SaaS 101: The Basics of Software as a Service (SaaS)
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SaaS 101: The Basics of Software as a Service (SaaS)

More companies are now enhancing business operations to thrive in today’s digital environment. One of the ways to do this is to invest in Software as a Service (SaaS) applications to interconnect processes, increase productivity, and improve customer satisfaction.

But what exactly is Software as a Service (SaaS)?

SaaS is a cloud-based software service model where users can access applications through the internet. It is typically integrated with other cloud computing platforms, such as Infrastructure as a Service (IaaS) and Information Technology Management as a Service (ITMaaS), and offers a wide range of applications, including cloud storage and office software. Over the years, SaaS has also extended its reach to new technologies including artificial intelligence and the Internet of Things.

SaaS operates on a so-called multitenant architecture that provides vendors and users a common, shared infrastructure and code database that is centrally maintained. This means that applications can be upgraded in real-time with ease. For users, this presents an opportunity to cut on costs as SaaS eliminates the need to install and maintain on-premises software and hardware.

The SaaS industry is continuously growing with its 2020 growth set at USD133 billion (SGD176.2 billion). Market research notes that approximately 38% of companies are running completely on SaaS while over 70% are planning to shift to SaaS by 2021. Small businesses are also estimated to use between 25 to 50 SaaS applications while large companies operate with an average of 100 SaaS tools. Meanwhile, data also showed that there are over 6,800 SaaS providers in the marketing industry in 2018 and that the mobile market within SaaS is projected to reach USD7.4 billion (SGD9.8 billion) in 2021.


Types of SaaS

Before using SaaS applications, companies should consider their business’ purpose and the custom software development that they need. To give a glimpse of SaaS functions, here are some types of SaaS that companies can consider:


Enterprise Resource Planning (ERP)

ERP SaaS solutions have a well-defined data infrastructure that has a common information database and interlinked workflows. ERP usually caters to large enterprises and organizations that need to enhance business processes in real-time. It covers key business areas, including supply chain, procurement, and compliance.


Customer Relations Management (CRM)

CRM software applications are geared towards improving a business’ marketing and sales by building strong relationships with customers. It addresses concerns in a timely manner and enables a more customized customer experience.


E-commerce solutions

The rise of online shopping has paved the way for E-commerce websites to thrive. E-commerce solutions typically cover processes to do transactions online including payment integration and product management. In order to be fully functional, E-commerce solutions also need to have a web-hosting environment and a Content Management Systems (CMS) solution such as WordPress or Shopify.


Communication and project management solutions

Communication software applications are interconnected with collaboration SaaS solutions that provide a centralized platform where all stakeholders communicate. Different communication and collaboration solutions offer different functions. For example, Google Drive provides file sharing and conferencing solutions, while Slack offers instant messaging, video calls, and time management functions. Communication and collaboration solutions can be integrated with other systems to ensure consistency with data. Meanwhile, project management (PM) solutions are closely related to communication and collaboration tools as they are developed to keep project management teams on track.


Human Resource (HR) Solutions

HR SaaS applications, such as Workday, cater to human resource-related processes such as payroll, attendance, and performance. Most HR solutions are highly scalable and can be easily rolled out to employees, giving employees and managers more time to focus on more important initiatives.


Billing and payment solutions

SaaS software on billing and payment provides ease to customers. Banks and other financial institutions use these kinds of SaaS applications that offer various channels where businesses can accept payments, such as credit cards, bank transfers, and mobile wallets.


Benefits of SaaS

One of the things that companies need to secure when using SaaS software applications is a strong internet connection. With today’s advanced technology, there are now different high-speed broadband and phone networks to choose from. There are also SaaS applications that have offline mode functionality.

Here are some of the benefits of SaaS:


It gives easy access.

Since SaaS software can be accessed through the internet, businesses can choose any Operating System that they want. SaaS applications can run on Windows or Mac. They are also mobile-friendly and can operate on smartphones, including Android and iOS.


It provides a wider market reach.

Since vendors develop software that can cater to most companies in the market, prices can be cheaper. This can be an advantage, especially for small businesses. Having a wider market reach also means more options for users.


There is less hardware to be set up.

Less hardware can help businesses save on costs. SaaS eliminates the need to configure compatible software and hardware. This allows companies to focus more on other significant IT infrastructure services.

It allows easier data collection and analytics.

Since a SaaS application is maintained on a centralized platform, it is easier to capture data and use it for analytics. It also provides a more efficient process flow through intelligence and visualization tools. Data analytics can provide useful insights for business operations, improving internal management and customer relations.


There is more room for storage.

SaaS data is typically saved on the cloud, giving businesses more backup storage. Another advantage of SaaS storage is that users can work on different devices without losing any data. This eliminates the need for an elaborate disaster recovery plan in case of a hardware crash.


Updating the software is more convenient.

Another advantage of running on the cloud is that vendors can easily update a software application without greatly affecting users’ business operations. SaaS applications also lessen the testing time that can slow down the project cycle, saving time and resources.


SaaS can help grow and innovate your business.

One of the main goals of SaaS providers is to continuously improve software applications to retain more users. With its usual pay-as-you-go model, businesses have the upper hand to choose the best SaaS applications that fit their needs.

With the right SaaS application, companies have a significant chance of growing their business to attract more clients and rake in profits. In choosing the right SaaS application, it is important to understand the cost and how SaaS can be integrated to fit daily operations. Companies also need to consider the usability and support that the vendor will provide.

If possible, it is best if vendors allow a demo period to ensure the quality of the application. Businesses should also carefully review the terms and conditions of availing a SaaS application to clarify data ownership. Data security is an integral part of any business operation and companies should choose SaaS vendors that can maintain and protect sensitive data.

The bottom line: Businesses have to utilize scalable applications and solutions to effectively handle a large amount of data and increasing transactions both online and offline. Using SaaS applications allows flexibility, cost savings, and ease of daily operations. When planned accordingly and used effectively, it can help businesses grow and innovate.