout the entire period of collaboration. Divide your application into smaller pieces, release them sequentially using Agile methodology, gather feedback and adjust your plans according to it.
Remember that a temporary setback may serve as the basis for an effective pivot. Slack was originally a video game called Glitch. YouTube was meant to be a professional website for dating, and Twitter as a single platform for podcasts.
Want More Information About Our Services? Talk to Our Consultants!
The Conclusion Of The Article Is:
It is not easy to develop a SaaS. SaaS outsourcing companies can offer the knowledge required to prevail in this cutthroat market.
Developers.dev has built SaaS solutions for over a decade. We are experts in horizontal and vertical SaaS, for many industries, including Recruiting, RealEstate Insurance, eLearning Energy & Sustainability.
Our engineers are happy to assist you with custom web development and API integrations. They can also help you with cloud engineering, multi-tenancy, scalability and scalability. Do not hesitate to contact us to schedule a free consultation.
