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Are businesses missing out on the full power of SaaS technology?

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Last editedJun 20243 min read

Software-as-a-Service (SaaS) tools are the engine driving the cloud computing industry. It’s no wonder so many companies have been converted to this type of outsourced technology when one considers the cost savings it can bring, how easy it is to implement, and the flexibility it offers.

But too many firms still only see SaaS as useful to their sales, finance, and accounting functions. Too few understand this is just the tip of the iceberg - SaaS solutions also exist to help with areas such as HR, marketing, project management, and customer relations. Why aren’t bosses getting the message that this technology can dramatically improve efficiency across a host of business needs? More than half of SMEs have at least one active SaaS subscription, GoCardless research has found.

The amazing rise of Saas

In truth, SaaS is everywhere, with even the average man on the street having at least one Gmail or Yahoo email account. Businesses are no different, and GoCardless increasingly works with SaaS operators providing companies’ essential services, processing regular and prorated subscription payments by Direct Debit. But, even those that have embraced SaaS models are not necessarily getting the full benefit from them.

About a quarter of firms use SaaS for finance and accounting, with one in five finding it useful for tracking sales. Yet, only 16 percent of large businesses have adopted these products for their HR, marketing, and customer service needs. These companies are putting themselves at a significant competitive disadvantage.

Ed Shelley is director of content for SaaS analytics platform ChartMogul, and he believes enterprises currently not using these external resources for non-finance-related areas are severely limiting their potential. He adds: “HR, marketing, and CRM are three verticals where SaaS has revolutionised business operations, giving a huge amount of choice and greater automation.

"There’s a wealth of benefits - the ease of onboarding the technology, greater accessibility, and less commitment. People can experiment to see what works for them. Also, these tools are democratising. They don’t require specialist knowledge to use them.”

The need for better SaaS education

Many business owners are simply unaware of what they can achieve using SaaS. But even some tech-savvy bosses fear a clear return on investment (ROI) is hard to prove in areas less obviously quantifiable than finance or sales. Education is key here, as evidence shows how SaaS can benefit the bottom line across the board.

Savings are demonstrable for a range of business functions, according to analysis into ROI of SaaS by research giant Forrester. Firstly, there’s the low or non-existent upfront expenses of setting up a system. Competition among SaaS providers is such that the initial bill is remarkably affordable for the business user. But cost is the least of it. The flexibility, functionality, and ability to scale up or down is the major gain for most firms.

Forrester’s researchers also found SaaS tools are typically much faster to deploy than on-site applications, with staff adoption rates often proving better than systems hosted on the premises. Many SaaS applications have a user interface reminiscent of familiar Web programs, making them intuitive for new users, which means business support costs typically go down.

SaaS also has the edge when it comes to offering frequent, automatic, seamless upgrades as part of the standard subscription fee. Regardless of the area of the operation being addressed, the benefits are clear. But the challenge for providers is to communicate this to business owners.

Benefits across the board

Dan May is the commercial director of IT support firm Ramsac, based in Guildford, Surrey. The business employs 60 people, and decided to start using breatheHR’s SaaS tool four years ago as part of Ramsac’s drive to become a paperless organisation. But Dan was also impressed by the vastly improved access to personnel information the service gave staff, as well as the fact it saved hours of data-gathering every month.

He says: “The breatheHR system provides information to those who really need it. We did a month-long trial, and realised it was going to pay for itself rapidly due to the man hours saved, the extra control it gave us, and the flexibility it provided our mobile workforce when filing expenses claims remotely.”

Jonathan Richards, chief executive of breatheHR, believes using a SaaS platform to manage HR strengthens company culture, which has a real impact in terms of staff satisfaction and retention. He comments: "A cloud system gives businesses real-time insights when they need it most, as well as welcome shortcuts. Cloud and SaaS technologies make areas like HR more powerful for both the employee and the business."

Ramsac’s work means it has an insight into its clients’ IT needs, and Dan has identified what he sees as key barriers to businesses adopting SaaS services. While fears about security of external providers have largely disappeared, he believes, Dan points to continued poor speed of internet access in many parts of the UK as being a hindrance to the adoption of these new ways of working.

Challenges in widespread SaaS adoption

“A limiting factor is the internet infrastructure in this country, with reliable, high-speed broadband still not available for many businesses”, he commented. “There may also be a problem with awareness about the products available. For example, Sage and Xero’s SaaS models for accounting are widely advertised, but some business owners have an out-of-date idea when it comes to marketing or HR software, thinking it expensive. These issues are already further down the pecking order in terms of priority, so many won’t do the research to discover their assumptions are wrong.”

However, Shelley is optimistic that behaviour is changing with the advent of younger business owners. He adds: “Smaller and start-up businesses are often more open to this type of software, and feel less pain swapping to it than larger entities. And it’s not just tech businesses – we see lots of offline industries like gyms, food delivery boxes, you name it, using SaaS to great effect.

"Those coming into business now have grown up with the idea of everything as a service, renting things rather than owning them, and being able to turn services on and off like a Netflix subscription. That attitude will spill over into enterprise, I predict, and should soon see SaaS tools more commonly used across all industries and business functions.”

SaaS success across the customer lifecycle

Insights and practical tips from B2B SaaS leaders about optimising each stage of the SaaS customer lifecycle.

View the guide

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