Common challenges within SaaS – and ways to overcome them

While adopting a SaaS business model presents many opportunities, it offers a new set of challenges. Some of these common pitfalls and bottlenecks can be avoided if dealt with proactively. Here we explain how you can avoid these challenges.

Polina Zyaparova

Polina Zyaparova

SaaS (Software-as-a-Service) applications are a given part of companies worldwide – from smaller non-digital businesses to larger enterprises. As the number of SaaS companies increases, the market is more competitive than ever. Avoiding data silos and manual processes has become crucial to staying competitive, reaching growth, and succeeding while ensuring cost-efficiency. In this blog post, we'll list some of the most common challenges within SaaS and our advice on ways to overcome them.

The customer demand for digital solutions over an internet connection in exchange for a subscription fee is ever-increasing. The numbers speak for themselves – since 2010, SaaS companies have grown by twelve times, and there seems to be no end. The Software-as-a-Service market has had a significant impact across various industries, changing how companies have always delivered their software products and services.

SaaS has enabled businesses to achieve flexibility, productivity, and affordability benefits that simply would not have been possible using a traditional approach to software delivery. But with a lack of clear strategy, these benefits tend to get lost. While adopting a SaaS business model presents many opportunities, it offers a new set of challenges. Some of these common pitfalls and bottlenecks can be avoided if dealt with proactively.

Building the right foundation

SaaS companies' most common obstacles are related to product-market fit, scaling, customer acquisition, and retention. To start with, companies need to gather as much information as possible. This means researching the market, competitors, and customers to make sure that their product is solving an existing problem and that there is a demand for their product. Finally, their product is different from other products on the market. By doing so, companies can create the best possible opportunities for themselves in an early stage and adopt the right business strategy. When it comes to the more technical aspects, companies must develop an effective IT architecture that ensures scalability and sustainability.

How to future-proof your company may look different depending on your business. However, the goal should always be to avoid fighting fires, such as operational inefficiencies, database bottlenecks, or code loops. When it comes to subscription-based business models, this means avoiding overlapping subscriptions or that their customers are paying for more features than what they are using. This needs to be done at an early stage, or else companies may risk finding out further down the line that their spending runs rampant due to these inefficiencies. Companies can start focusing on customer acquisition and understanding their needs when the proper foundation is established.

Failing to understand customer needs

With increased competition and lower switching costs, customer retention is under pressure, and customer loyalty is hard-won, especially for SaaS companies. Modern consumers are used to getting access to products and services tailored to their individual needs and preferences. They expect nothing less than excellent customer service and straightforward, flexible, and transparent pricing models. At the same time, their needs are constantly changing.

SaaS companies that wish to succeed need to make sure that they are equipped to meet new customer demands, understand their customer's desires and pain points, and their willingness to pay for the solution.

Larger companies can turn it into their strategy to always listen to their customer's needs and continuously upsell new products and services, ensuring that the customer doesn't need to switch vendors to gain something new. But smaller companies with fewer products need to adopt a different approach – for example, finding ways to demonstrate the value of their existing product that customers have purchased. This means constantly making sure that their Customer Success teams do everything they can to ensure that customers are satisfied with the product.

Data security and compliance

Security is one of the top concerns for businesses today. With all the information being sent to and from the cloud, business leaders and IT departments must make sure that cybersecurity is of their highest priorities, especially when it comes to GDPR and cloud compliance regulations within the EU/EEA. (Watch the webinar: Cloud Compliance and Security for EU-based organisations: How can you stay compliant in the cloud?)

This might include encrypting your databases, using multi-factor authentication, and implementing role-based access control. One effective strategy can be finding a partner that can ensure that companies stay compliant while letting them focus on their core business and creating value for their customers.

Complex development and integrations

Developing a SaaS product is a complex process. It often requires a highly skilled team and a great deal of expertise. Besides having a great vision and strategy in place, developing an effective product and rolling out new features in an agile way as customer demands are changing is crucial. Without a good architecture and an experienced development team, the product won't be able to deliver the desired value and results.

The development team must also remember that customers won't be using only your application. Ensuring that the SaaS application is easily integrated with other apps has become a hygiene factor determining whether companies fail or succeed.

Why choosing the right partner is crucial

Using an eIPaaS (enterprise integration platform as a service) for integrations is becoming increasingly common. In the same way, as companies have stopped owning their own servers and instead started to subscribe to one or more cloud services.

With an integration platform as a service, companies can invest in the right resources and focus on what matters most – scaling up their core business, developing their product, ensuring customer satisfaction, and adapting to customer needs.

With an eIPaas, there is no need to build any separate back-end infrastructure and interfaces. Companies can simply provide integrations as a service as part of their service delivery to customers, enable even more comprehensive communication features through various channels, and facilitate faster deployments and customer onboarding.

When subscribing to a subscription service on an integration platform, customers can more quickly and easily integrate, monitor, and maintain all connections to customers' and partners' systems.

Curious to learn more about how Frends eIPaaS can help your company? Don't hesitate to reach out!

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