SaaS options demand discipline from SMBs

On the positive side, it has enabled many SMBs to affordably invest in business tools that not long ago were prohibitively expensive due to high licensing fees. On the not-so-positive side, the delivery flexibility and pricing model of on-demand software have unleashed a torrent of new offerings -- many touted as 'must-have' applications -- making the SaaS market confusing and difficult to navigate.

Take sales force automation (SFA), for example. SFA was once thought to be all that was needed to automate a sales team. But today, in addition to SFA, companies have an amazing choice of on-demand offerings to improve sales effectiveness, sales knowledge, lead development, compensation management and much more. Whatever savings a company might have anticipated from using an on-demand SFA system could easily be diluted by new demands

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for these additional applications.

So what's an SMB to do? Don't panic. As they say, this is a good problem to have.

SMBs must show discipline, as the on-demand market can feel like a candy store. SMBs must be careful not to gorge on every SaaS offering they come across, but instead select the on-demand applications and services that will maximize IT dollars, which are often limited. Here are some tips on how to make the right SaaS investment:

Ultimately, SaaS offerings have the potential to save SMBs money, but the savings won't simply happen. To get the most out of on-demand software and services, just like with traditional software offerings, SMBs need to be informed and smart customers.

Denis Pombriant is founder and managing principal of Beagle Research Group LLC, a CRM market research firm and consultancy in Stoughton, Mass. Pombriant is a well-known thought leader in CRM who publishes frequent research and is often quoted on CRM and SaaS topics.