Spend less on your SaaS procurement

SaaS procurement involves a series of steps that a company takes to subscribe to and deploy a new software solution. A well-executed software procurement cycle demands different skills to standard business procurement, as the purchased goods are not one-time, physical products — but digital solutions that each carry recurring costs.

The exact process of SaaS purchasing will vary between organizations, depending on the hierarchy of decision-making. However, it typically follows this general outline:

• Identifying business requirements
• Researching prospective tools
• Negotiating with leverage
• Onboarding the new software

SaaS procurement explained

Software-as-a-Service (SaaS) procurement is a strand of traditional IT procurement — the process of acquiring the technologies and services businesses need to carry out their daily operations. The difference between the two is that SaaS procurement refers only to the acquisition of company software. 

SaaS procurement is a relatively new phenomenon. With organizations now favoring automation over manual processes and legacy IT systems, the presence of software in modern businesses has grown at a rapid rate over the last two decades. We estimate that the average company now uses well over 100 different software tools on a daily basis. 

The exponential growth of the SaaS economy — and its importance in the modern business world — has demanded the advent of specialist procurement teams. The process of identifying, purchasing, implementing, monitoring, and managing new SaaS licenses is highly complex, covering all areas of business and requiring buy-in from employees across a range of departments. 

Many businesses have taken a scattergun approach to SaaS procurement, with purchasing decisions made outside of established procurement guidelines. It’s easy to see how this happens: in the interest of productivity and innovation, employees will race to secure the platform they need to complete a particular job.

But effective SaaS procurement is only possible with clarity and cohesion. When the buying process is conducted away from a centralized procurement department, businesses weaken their chances of procuring the right product in the first place. 

Mismanaged SaaS procurement also invites the pernicious influence of shadow IT — ‘hidden’ software within an IT ecosystem not attributable to any one department or employee, and typically acquired outside of existing procurement policies. Poor visibility of SaaS platforms — and the personnel and devices that have access to them — can lead to significant security and compliance issues down the line. 

But above all, specialist SaaS procurement teams exist to cut spend. This is our mission here at Vertice: to reduce your annual software bill, regardless of the solutions your business needs. 

Keep reading to find out how Vertice can save your organization up to 30% on SaaS spending, and then get in touch via the form at the bottom of the page to get started.

What does effective SaaS procurement look like?

As today’s technological landscape continues to evolve at an accelerating pace, an effective software procurement process is critical for businesses seeking to enhance efficiency, productivity, and competitiveness.

To ensure new software acquisitions deliver the intended benefits, SaaS procurement requires a well-defined process that takes several key factors into account, including:

• Requirements assessment – At the outset, thorough consultation with stakeholders to identify the specific needs and objectives of the business is a must. Part of this includes considerations around consolidation-led vs best-of-breed software. Security requirements often necessitate best of breed, for example, while consolidation-led SaaS applications offer more comprehensive solutions in areas such as customer relationship management (CRM) and enterprise resource management (ERP).
• Vendor analysis – Procurement teams will want to broadly evaluate the available services. Promising candidates can then be analyzed in more detail to see whether their product is likely to meet the needs of the business. It often helps to take a data-driven approach using various metrics in order to make informed decisions. When comparing solutions, things to consider might include potential ROI, competitiveness and cost savings, lead times, and vendor uptime and availability.
• Security and compliance – Rigorous assessments of the vendor’s security should be made. Aspects to consider include data protection measures such as encryption standards and access controls. Further, how is the vendor equipped to mitigate potential attack surfaces, and what is their response time if an issue does arise? Procurement leaders must also consider whether the SaaS solution aligns with industry- or geography-specific requirements as well, like GDPR or HIPAA.
• Budget and pricing – An accurate picture of the total cost of ownership (TCO) for a given SaaS product is vital. What’s the monthly subscription fee? Is it charged per seat, per hour, or per concurrent user? Are there any upfront costs or training expenses? Watch out for additional fees or hidden costs for extra services too. Of course, SaaS investments could reduce your business’s costs in the long run through operating efficiencies or a reduced tech footprint. It’s important to balance these potential benefits with your budget.
• Contract negotiations – Working with the vendor and your legal team to devise a robust SaaS contract can ensure there are no unpleasant surprises following procurement. A clear and enforceable service-level agreement (SLA) should outline rights, responsibilities, termination clauses, and data ownership terms. Consider asking for the removal of any auto-renewals clauses so you’re better positioned as you near the end of the service lifecycle. Other contractual issues to consider include data security, indemnification, liability limitations, and dispute resolution mechanisms.
• SaaS system of record – Once a purchase order has been accepted, it’s wise to set up a SaaS management platform or system of record (SSoR) if you don’t have one already. Such a tool gives you a top-down view of all your SaaS applications, helping you keep track of licenses, renewal dates, and overall expenditures, as well as utilization and performance of your solutions. The Vertice platform offers this functionality and can make your business more cost-effective.
• Centralized procurement process – By letting a SaaS procurement platform such as Vertice handle your approval workflows, you can save time and money by streamlining the process and potentially receiving discounted pricing from your vendors.

The advantages of adopting SaaS procurement within your organization

A strong SaaS procurement process can yield numerous benefits. From SaaS spend management and optimization to reduced risk exposure to a more frictionless experience for your employees, robust software management procedures can unlock significant efficiencies and savings — both in time and money. Here are the key advantages of leveraging SaaS procurement with a platform such as Vertice:

• Centralized management – With all your SaaS vendors managed within a single platform, it’s easy to manage multiple services and subscriptions. Vertice’s unified platform combines this benefit with greater cloud visibility across your environment, enabling you to holistically monitor all aspects of your solutions.
• Efficient spending – With a clear picture of how your organization is using products, you can make sound financial decisions by reducing technology overlap or eliminating unused subscriptions. Furthermore, SaaS procurement software such as the Vertice platform can help you get the best price for your solutions by negotiating on your behalf whilst also aiding software spend management with expert cost-saving recommendations.
• Shadow IT mitigation – The use of shadow IT by employees is typically the result of shortcomings in your existing stack, either through visibility limitations or a shortfall in capability. With an effective SaaS procurement solution, it’s quicker to approve new software and tools that improve workforce efficiency, in turn reducing the use of unauthorized tech.
• Vendor management – Under a centralized procurement platform, you can streamline processes surrounding vendor selection, evaluation, and contract management. Consistent performance monitoring through in-depth reporting means you can be sure you’re getting what you’re paying for, making vendor relationship management considerably easier.
• Compliance and security – With greater understanding of your stack, your IT teams can more quickly be alerted to potential risks or attack vectors and better leverage the security measures of your SaaS providers. Closer monitoring of your vendors can help ensure compliance and regulatory requirements are met, or seamlessly remediate the situation where things fall short.
• Renewals management – With the average company using more than 100 SaaS applications, staying on top of renewals can be burdensome. Underutilized tools and auto-renewal clauses can lead to wasted spend. With proper oversight of your SaaS licenses and renewal dates, you’ll ensure there’s no disruption to the services you do need and find opportunities to save on the services you don’t.
• Agility and scalability – Part of the power of cloud-based services is the ability to grow or shrink based on users’ needs. By using a SaaS procurement platform such as Vertice, it’s easy to monitor your usage and make real-time adjustments to your solution so it meets your business requirements as they evolve. Likewise, new applications and features can be deployed at greater speed once you reach the later stages of your software procurement process.
• User experience and adoption – With strong SaaS procurement processes in place, you’re more likely to select the ideal solution for your business needs, and those of your end-users. In turn, you’ll drive higher adoption rates along with improved productivity and employee satisfaction.
• Integration and interoperability – Ease of communication between SaaS applications is a must, even if you’re using a consolidation-led solution. With a strong software procurement process, you can better integrate new tools with your existing IT infrastructure, and enable data exchange and workflow automation between different systems.
• Analytics and insights – Centralized SaaS procurement and management can offer more detailed reporting and analysis so you can see how your tech stack is performing across your entire organization, empowering your strategic planning with data-driven decisions.
• Risk mitigation – Along with reduction of shadow IT usage in your organization, risks associated with outdated or unsupported software can be minimized thanks to frequent patches and updates from your SaaS providers. Careful evaluation of contract terms can also diminish the risk of vendor lock-in.
• Continuous improvement – Embracing strong SaaS procurement practices can encourage ongoing evaluation and optimization of your cloud stack, identifying potential areas for improvement. By choosing the right vendors, you’ll benefit from regular enhancements to your products plus greater uptime and improved support for your workforce.

Why work with a procurement partner?

For the average organization, SaaS procurement is a drain on time and resources. Without experience of the SaaS market, it can sometimes feel like you’re shooting in the dark to secure the best solutions for your business. This is when you need a procurement partner.

Vertice can manage the entire procurement process for your company. We help to assess business needs, liaise with sellers, inspect contracts, and negotiate. By leveraging our existing vendor relations, we secure deals that all parties stand to benefit from — with a lower cost, faster turnaround, and none of the hassle.

Modern organizations deploy more software products than ever before, and as SaaS costs continue to rise, you can no longer afford to lose time and money to inefficient procurement.

Find out more ›

How the Vertice SaaS Purchasing Platform maximizes stack efficiency

With a growing number of software licenses in many businesses, maximizing stack efficiency is becoming harder to achieve. If your company is struggling to manage its software subscriptions — including all the unique complexities of contract renewals and vendor relationships — then rest assured: you’re not alone. 

The pervasiveness of this struggle is exactly why Vertice exists. Our SaaS Purchasing Platform is an example of a SaaS procurement tool, providing businesses with the visibility they need to make informed decisions about the health and performance of their entire software footprint. 

Through the continuous monitoring of your SaaS products, the Vertice platform highlights where cost savings are possible. It helps identify underutilized features, neglected subscriptions, auto-renewal dates, and scorecard assessments — all from one centralized dashboard. From there, businesses can finetune their approach to SaaS procurement with a thorough understanding of what it is they need.

Our customer purchasing teams can also assist with your SaaS procurement more directly. We’ve benchmarked pricing data from over 16,000 software vendors, so we know exactly what businesses similar to yours have paid for the same subscriptions. We then use this information as leverage during contract negotiations, driving the hardest bargain based on the current market. 

Pricing obfuscation has been a common frustration in SaaS purchasing for many years; our exclusive market insights provide a simple solution, and have become invaluable to SaaS procurement teams across a range of industries and business sizes. With help from Vertice, you’ll never overspend on SaaS procurement again. 

Take a look at some of our customer success stories below:

• Crunch saved over $100,000 within the first three months of partnering with Vertice, with 700% ROI in the first six months;
• Holidu cut $330,000 from its annual SaaS bill with an ROI of 800%;
• Shoosta achieved ROI within 30 days of its Vertice partnership.

If you want to start getting the most out of your SaaS procurement efforts, click the Contact Us button at the bottom of this page to get in touch.

Understand your SaaS needs

The crucial first step of the procurement process is to identify what your business needs from a given SaaS solution.

It may be that your marketing department has asked for a new sales intelligence tool, or HR needs a timesheet solution — or, an entire suite of collaboration tools may need replacing to better facilitate a remote workforce. Understanding your requirements can help direct your research toward new prospective tools.

• Streamline your software procurement
• Review your previous software purchases

Whatever your needs, Vertice can help you to understand what vendors are the best fit to provide you with fulfilling solutions.

Discover your portfolio's potential

Not only can Vertice assist you in procuring new software solutions, we also help you to gain full visibility into your existing SaaS stack. This way, you can see which tools are being used by which teams and make more informed procurement decisions.

This is a vital step toward efficient procurement, because there’s every chance that tools within your existing portfolio could fulfill one of your business needs.

• Discover your entire software stack
• Address your maverick spending
• Identify instances of SaaS duplication
• Gain control over SaaS sprawl

By consolidating your software management into one convenient dashboard, Vertice can help you to unlock the potential of the SaaS already in your arsenal.

Negotiate with real leverage

When it comes time to purchase a new piece of software, the price you’re quoted isn’t always set in stone. Our expert team of negotiators help companies to pay less for their SaaS and ensure optimal contract terms.

As well as long-standing seller relations, we leverage pricing benchmarks from over 13,000 global software vendors — identifying discounts that have been offered to companies like yours that could be matched or beaten.

• Gain leverage with pricing benchmarks
• Learn the best software negotiation tactics
• Consider a multi-year SaaS contract
• Delegate the handling of negotiations
• Use third-party mediation
• Fight back against SaaS pricing obscurity

Our negotiators have years of experience from either side of the SaaS purchasing process — using strategies that ensure that our clients pay the lowest possible price.

Ensure smooth onboarding with new tools

Once you’ve selected your new software, you can begin the onboarding process across your organization. As well as training members of staff in new workflows and processes, you’ll want to consider:

• Termination of legacy tools and contracts
• Deletion or transfer of data
• Documentation of new contract information
• Ensuring compliance across new systems

To ensure a lean, compliant stack of secure SaaS tools, Vertice can help you to monitor usage across the organization and inspect and manage the terms of each contract.

Challenges facing SaaS procurement

SaaS procurement is a multi-faceted, multi-department process. As such, businesses must overcome numerous challenges to ensure succesful SaaS procurement initiatives. We’ve highlighted some of these in the list below:

• Identifying the right software — During the SaaS procurement process, you’ll find that there are many tools competing for market dominance in a specific area. Each of these tools differ slightly in terms of platform features, business suitability and pricing structures, so identifying the right one for your business needs requires meticulous attention to detail. Enlist the support of potential end-users to help you make the right decision. Without consulting relevant stakeholders, contract negotiations can become muddled and you may end up with a solution your team neither wants or needs. 
• Vendor credibility — Your research into new SaaS tools should cover both the software and the supplier. You’ll need to have assurances over your vendor’s financial health and whether or not it’s been involved in any recent scandals. 
• Negotiation tactics — Both you and your vendor will look to secure a contract that suits them.  Within that dynamic, it’s important not to bend to their will and compromise on important aspects of the contract, or engage in aggressive negotiation tactics. Your procurement teams should have a clear negotiation strategy in place, understanding that the best situation is one that benefits both parties. 
• Securing SLAs — Service level agreements (SLAs) constitute a significant contract negotiation aspect, laying out your expectations of the level of service you’ll receive from both the supplier and their product. Typical SLA components include product uptime, KPIs, and account support. When suppliers fail to live up to these commitments, there may be legitimate grounds to cancel contracts early.
• Vendor relationships — Closely tied to the bullets above are vendor relationships. The best way to secure value over time is to nurture and maintain a healthy partnership with your provider. Remember that software vendors are managing their own business too, and mutually beneficial relationships will enhance the quality of the product and service in the long-run, as well as removing the need to face the challenges of procurement all over again.
• Data security — SaaS procurement brings with it an element of jeopardy, not least because of data security concerns. Make sure negotiations include a discussion on who owns the data within the new solution and how this data is protected. 
• Integrations — SaaS integrations with existing systems and other software tools are key selling points, but these sometimes come at an extra cost. Be aware of which integrations come ‘out-the-box’ and which are available only as an additional perk. 
• Vendor lock-in — It’s within the interests of software vendors to commit their customers to long-term contracts. You’ll likely even receive a significant discount if signing up to a multi-year subscription, a common tactic suppliers use to incentivize customers into making these commitments. If you’re procuring a new solution, there’s lots of uncertainty around its ease-of-use and its performance, so it’s best to avoid long-term contracts from the outset. After all, there’s nothing worse than paying for a subscription you don’t like or need. Once you’re confident of the platform’s facility, vendor lock-in is a good way of achieving consistent cost savings. 
• Onboarding — Your arrangement with a new supplier should cover the onboarding process. This refers to the time it takes for your IT team and end-users to familiarize themselves with the product and how it works. The biggest obstacle to a successful onboarding process comes from your own team, failing to encourage their buy-in can render this process obsolete. 
• SaaS analysis — Although individual procurement projects concentrate on the acquisition of one product, procurement processes are at their most robust when businesses continuously analyze their stack in search of the next solution. Investing in a SaaS procurement platform is the best way to carry out this analysis.

Tech stack management and SaaS procurement

Effectively managing your tech stack is only possible with clear visibility across the subscriptions within it. Without this, software tools and the features they contain can become entirely redundant, with no accountability over which team or department is responsible for the ongoing subscription. 

Achieving SaaS visibility is the springboard towards successful procurement efforts. Here are some considerations of how best to manage a tech stack in relation to SaaS procurement processes:

• Minimize feature overlap — Visibility of what exists in your current stack will ensure you avoid paying twice for the same features. SaaS procurement software is helpful here, providing usage data and performance reviews of every solution in the stack in search of cost saving opportunities. 
• Integrations — Wherever possible, you’ll want newly procured solutions to be able to integrate with your existing stack. Every solution will have natural integrations included at no extra cost, but they may not be the ones you want or need. At the start of the procurement process, as part of your market research, look for software tools that come with out-the-box integrations with your existing solutions or offer extensions at an additional fee. 
• ‍Onboarding and staff training — When new products enter your stack, their success hinges on your employees’ ability to use them well. Professional onboarding services are essential in the early stages of post-procurement. These services often only exist for a finite period, so it’s important to identify the member of staff who will train new employees at the end of the onboarding period.

Vertice in action

How we recently helped a technology company save big on their SaaS costs.