As per our recent post on What is that Platform Worth?, SaaS is good, but only if you get an RoI from the subscription license fee. So how do you know if that SaaS platform is priced right for you?
Six years ago we ran a post on Good SaaS vs. Bad SaaS where we focused on some of the key non-functional characteristics that should be examined in your SaaS purchase process. Six years have past, and they still haven’t really changed. In summary,
| Good SaaS is | Bad SaaS is |
| focussed on value | sold on cost |
| has RoI models and plans to achieve them | talks about process improvements and associated cost reductions |
| is designed to support business cases | is focused on manpower reduction |
| has offerings and prices applicable to different customer sizes | has a one-size-fits-all offering and pricing scheme |
| competitively priced for what you need | priced out of the ballpark |
Breaking it down, a good SaaS vendor comes in with a proposal that
- competitively prices the solution based upon a value model that
- demonstrates a realistic realizable ROI based upon an
- appropriate implementation plan that not only addresses
- process and workflow improvements that will result not only in manpower reduction and cost reductions but
- increased throughput and improvements that will increase the overall value Procurement contributes to the organization.
- And the vendor will be able to help you summarize all of this in a business case customized for your organization.
It’s about your needs, not their optimal sales process / price-point.