Expect More from Your SaaS Vendor

You know where you've been; demand that your vendor help you imagine where to go next.

• By Ben Archibald
• Oct 02, 2009

Software-as-a-Service (SaaS) has proven itself in the health and safety sector: it saves money, simplifies IT objectives, and ensures customers are using the most current versions of software. Yet SaaS's strategic potential for the industry has yet to be mined. It's time to take a hard look at how SaaS could evolve to best serve the health and safety sector.

Think back to corporate technology in the 1990s, before SaaS had made significant headway. At that time, companies were growing weary of all of the talent and resources pouring into IT departments. Onpremise software rarely lived up to its sales pitch, yet given the money and time spent on infrastructure and maintenance, companies felt locked into their investment. Upgrades, which could take months and years to complete, stifled productivity. To add insult to injury, IT innovations turned out to be as expensive as they were fleeting, and customers found themselves spending unanticipated money and IT resources on upgrades, necessary to avoid falling behind.

The first rescue came in the form of Application Service Providers (ASPs) in the late 1990s and early 2000s. ASPs removed the software from the client's premises and ran it remotely from their own data centers, with hardware and software licenses dedicated to each customer. Additionally, these ASPs brought expertise in managing specific types of software applications that no organization-wide IT department could hope to achieve. Freed from software hiccups and bloated IT staffs, companies could stay focused on their core businesses while ASPs maintained their IT edge.

Yet the ASP model became unsustainable for vendors. Maintaining one hundred servers for one hundred different clients was too expensive and cumbersome. It oft en made more sense for the vendors to create a single piece of software to, by its very design, serve a multitude of customers simultaneously. This new approach, now known as SaaS, has allowed the scale of the customer base to determine the cost and scale of the underlying technical infrastructure and associated maintenance. For customers, the cost of infrastructure and the licensing costs of the software and functionality itself have merged into a simple and predictable fee.

In addition to a better and more predictable cost structure, SaaS vendors have found themselves with significantly more data, in aggregate, than their ASP and installed-behind-the-firewall predecessors. The somewhat accidental effect of this otherwise costand technology-driven evolution is that tremendous amounts of data — from process to outcome, to usage, and more — are richly and readily available. In more concrete terms: At our injury prevention SaaS company, we have more than 1 million days' worth of computer use data, from general computer use to mouse use to keyboard use. In addition, we have approximately 750,000 individuals' reports of level of discomfort experienced while working in their office, as well as numerous other data informative to the efforts in reducing employee injuries.

Amassing this amount of data in a market-research capacity would be a long, painstaking, and costly process. It would require countless hours of focus groups and interviews within a hundred different companies that may or may not want to participate.

SaaS vendors, by comparison, can pour themselves a cup of coffee, boot up their laptops, and have immediate access to data across their customer base. This vantage point now available to the SaaS vendor is comparable to what was previously unique to consultants: the ability to amass knowledge, information, and experience through working with a wide range of customers. While consultants gain from the interpersonal connections achieved only by people interacting with people, the SaaS vendor gains from its superior volume of data and information amassed. For both types of vendors, the bottom line is rapidly gained experience.

It's Time for a Change

Yet, despite this data and experience, few customers push their SaaS vendors to provide more than just bits, code, and data management.

Now is the perfect time for this to change: Instead of one SaaS vendor in each corner of health and safety, there are often two, three, or even four. Vendors must work harder than ever to distinguish themselves by harnessing the potential of the vast data at their fingertips to benefit their customers. Here are some questions to ask your vendor to ensure maximum return on investment in their software:

1. Ask your vendor how your health and safety data or processes compare to the data of other customers, along whatever dimensions are important to you. For instance, ask your safety E-Learning vendor how your completion rate for an educational component of your safety program compares to other customers'. Better yet, ask them why any discrepancy exists.

2. You look to staff for some things and consultants for others. Given the information your vendor is privy to, what other services are they able to provide better than anyone else? For example, a customer recently came to my company to ask about utilizing our data and experience to minimize the impact of budget reductions on employee safety. By comparing this customer's data and processes with some benchmarks established by looking at other organizations, we were able to provide them with recommendations and predict which cost-reducing changes would have minimal impact on their employees' safety.

3. Ask your vendor what it is doing as an organization to continually learn from you. How does this learning affect their product roadmap? How will that improved software help your company become more effective and successful? What have they learned from other customers that could be valuable to you?

This year, smart companies are focusing on creating customer value in deeper ways than ever -- a shrinking economy and a harder fight for customer budgets necessitates doing so. It's the perfect opportunity for you to get the most out of your vendors, and if they are SaaS vendors, remember the unique opportunity provided by their data. If yesterday you were asking yourself and your vendors, "Is this working?" today you can ask your SaaS vendor, "What could work better?" They should have the experience and data to provide you with informed ideas.

The new value proposition for SaaS is strategic and actionable use of this experience and data. Capitalize on it. You know where you've been; demand that your vendor help you imagine where to go next.

This article originally appeared in the October 2009 issue of Occupational Health & Safety.