Three years ago, I started noticing a new tendency in the financial services industry: creating technology on the cloud. Back then, it sounded like only new startups could take advantage of this technology.
At the time, our only target market was financial institutions. We believed that these institutions would not buy products hosted outside of their internal infrastructure. This kind of business model worked only for products targeting markets like B2C’s or B2B’s for small & midsize enterprises because, in our experience, financial institutions had to comply with too many regulations making it impossible for them to use this type of architecture.
In 2017 the total of companies using a SaaS model was less than 33%. By 2020 that number jumped to more than 70%. This got our attention and we decided it was time to expand our target market and move to the cloud. What we did not realize then was the size of the challenge.
Changing the business model from On-Premise to SaaS goes far beyond technology, it is also about redesigning a whole set of processes in your company as well as devising a new digital marketing and sales strategy for a much bigger market. That is when the process gets more complicated.
The migration of SmartConcil to SaaS took us around two years and a lot of trial and error. In the process we learned that this move implied several considerations:
The security of information is one of the most important factors to consider in the process. All the information gathered from customers has to be highly secured. Protecting personal data is extremely important but it is especially crucial when we are talking about financial information.
When you have an on-premise product/service, most of these security restrictions are managed by the local customer’s IT teams, with firewalls, SSL certificates and access restrictions to the servers. On a SaaS model, more users have security access to the information, and that is why is very important to consider different security layers to avoid attacks like Fishing, SQL Injection and Man in the middle.
Onboarding & Customer Care
The onboarding process of a new customer is also another important factor to consider because the increased number of customers will make it harder for your team to spend a dedicated amount of time with each of them. Designing a simple and efficient process is key to customer retention and business growth.
Customer support is also critical. Fast support in case of a problem is imperative to keep your customers loyalty. They need to feel there is a team behind the product taking care of any issues that arise and supporting them along the way. This is also the case with your on-premise customers, but on a SaaS model, your customer base is larger, so you must rethink the processes you have in place.
Marketing & Sales
At last, you must design an entirely new marketing and sales strategy to bring your product/service to the market. You must consider:
Type of market you want to target: Defining your target audience is vital to develop the right message. Having a broad message will confuse potential customers that are considering using your service, especially when you are moving from the On-Premise model.
Select which channels will be better for your digital marketing strategy: It is important to identify which channels will fit better your marketing strategy to make sure you reach and attract the right audience. A successful marketing strategy finds what channels, platforms, and tools give the best return on investment and prioritizes the channels that resonate most with their target audience.
Define a new sales cycle: Making sales on the SaaS model requires a strategy that takes into consideration the increased number of potential leads. Remember, the process has to be straight forward for the customers.
In conclusion, not every company will benefit from a SaaS model, it depends on different factors like the kind of business, technology and problems that you are trying to solve, local and international regulations, etc. But certainly, a SaaS model can help companies grow faster because if you are creating a standard product/service on the cloud then you can scale.
As you can see, apart from all the benefits of a move into SaaS architecture, you will also need to redesign other processes in the company to have a successful story.
Do you think there are other challenges to consider? Let us know in the comments!