Dubbed as the modern way to revolutionize one’s business, the concept of SaaS or Software as a service is slowly taking the business world by storm. It is the latest trend when it comes to delivering business applications, Customer Relation Management (CRM), finance processing, sales, as well as database organization without the technicalities of traditional software and complexities of hardware installation.
SaaS makes running a business efficiently – there is no hardware to install, no software to maintain, it provides seamless integration and offers lowered initial cost. If you are a SaaS startup owner, for sure you know all these things by heart. Being aware of all the benefits of your products compared to other companies is easy, but what about the drawbacks and challenges in line with your business?
Unable to determine your risks might lead to loss of revenue and worse, never-ending court battles. Check out this guide to risk management for SaaS companies and let your business grow without hiccups.
Every business comes with risks and challenges, and the SaaS industry is not exempt from these perils. Since Software as a Service is a relatively new concept, there are still concerns and misconceptions about its process. The major challenge that holds back most business owners is the safety and security of data stored on the internet. Issues with data sensitivity, preferred versions, and limited choices are equally on the rise.
Saas relies heavily on the internet to maximize its full potential, though this can be a big concern since internet connectivity often fails, making the service totally unusable. Internet connection speed is yet another factor because running SaaS on the below-required internet speed may cause the application to slow down. The lack of integration with other programs is yet another challenge that needs to be addressed properly. You can, however, minimize these issues by:
- Explaining thoroughly the upsides and downsides of your products.
- Giving a wide variety of options and choices depending on business.
- Providing concrete ways to control delays and service interruptions.
As a company, your main goal is to maintain a steady profit and keep your business expanding while lowering operation risks and liabilities. Whether it’s a hardware issue or interrupted service or system failure, having a strong risk management process in place is critical to the success of your trade. For example, to resolve glitches in the quickest time possible, make sure that contact records and necessary documents are readily available.
When it comes to administrative and technical controls, you want to keep downtimes to a minimum level. Although 99% service reliability is hard to achieve, you need to rectify issues as soon as they arise to prevent them from spreading. You can setup alerting systems to notify team members of possible issues and have good metrics to accurately assess problems. Likewise, make sure to:
- Identify key areas of operation and make a business continuity plan.
- Develop step-by-step directions on how to resolve glitches and technical issues.
- Inform staffs regarding disaster recovery procedures and emergency plans.
The importance of cybersecurity
This guide to risk management for SaaS companies wouldn’t be complete without pointing out the importance of cybersecurity. Data breach scandals are a primary threat to all startup SaaS businesses, especially if clients are from the government and financial sector. A single leakage or data exposure can break your reputation, or worse - permanently shut down your company. One way to avoid this is to carefully and continuously monitor all applications.
To avoid credential theft and account breaches, always monitor activity logs including successful, repeated, and failed attempts. Now, if you want to secure administrative credentials, make sure to supplement privileged users, change network permissions, modify policy controls, and audit logging configuration. For third party applications integrated within the SaaS app, you must monitor activities concerning changes in access permission, certificate activity, and token authentications.
Keep backup systems always updated to easily recover damaged or lost data. To prevent hackers from carrying out data exfiltration, add security levels when sharing files. Create firewalls, open the 2-factor authentication, and report malicious activities.
Get the right insurance
Even if you have mitigated all risks and followed every measure to keep perils down to a minimum level, the industry is so unpredictable that unforeseen events may happen anytime. Mistakes, uncalled situations, and faulty actions could lead to litigation and costly lawsuits. To safeguard the interest of your company, uphold its reputation, and preserve financial resources, it is just wise to obtain the right insurance for your business.
Two major policies you should acquire are General Liability and Worker’s Compensation insurance. General Liability protects you from bodily injury and property damage, as well as personal or advertising claims like a misleading advertisement, libel, slander, and copyright infringement. Worker’s Compensation, on the other hand, is mandatory in most states and it lends assistance if one of your employees becomes sick or injured at work.
- Get advice from trusted insurance partners and professional agents that know your business.
- Professional Liability insurance in the form of Errors & Omissions (E&O) protects you and other officers from negligence claims while doing business.
- Cyber Liability is vital since it defends your company from hacking incidents, data breaches, and network failures.
What to keep in mind!
Last on this guide to risk management is the impact of standardizing your activities and putting them at the core of your business. Remember that SaaS companies are increasing in numbers as days goes by, while competition is getting tougher so you should put your best practices forward to secure and protect your products and services.
Risk management for SaaS should comprise several security measures to minimize dangers and threats in the cloud. All areas should be covered from protecting sensitive data to giving customers a safe and efficient way to do business. You can strengthen the risk management process by:
- Building a robust architecture that tackles Saas security strategy.
- Making sure that there is a good balance between risks and productivity measures.
- Keeping up to date with technological advancements and industry developments.