What is centralized procurement in SaaS?
Centralized SaaS procurement is a model in which all software purchasing decisions are made or approved by a single department, often either IT, procurement or finance. By having a streamlined process for purchasing and renewing software solutions, organizations can ensure they have total visibility of their SaaS apps, prevent wasted spend and maximize purchasing power.
Related Definitions
Decentralized Procurement
What is decentralized procurement?
Decentralized purchasing in SaaS refers to the process of allowing individual departments or teams within an organization to make their own purchasing decisions for software applications. This is in contrast to a centralized purchasing model, where all purchasing decisions are approved by a single procurement team or a department such as finance.
While a decentralized purchasing model can provide teams with the flexibility to select and purchase the tools that best meet their needs, without having to wait for approvals or navigate bureaucratic purchasing processes, it can create challenges for the company. This can include reduced buying power, higher costs, lack of control over vendor relationships, and increased compliance and legal risks.
Cloud Instances
What is an instance in the context of cloud computing?
In cloud computing, an instance refers to a virtual server provided by a third-party cloud service, for example AWS, Azure or Google Cloud. These instances ultimately enable companies to deploy and run their applications or services in the cloud, in a scalable and flexible manner. This is because instances are on-demand and can be adjusted based on your workload requirements.
Zero-Based Budgeting
What is zero-based budgeting?
Zero-based budgeting is an accounting technique that requires all expenses to be justified and approved for each financial period, starting from zero rather than a pre-existing spend. This enables organizations to monitor and assess the necessity of each cost on a more granular level, lowering expenses and promoting fiscal responsibility.
Originally conceived in the 1970s, zero-based budgeting isn’t a new idea — but in the current economic climate, accounting for every dollar is helping businesses to regain control over their outgoings. The technique can be applied to a wide range of costs, from research and development to asset management.
Outsourced Procurement
What is meant by outsourced SaaS procurement?
Outsourced procurement in SaaS refers to the process of hiring a third-party vendor to manage some or all aspects of a company’s procurement process. This can involve negotiating with vendors on your behalf to secure the best possible price and terms on any SaaS contract, while also refining, implementing and enforcing procurement processes that ultimately protect your business.
SaaS Stack
What is a SaaS stack?
A SaaS stack is a collection of software-as-a-service (SaaS) applications and tools that are used across an organization. While the specific contents of any SaaS stack will vary depending on the nature of the business, it will typically consist of communication, collaboration, sales, marketing, HR, finance and data analytics software.
Cloud Unit Economics
What is cloud unit economics?
By definition, cloud unit economics refers to the financial analysis and evaluation of both the costs and revenue associated with operating a cloud-based business.
In other words, it’s a way of looking at how much it costs to run your business on the cloud, as well as how much it brings in.