SaaS ContractsA little over a decade ago, most smaller companies were still running their departments on separate software platforms that couldn’t share data without complex conversion issues. Since the late 1990s, these systems have slowly been replaced by unified back office management platforms built around in-house servers and company networks. By gathering every departmental function onto a single software platform and allowing departments to share access to databases and applications, companies can now seamlessly connect HR and talent management, payroll, and accounting. But since in-house server systems can be relatively expensive and difficult to maintain, companies are now moving ahead to the next stage in the evolution of data sharing: SaaS, or “software as a service”.

SaaS providers allow companies to access data and applications on a secure network that can be reached remotely ‘in the cloud’. This removes servers from the physical location of the company, and it eliminates the need for maintenance, since the provider offers this service in exchange for a monthly or annual fee according to the terms of a given contract. So as you search for a SaaS provider to handle your talent management data and applications, what should you prioritize? And what should you watch out for?

Questions to ask before signing a SaaS contract:

  1. How much experience do you have? You want to make sure your talent management software provider has the experience needed to guarantee a flawless hosted experience. As with any other vendor or outside service provider, you tend to get what you pay for. So if an offer seems too good to be true, take a closer look at the company’s experience and reputation.
  2. Can you describe your network security? You don’t just want a provider that will hold onto your data; you also want to protect it from security breaches, loss and damage. Be sure to ask about security protocols, data backup policies, and compliance with your industry’s data security regulations. Also inquire about the recovery of your data should you choose to terminate the contract.
  3. What is included in the contract? This is the most important question to ask and to ensure is outlined clearly in your contract. Request a line-itemed contract so that you know exactly what you are getting and what you are paying for each piece. Ask for all charges related to:
    • Implementation
    • Configurations, customizations, and integrations
    • Consulting and training
    • License fees
    • Storage and maintenance
    • Misc./other
  4. Why would the pricing change and what are the payment terms? What happens if I need another user, more storage, etc? When is payment due? Find out how often you will be making payments and for how long. Specifically, ask about:
    • Payment terms
    • Contract length (and if there is a discount for signing to a longer term)
    • Method of payment
    • Penalties for breach of contract
  5. Is the SLA clear and up-do-date? A company’s Service Level Agreement should be well defined in the contract and your vendor should be prepared to answer any questions that you, your I.T. department, or your purchasing department have regarding the agreement. It is important that your vendor’s service level agreement reflect what your organization will require to ensure success with your talent management software.
  6. How often do upgrades occur? Your SaaS contract should outline very specific details surrounding the frequency of upgrades, if they are mandatory, how it will affect your instance, and what is required of you (if anything) when upgrades occur.

Choosing to deploy your talent management software in a hosted (SaaS) environment has many benefits and will continue to be the deployment of choice for companies looking to lessen the burden on their I.T. infrastructure. Ensure your SaaS contract is clear and well understood by both parties. Don’t be afraid to ask questions and seek clarification – after all, we are not all versed in contract law. A great vendor will work with you and your team to understand every aspect of the contract.

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See also, To Host or Not to Host – Choosing the Right Deployment for Your Talent Management Software