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I am suggesting a software solution POS for a small retail store to manage his business operations effectively.

I am just trying to identify the risks and its mitigation strategy for SAAS solutions. I have identified a couple of risks as below:

  1. If Vendor got bankrupt
  • What is the mitigation strategy?
  1. If the backend servers fail then the app and website will stop working
  • What is the mitigation strategy?
  1. If the internet connection got lost then how the app will function?
  • what is the mitigation strategy?

What else could be the risks of using SAAS solutions and mitigation strategy?

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This is a hard question to answer because the risks and how you deal with them depend a lot on the vendor, the type of application, its features, the type of bussines, law regulations, and what you are willing (or not willing) to do to deal with the risks.

You can only sit with your client and try to identify the risks based on their mode of operation. The steps to brainstorm should be :

  1. how do they operate now without the SaaS solution?
  2. how will they operate with the SaaS solution (what stays the same, what changes)?
  3. when they are fully dependent on the SaaS solution and you take that away from them all of a sudden (vendor goes bust, internet connection goes down, etc) what will happen? What will you do to keep the business working? What are your fallbacks or plan B? <= thinking about these will help you identify the risks and the mitigation solutions.

The important point to keep in mind is for the store to keep functioning no matter what. If you have to close the store if the SaaS solution is down, then you are in trouble.

Some things to consider, off the top of my head:

  • Vendor going bust (can you export your data or you lose it? If it's financial information, for example, and you get an audit some time afterwards, you might be in some big trouble);
  • application not accessible (Can the shop still work? Can you process payments? Can you manage inventory? When the application comes back can you input the "off-line" information back into the app or do you now have two places of information to deal with?)
  • security (Is the store data secure at the vendor? Who can access it?)
  • contract issues (you need to specify service level agreements with penalties if you can't access the app. If they do updates, upgrades, or deploys it should happen at your convenience not smack in the middle of your shop's busiest hours. If you need specific features can the provider build them and customize them for you, or are you stuck with what they give you. If they offer development options how much will that cost? Can the vendor reziliate the contract at will?);
  • performance or scaling (is the internet connection fast enough? is the application itself performant? does it support the store's flow at the most busy time of the day? does your application sit together with a bunch of other applications on the same server sharing resources?)
  • any other issues identified at point 3 above.

There isn't a checklist to follow to make sure you identify and mitigate risks for a SaaS application. You just need to build the big picture, see where the SaaS is involved, and where the chain can break in the normal flow of operation.

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  • Upvoted for your kind efforts towards helping me and some of the brilliant ideas and suggestions. Really appreciate that. Currently, they are sort of fully dependent on the POS app for their online orders and payment. So if the app goes down then yeah its a problem. So, I am unable to figure out as if the vendor goes bust then what mitigation strategy I can suggest for his business to keep going? Do you think alternative app would be a good idea? – ILoveStackoverflow Aug 15 '20 at 12:52
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    Alternative app from another vendor can be an idea. Developing an in-house solution can be another. Handling orders and payments manually can be a solution. Even closing the shop can be an option if people are willing to accept the risk entirely instead of trying to mitigate it. If any of these are feasible solutions or not depends on the business and how they used to do things before the app. – Bogdan Aug 15 '20 at 13:52
  • Actually I don't have that info of how business use to operate before the app. So when the vendor goes bust so closing the store for a day would be risk mitigation or acceptance strategy? – ILoveStackoverflow Aug 15 '20 at 13:54
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    Closing the store for a day and using that time to figure out what to do next, means to accept the risk. A true mitigation strategy would mean to already have a plan for when that risk might occur and put it in action, instead of just waiting to see what happens and make sense of things then. – Bogdan Aug 15 '20 at 14:12
  • Actually I was wondering how can I give the risk mitigation strategy for some issues like backend server not working or performance issues in the app from the vendor side which I have no control of – ILoveStackoverflow Aug 15 '20 at 14:18

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