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12 Questions for your Hosted ERP (SaaS) Vendor

Be prepared with these questions for your SaaS Enterprise Software vendor.


SaaS Enterprise Solutions are making headway in the ERP industry. With your data being hosted externally, the selection process varies stressing the points of security and connectivity just as much as functionality.

Software-as-a-Service(SaaS) is defined as 'a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet'. This model often allows for a quicker implementation, but also has its challenges in providing the same flexibility as an on-premise ERP. To learn more about SaaS, read our previous tip, Tip # 5 - Pros & Cons of SaaS.

  1. What do you know about the SaaS Vendor?

    2. Investigate vendors to ensure that they have the appropriate amount of resources to conduct business - both in the short and long term. With a hosted Enterprise Solution, the closure of an ERP partner could result in a devastating experience. Find out how many paying customers are currently supported to determine the viability of the business. Ask for references from current customers. Finally, ensure that the business culture is similar to your own in terms of goals of growth and development.

  2. How flexible is the ERP?

    3. With business requirements continually changing, finding a flexible ERP that can adapt and meet your needs is critical. In terms of flexibility, these are the three most important things to look for:

    Delivery Model

    You may find that an SaaS model meets your current needs, however if your needs change, is there an on-premise model available? Ensuring that the option is available can reduce costs should you require a traditional product installation at your location. No re-selection of software would be required, data could easily be migrated and processes would not need major revision.

    Mobile Compatibility

    Today's advanced mobile technology allows business systems to support users that are on-the-go. With SaaS based on internet connectivity, mobile functionality should be inherent in any SaaS application. Mobile users should have the ability to add, modify or simply view real-time data from your ERP. Any SaaS application incapable of mobile communication should not be considered.

    Cross Platform Compatibility

    SaaS clients should be compatible with a variety of internet browsers and operating systems. The connectivity feature of SaaS also means that there should be no software requirement on your user's computers, eliminating IT costs.

  3. Can the SaaS application keep up to your growth requirements?

    4. The need to evaluate scalability of an SaaS application is no different than the review of an on-premise application. Before you purchase, find out how scalable the application is by investigating current customers. Review the largest businesses that the vendor supports. Find out about their data requirements and how the vendor responded to volume fluctuations. Was the application capable of handling extra load requirements? How effective were they at interpreting infrastructure change requirements? How efficient were they at implementing changes?

    Review the vendor’s data centre infrastructure. How do they manage their infrastructure in terms of bandwidth, server allocation, load planning, etc.? The SaaS provider is a long-term partner - be certain that they have the facilities to maintain and improve service levels with the growth of its business and clients.

  4. Does the Data Centre meet Industry Standards?

    5. Part of the process in ensuring that your data will be safe is to ensure that the vendor's data centre meets industry standards. Ask for a copy of their SAS 70 Type II Audit. The Report measures operational effectiveness and will provide the auditor's opinions on the management of the data centre.

    While in discussion about the data centre, also find out about how connections are monitored. Are the connections consistently tested beyond their firewall?

  5. Is a detailed Service Level Agreement (SLA) in place?

    6. Setting clear guidelines for the support that you expect to receive is critical when evaluating SaaS. The SLA should be well documented and provide information surrounding such topics as guaranteed uptime, how the uptime is tracked, scheduled maintenance, notification of maintenance to the customer, penalties for unfulfilled service levels, and additional service offerings such as training and implementation support.
     

  6. Is training and support included in the SaaS agreement?

    7. When implementing a new enterprise application, training and support for your employees is mandatory. Be sure that your SaaS provider can provide these services to your users. Ask the vendor to provide you with following information: associated costs, support detail (hours of operation, methods to submit your request, response times etc. ), self-support options, training course listings and availability, trainer and support staff qualifications and notifications of application changes/bug fixes.
     

  7. How will my usage of the system be billed?

    8. SaaS Systems should be billed based upon your company's tracked usage. If your company is seasonal with usage that fluctuates throughout the year, this would be an important consideration prior to selecting a vendor. Your system fees should also include upgrades, maintenance and support. SaaS can be thought of as the 'all-inclusive' option to ERP.

  1. Is a Business Continuity Plan for disaster recovery in place?

    2. Every hosted Enterprise Solution provider should have an extensive Business Continuity Plan in place should a disaster strike. Find out what is included in the plan and most importantly, if a disaster should happen, what are their downtime expectations for your business?

    The plan should include frequency of backups, storage location of data backups (offsite/onsite), data replication procedures / redundancy / mirroring, backup data centre locations, predicted response times and more.
     

  2. How is security managed?

    3. Security for the SaaS provider should be assessed by layers.
    • Physical Security. Data centres should be monitored 24/7 with security restricting access to all non-authorized personnel. Ask for proof of security guard patrol services, fire prevention services, and alarm response services for security beyond the data centre front desk.
    • Staff Selection. What are the hiring policies for data centre staff? Are criminal and reference checks completed? Who are the staff members that are allowed to access your data?
    • External Data Security Threats. With business data being transacted via the internet, the service provider must have the appropriate mechanisms in place to prevent attacks that exploit vulnerabilities in their network infrastructure, the enterprise application and the connectivity to its customers. Data should use the industry-standard of 128 bit encryption and the provider should always be on the forefront of new security technology as well having an awareness of the latest trends in security breaches.
    • Internal Data Structure. How will your data be stored in relation to other customers? Will data be on the same server? What measures are in place to ensure that there is no overlapping access to sensitive corporate data?
     

  3. What is the process for ERP upgrades?

    A major benefit of an SaaS application is that new innovation and technology are often more quickly available to your organization. Upgrades are performed on a more regular basis allowing your company to take advantage of new features.

    To ensure that your SaaS vendor is on the path to continuous improvement, obtain a copy of their Product Roadmap. The Roadmap will include short-term and long-term goals for the software and provide an overview of the scheduled modifications to the application.

    SaaS upgrades should be included in the monthly cost of your application. Upgrades should not be so intensive to disrupt your organization's processes or require staff to be frequently trained. Be aware of your vendor's upgrade processes and find out the following:
    • When was the last upgrade conducted?
    • How often are upgrades conducted?
    • Are upgrades included in the monthly usage costs?
    • Are customers provided with advanced notified of application changes?
    • Are there any outages associated with upgrades?
    • Will training be included for any upgrade that affects critical operations?
     

  4. Is the application customizable? Can it be integrated into existing applications?

    5. SaaS applications are typically not as customizable as on-premise applications; however the better solutions should provide enough flexibility to meet your business needs. Discuss the degree to which the application can be modified, and be specific regarding any unique processes that you feel would require significant modification. Also, be sure to discuss the level of difficulty in building in other processes. Will you require a programmer to replicate your less intensive processes or will you be able to configure them through flexibility of the application.

    Integration of the Enterprise Solution to your existing applications should also be reviewed. Discuss integration points and the likelihood of extending the length of your implementation. With the popularity of Microsoft Office Productivity Suite, any application you choose should have some integration capability to transfer data using export and import functions with common file types.
     

  5. Is a free software testing period available?

    6. With SaaS applications being available through the internet, a free trial can easily be provided to a prospective customer. Ask if you can have test access to the application for a month or more to assess the user interface and get a feel for the available functionality. If the vendor stands behind their solution, they will be happy to assist with the request to gain you as a long term customer.
     




    Want to learn more about SaaS?

    CLICK HERE to view our previous tip, Pros & Cons of Hosted ERP Solutions.



     

 

Find the answers and get expert ERP selection advice using the knowledge attained from years of business software experience. For additional information, contact BSA Inc. at info@BSAinc.ca.