Procurement

  • 6 min read

Why Procurement Needs SaaS Management?

Rohit Rao

17th February, 2023

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SaaS management can help procurement professionals identify, evaluate, and select the best SaaS solutions for their organization. In addition, it can help to track and manage their SaaS costs and negotiate favourable terms and pricing with vendors. 

Consequently, SaaS management helps to optimize SaaS investments and avoid unnecessary spending.

A rise in SaaS adoption has led procurement teams to choose SaaS. This is because they're easily accessible and less expensive than on-premise software. Therefore, they must consider the cost benefits of SaaS and cloud-based solutions.

With SaaS, procurement and IT teams can work together to make integration easy. Further, if the software isn't used, there is no long-term commitment. The license can be immediately terminated if not required for future use. 

Procurement teams buy SaaS apps for a variety of reasons; some of the main reasons include the following:

• Cost-effective: SaaS apps are typically subscription-based, meaning that organizations only pay for what they use rather than making a large upfront investment in software.

• Scalability: SaaS systems may be quickly scaled up or down to suit changing business needs.

• Accessibility: Since SaaS programs can be accessed from anywhere with an internet connection, employees can easily access the tools they need to complete their jobs.

• Flexibility: SaaS software can be tailored to an organization's specific requirements.

• Saving time: SaaS programs are usually easier to set up and implement than traditional software or on-premise solutions. Thus, it saves a lot of time.

• Ability to perform a trial before buying: In the world of on-premise software, procurement teams spend a lot of time evaluating new software, watching demos, and more. But still, testing the software to ensure it meets the business requirements was challenging. There wasn't a way to "try before you buy."

But in today's SaaS world, it is easy for organizations to try the software in their own organization environment. This ensures that the solution is the right fit and will work well with your organization's programs before deciding to buy. 

However, in today's SaaS world, enterprises may easily test the software in their own environment. Therefore, before making a final purchase decision, you can ensure that the solution is a good fit and will function well with your organization's programs.

Procurement teams buy SaaS apps to gain these benefits and more, to improve the overall productivity and efficiency of the company, and to support the business needs effectively.

Now, let's go into the details of why SaaS management is required for proper procurement.

3 Key Reasons Why Procurement Needs SaaS Management

Proper SaaS management helps procurement teams to track and manage subscriptions, usage, and costs, to ensure that the organization is getting the most value for its money. 

This can include identifying and cancelling unnecessary subscriptions, negotiating better pricing and terms with vendors, and identifying areas where the organization could be overspending on SaaS applications.

Organizations that practice SaaS management have all the vital contract details for the SaaS apps in a single system of record, usually a SaaS management platform. So, when it's time to make a decision, procurement, IT teams, and the other stakeholders can use the same for strategic decision-making. 

1. They do not have visibility into total SaaS spending and usage data

If procurement teams want to add value to the business, they must collaborate more strategically with departmental heads. To do it, the manual tasks need to be simplified. 

Procurement teams need accurate data and time to focus on proactive SaaS strategy to serve as a company concierge accurately. You need all the data related to SaaS usage and expenditure towards each software so that they can make better procurement decisions in the future.

When teams and departments all over the company buy SaaS apps, it's difficult for procurement leaders to see how much the company spends and how it uses its applications as a whole. 

Procurement teams cannot make better decisions that give the best return on investment without usage data. In addition, due to a lack of visibility in the SaaS stack, you cannot find duplicate apps, unused licenses, and licenses that can be downgraded to suitable tiers, etc. All this leads to uncontrolled SaaS spending. 

2. Avoid overlooking cost-saving opportunities 

One of the most important tasks of every procurement team is identifying cost-saving opportunities in the organization. But that isn't easy to accomplish if you don't know which applications or programs are already in use within your company. 

Without visibility, it is quite natural to end up paying for unused or abandoned SaaS apps. In addition, they need more insight and supervision into an organization's SaaS usage, costs, and performance, which can assist them in identifying areas where their SaaS investments can be optimized and costs reduced.

Also, since so many employees use expense reimbursement to buy SaaS apps, the company is likely paying for redundant software tools (tools that fulfil the same purpose). Employees may even pay for the same app more than once. All these circumstances cause procurement teams to miss out on cost-saving opportunities.

3. To avoid surprising SaaS auto-renewals

Renewals of SaaS contracts and subscriptions can be complicated in many ways. Contracts are often kept in random spots that take time to get to. When there are more SaaS apps, more contracts are made.

There may also be other active contracts for shadow IT applications that are completely hidden until they appear on a bill. Again, this leads to surprising SaaS renewals for IT procurement teams. 

The vendor automatically renews SaaS contracts before renegotiating or ending. But optimizing or stopping SaaS renewal is only possible if SaaS ownership is properly documented.

These things put procurement in a tough spot because they have to do a full-scale analysis to find the information they need to evaluate applications, make rationales, and prepare for contract negotiations. 

So, when a surprise renewal comes up, they're put in a frustrating situation where they have to make quick decisions and risk losing important apps or reinvesting into ones they don't use. In addition, it's easier to do a good renewal if there is little information about the application or software.

How Does An SMP Help The Procurement Team?

With a SaaS management platform in place, you can now detect and monitor any SaaS applications and acquire accurate usage data. Further, you can get an overview of all the software used in the organization. 

Moreover, it helps you keep an eye on how many apps you've bought, how much you've spent, and when you buy them. This will allow you to unsubscribe from the applications and software you don't need and renew the specific ones as per your needs. 

Zluri, a SaaS management platform, helps procurement professionals find the best SaaS apps and ways to save money to get the most return on their investment (ROI). It gives you strategic tools and benchmark data to make procurement easy and save you up to 50% on your SaaS costs.

Further, it helps Procurement teams with SaaS contract management by maintaining a system of records for storing important information and files associated with contracts. This will help both -the procurement and IT teams- negotiate proactively with the SaaS vendors, as all the contracts are visible in one place and are easily accessible. Below are the few key features that Zluri provides:

It gives you all the SaaS usage data

Zluri keeps track of all the SaaS apps you use in your organization. It gives you related usage data, the app's owner name, and how much they cost, and hence, helps you to manage your SaaS spending. In addition, it figures out how your SaaS apps work together and then suggests better and cost-effective SaaS apps.

It also helps you eliminate SaaS wastage by eliminating duplicate apps, finding unused and underused apps, combining apps with similar functions, and renewing licenses based on usage data. It lets you see and control everything in your SaaS stack.

SaaS spend report 

Zluri provides procurement teams with deeper insights into SaaS usage across the organization. You can get usage data: users-wise, apps-wise, department-wise, etc. It provides you with real-time insights and SaaS spending reports to optimize your overall SaaS spending. 

Department-wise Budget: This report shows the division of spending by department, along with metadata such as department Name, Budget, Spend, etc. You can sort the data by Department Name, Budget Value, Month, and Financial Year.

App-wise Monthly Spend: This report includes information on the organization's monthly application-by-application spending method. The data can be filtered by Month and Financial Year.

Zluri's renewal calendar

Zluri's Renewal Calendar quickly looks at all the upcoming SaaS renewals. This will help you avoid surprise renewals, organize your preparations based on the size of the renewal and how much time you have, and plan how to use each application.  

Renewal calendars let you know when the contract is up for renewal and give you an idea of how to right-size the deployment. Suppose you have an idea about the renewal date. In that case, you can make better decisions about the renewal ahead of time by looking at the original purchase contracts and working on strategies for negotiating.

Moreover, it helps you prevent auto-renewals. It helps you terminate unused or abandoned applications and prepare for such app negotiations. It also reminds you to pay on time, so you always make every payment, and the business goes smoothly. 

You receive alerts for contracts 30 days, 15 days, and 1 day beforehand. For payments, you receive 7-day and 1-day alerts. Additionally, you can create your own alerts. This way, you can prioritize high-value contracts.

If you want to know more about Zluri, book a demo.

About the author

Rohit Rao

Rohit works in the Community and Marketing Team of Zluri and is a strong advocate of community led growth.