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Monday, April 30, 2012

The Cost of Saving with SaaS (Software as a Service)

Talking about money is always an awkward thing, isn't it? It's a social faux pas to ask about another person's income, savings, property value, etc. - and probably for good reason. Even in the workplace, talking salary compensation with management can be unnerving. In negotiations, it's been long thought that the person who names a price first is at the disadvantage. 

When assessing how an investment would save you money, why should it be awkward?

If you are considering switching to a SaaS (Software as a Service) to manage some part of your operations, the question should be less, "how much can I afford to spend?" and more, "how much am I wasting?" In the case of an online employee scheduling & workforce management SaaS, here are some questions you need to ask yourself:
  • How much money am I spending on unscheduled overtime? 
  • How much money am I spending on overtime when there are others who can cover a shift?
  • How much money am I spending on software or materials to help manage my workforce - and how effective is it?
  • How much is the cost of any legal liability related to a scheduling mix-up?
  • How much money am I spending on staff to manage my workforce?
  • How much time is being spent on employee scheduling unnecessarily? 
It's easy to balk at prices at first glance or hearing. Here's a silly example. My wife likes to go to whichever gas station has the cheapest gas when she needs it. This may involve driving a few miles. Saving 2 cents per gallon on a 14 gallon tank is a $0.28 savings. Is that really worth it? Surprisingly, many people think like that. For me, my time is worth more than that - I'll go to the most convenient gas station. When you break it down to the real cost savings, I'd like to think more people will realize finding the cheapest gas isn't necessarily the way to go. 

Let's throw some other numbers out there. Let's say you're looking into a SaaS that costs $1,999 annually or roughly, $166.58 a month which translates to around $40 a week. Two thousand dollars may sound like a lot at first, but consider what you spend $40 a week on. Will the Saas save you more than $40/week? If you pay an employee $10/hour, are they spending more than 4 hours a week on the task a SaaS could alleviate?

But how will you really know if signing up for a particular software-as-a-service will actually save money in the long run? How will you know if the old adage of you need to spend money to make money holds true here? 

Two words: Proven Effective 

I believe the proof is in the pudding and fortunately, with how connected we are today, peer reviews come in very handy. When considering a SaaS, ask the company how many users they have. Maybe even ask how long their users have been using their product. Can hundreds or even thousands of businesses just like yours be wrong?

I recently read Scorecasting by Tobias J. Moskowitz and L. Jon Wertheim which introduced me to the idea of omission bias. In short, most people view inaction as less vile than action. Here is an example:

John, a tennis player, would be facing a tough opponent the next day in a decisive match. John knows his opponent is allergic to a food substance. Subjects were presented with two conditions: John recommends the food containing the allergen to hurt his opponent's performance, or the opponent himself orders the allergenic food, and John says nothing. A majority of people judged that John's action of recommending the allergenic food as being more immoral than John's inaction of not informing the opponent of the allergenic substance.


How does that apply here? Would not taking action into saving your business time and money by using a SaaS be viewed better than trying something and having it not work? You tell me. Some SaaS offer a small trial period or a satisfaction guarantee. Sometimes I think "satisfaction guarantee" has lost its luster in the world today. Why wouldn't you give something a try if it's guaranteed?

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If you've looked into an Aladtec online employee scheduling system, I'd like to remind you that all systems come with a satisfaction guarantee the first year. That means if at any time during your first year you decide it is not satisfactory, you may call to cancel and be prorated any unused portion of your subscription.

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