Part II – Purchasing a SaaS Application: Negotiating and Executing your Agreement

||Part II – Purchasing a SaaS Application: Negotiating and Executing your Agreement
By  | October 13, 2015

<img class="wp-image-466 size-medium alignleft" src="http://www.saepio visit×169.png” alt=”” width=”300″ height=”169″ srcset=”×169.png 300w, 600w” sizes=”(max-width: 300px) 100vw, 300px” />Part II: Negotiating and Executing your Agreement

This is the second part of a three part series on purchasing a SaaS application. The first part of the series covers “Planning questions and purchasing considerations“.

At this point let’s assume your legal and key stakeholder teams have reviewed and signed an agreement defining your SaaS application as well as the terms and conditions. From this point on your involvement and ownership will become even more important as you work to launch the application. Below are thoughts, comments and recommendations as you embark on the next phase of your journey.

  1. Have you read the agreement and do you fully understand the terms and conditions?
    • Please take the time to read through your entire statement of work and fine print, especially if the agreement is on the vendor’s legal paper.
    • Areas to pay close attention to as a business stakeholder (we’ll leave the true legal components up to the lawyers!)
      • Statement of work (what exactly are you buying)
      • License count
      • Storage allotment
      • Term and renewal clause
        • The longer the term, the more flexibility you may have in negotiating price.
      • Termination clauses
  2. How much time will I and other members of my organization need to spend on this project? Who is going to lead the implementation?
    • This is one of the more often overlooked components. It is critical that you understand how much time you will be committing to this project as well as what other internal resource time will you need.
      • Ask your vendor to provide a work stream layout based on previous implementations they have done. This will give you an understanding of who is responsible for what and can help you during the start-up phase.
    • Will you be managing this project or will you have the luxury of being assigned a resource from your PMO? The scope and size of your roll-out, as well as company policy, will probably ultimately dictate if you will get a project manager to help.
    • Ask your vendor to provide a project plan. This will help you understand the key milestones as well as due dates.
  3. Define your launch date and what is included in your launch date.
    • Are you going to roll-out in phases to small groups? Are you going to roll-out enterprise-wide with all of the bells and whistles?
      • As most SaaS companies bill you right out of the gate, it may be important to launch with something sooner rather than later. This could include a small pilot group to gain feedback, etc.  The longer you wait to launch the more explaining you may have to do to your boss regarding all of the subscription fees you have paid and nothing to show for.  This can be a delicate subject as many clients choose to launch with the perfect solution but the downside is a potentially longer implementation.
      • Regardless of your direction, it will be important to set expectations with everyone up front.
    • How does your vendor’s implementation model work?
      • Assuming your SaaS application requires configuration, it will be important to understand the model your vendor employs.
        • Will you have a dedicated contact? How long will you be able to work with this person (i.e. do they drop off after a certain number of days or hours worked)?
        • How will you exchange requirements? Over the phone?  On-site visit?
          • Will the vendor document and provide you a copy of the requirements?
        • How does your vendor handle change requests? Does it cost you money if something changes half-way through the implementation?
        • What does your vendor expect of you? Attendance on status calls?  Key decision making abilities, etc.?
        • How does your vendor handle new requirements? Undoubtedly something will come up that you may wish to add; is that addition out of the box?  Does it cost money?  What is the impact to the overall timeline?
        • How does your vendor handle bugs that come up during the implementation? Do they have a support team?  What is their SLA for bug resolution?
        • What is the escalation path with your vendor if something isn’t going right? For example, who in the chain of command can you reach out to if you aren’t getting through to your implementation contact?
        • If custom work is involved in your statement of work, how will your vendor handle that work in conjunction with your out of the box solution?
        • How does your vendor handle system and user acceptance testing? For example, at what point will you and your team be allowed to peruse the system and provide feedback based on your configurations?

Again, these are some of my key takeaways reflective of my time at Saepio as well as a previous job.  I could probably write a few more pages but my hope is that the considerations listed above will have the most impact.

In our final installment, we will look at launch and beyond for your SaaS application!