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The HR challenges of SaaS failure

Contingency plan

It is good business sense to make contingency plans to deal with a variety of unpredictable disasters. This is particularly important with SaaS where the disruption that can result from not being able to access key business applications in the cloud is often underestimated.

One area that is frequently neglected concerns the HR challenges created if a SaaS provider stops trading or withdraws a service at short notice. This could seriously jeopardise the day-to-day activities and perhaps even the long-term viability of a company that uses its service.

It is tempting to think that the SaaS provider will help affected users make alternative arrangements, but the support it is prepared to offer may fall well short of what is desired and, anyway, if its business is failing, supporting customers may not be a top priority.
So, the onus may fall squarely on the company which will then find itself having to devote considerable man-hours and resources in search of a solution to a problem for which it is ill-prepared. The HR challenges fall into several areas:

  • Time may have to be spent researching alternative products and re-evaluating their suitability;
  • Customer data may need to be rebuilt, reformatted or even re-inputted to make it compatible with a different product;
  • Additional resources may be needed to manually process data in the interim until an alternate service is up and running;
  • Key staff may be distracted and diverted away from revenue-generating activities;
  • Staff morale may suffer if the problem persists for some time.
  • In the worst case, jobs may be at risk if the business is unable to rapidly recover from the situation created by the loss of a SaaS service, causing the company‚Äôs financial position to deteriorate.

    A SaaS escrow agreement mitigates this risk by providing companies with rapid access to the source code of their remotely hosted business applications should the provider fail. That allows them to rapidly and easily redeploy their software and so get back into business.

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