Young SaaS companies maturing along their journey to adulthood may fall into the trap of functioning as more of a professional services software-development shop built around a software platform. SaaS companies that are scaling quickly and need to appease their current customer base can find themselves dedicating excess time and resources to costly customization and rework. The pattern of prioritizing quick customer-specific delivery over improving the core product offering can inflate technical debt to unsustainable levels. Effectively combating this issue requires clear internal and external communication, high coordination among sales and engineering teams, and standardized ways of working throughout the organization. But how do you know if the “professional services woes” are already affecting your SaaS? JLA has identified some warning signals that may require an organizational shift.
SaaS companies that look more like professional services organizations find themselves prioritizing customization, support, and training of customer teams above product development. Mature “pure” SaaS applications like Dropbox or Adobe Creative Cloud are off-the-shelf solutions that are quickly implemented and adopted with minimal customization. Professional services, on the other hand, produce highly customized, comprehensive solutions often with unique software integration, maintenance, and upgrades. For professional services organizations, core software is configured, and additional customized features can be enabled for an individual customer account. Contracts likely resemble a per-user license plus a subscription model for support, training, and account management. As a result, customers extract greater support and services beyond the core software from a growing SaaS organization.
Although the professional services mindset can greatly help in winning new business, SaaS companies should look to shed the complexities involved with heavy customization in favor of creating standardized software solutions. These solutions should be designed for immediate use upon download, allowing for faster rollouts and quicker scaling. A true SaaS model minimizes the need for professional services but requires a highly intuitive user interface with valuable and automated insights. This allows customers and their teams to quickly integrate the offering into their day-to-day operations without spending hours on training and coaching.
Implementing a pure SaaS-based model is a longer-term play with multiple benefits. The first is time-to-revenue reduction, as it enables immediate implementation. SaaS applications have lower costs and faster scalability as compared to professional services offerings. If they’re easy to use, the software platform becomes attractive to a much wider customer base. Intuitive and predictive interfaces that automate reports and results can lower organizational expenses and keep recurring revenues high.
This isn’t to say that a professional services offering is bad. Offering customization and training can identify opportunities for software integration or enhanced features to potentially include in future core product releases. The model takes it up a notch and often includes hardware and networking, which could be attractive for a customer seeking higher value from their SaaS. The complexity arises when routine tasks that should be left for a customer’s in-house IT staff are taken on by a SaaS company in its teenage years, and R&D spending mushrooms to unsustainable levels. The “bird in the hand” mentality keeps software companies locked into delivering professional services, often by engineering and QA leads whose time would be better served looking for ways to improve the core offering. Customers are often aware of these dynamics, squeezing too much time and energy out of young growing teams.
A more sustainable model offers regular check-ins with clients, integrating ongoing feedback into future product iterations. SaaS founders and executives should abide by a product roadmap that sets milestones and deadlines for product improvements. In turn, the core offering can appeal to a broader market by finding ways to apply software functions to different industries and verticals. JLA brings the disciplined structure to young SaaS companies, helping them achieve true product improvement, coordinating among executives, sales, engineering teams, and current customers. JLA can dissect critical KPIs and metrics for your organization to ensure that you’re keeping your eye on the ball, and that a professional services imbalance doesn’t jeopardize future healthy growth.