SaaS: build vs. buy

To build or buy your subscription management system is a tough question. It seems possible to handle your current billing needs and every investment is risky. We often see companies wrestling with the “build-or-buy” decision as it relates to their subscription management system. Will an out-of-box solution work, or is a more tailored solution is required?

Scalable, flexible usability is central to the modern SaaS company. When weighing options and considering cost and efficiency of the “build-or-buy” question, it can be very difficult to see the long-term impact. The wrong system can create problems as the company expands, leaving future users frustrated with compatibility and scrambling for solutions. This can have a negative impact not only on subscription growth but the all-important customer relationship with clients.

Business technology is progressing at an exponential rate and maintaining systems like subscription management can be a drain on internal resources. Companies who leverage modern SaaS solutions gain consistent and fast upgradability while benefiting from their simple integration and scalable cost.

We will highlight some important considerations for your subscription management system and why it’s important to implement the correct one early.

1. What’s the main issue?
Your solution must focus on the needs of a subscription company, supporting everything from billing to system integrations to ease the customer journey in today’s modern subscription economy.

Billing becomes much more frequent — recurring transactions happen monthly or more. Higher billing frequency means more chances for a failed transaction or worse, losing or churning a customer. Effectively managing subscriptions and the operations of billing is good subscription business.

2. Do you have the technical skill set and time to maintain the system?Because an effective billing system can be a genuine competitive advantage, companies with more effective systems will have an edge. Not only are the technical skills and knowledge of an effective system crucial to its initial development, but also its ongoing growth. Your team’s resources may be better used for core company developments.

Subscription management systems are developed to be effective immediately and flexible as more functions are used. Having a solution where developments affect all customers is crucial to compatibility, maximizing your transaction rate while minimizing churn and overall maintenance.

3. Who will operate and maintain the system?
Subscription growth will affect your system as volume increases and you integrate more functions and offerings. It is important to consider the ongoing maintenance this will require, and the possible resources it could take to manage effectively.

With a system built in-house, cross-training would be essential as employee turnover could cause a gap in the critical skills required to operate and maintain it. Account for the time training requires, not to mention the possible interruption and lost revenue employee turnover could cause.

START SMALL ON VOLUME 
NOT FEATURES

4. How will scaling affect your business?
The ability to scale will be crucial not only to subscription growth, but also your ongoing relationship with existing customers. More volume must not inconvenience your current customers.

Scaling must seamlessly integrate everyone — including your current subscribers and any versions of the system they may be using. This could be another cause for churn or failed transactions — increasingly important with higher frequency recurring billing.

Scalability allows subscription management systems to handle volume as you grow. And because the upgrades and developments affect all users, it’s simple to integrate new features and go-to-market!

5. You will need flexibility.
More than a payment gateway is needed to manage the advantages of a subscription service. Credits, dunning, trial periods, billing dates and mid-cycle changes become integral to your focus on building a customer relationship. Updating plans, adding plans and upgrades, downgrades, pro-rating, coupons, discounts, upsells… These are all variables the system must manage.

Your subscription management system should also fit your specific model. Value incentives encourage customers to upgrade their subscription to the next tier, driving revenue. Usage resets are crucial for models based on customer usage per billing cycle — useful in telecom. These functions are difficult to build and are advantages of a subscription management system.

The ability to add and automate these changes with a fast time-to-market is a key advantage of the subscription management system.

RECURRING REVENUE + AUTOMATION = TIME SAVED

6. Create to automate.
Since billing is frequent and numerous, the benefits of automating become real time-savers with benefits especially important in smaller teams. However, automating inefficiencies or problems with the system magnifies them. Be mindful the automation doesn’t produce an output of errors that need more attention and time.

7. All information must be secure.
PCI compliance and the May 2018 deadline for handling the European and local GDPR rules require you have a plan, documentation, and impact of enforcement, breach, and verification. This will require any system support the overall compliance of a company.

8. What else should a system support?
Information collected in your subscription management system can support other areas of your business too! Metrics should be accurate and easy to view, so you can measure the effectiveness of that limited-time offer or see what clients are upgrading or downgrading to.

Information should be easily accessible by multiple teams, so it’s easy for marketing to measure their last campaign or finance to see what this month’s recurring revenue will look like.

Upodi Can Help
A subscription management system built for your needs.

Manage your subscriptions and take advantage of the full potential your subscription model provides. Our background and technical experts have helped develop a true partner.

Leverage the potent potential of a full subscription system from the beginning.

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