Best practices for tracking SaaS spend and resources
Oftentimes, companies of all sizes have no central tracking for SaaS spend management. We’ve noticed customers ranging from 200 to 2,000 employees all needed a solution for centralized SaaS management.
With no easy way to get context on your SaaS stack, including pricing, contract status, stakeholders, etc. you risk sending time and money down the drain. Between upcoming auto-renewals and unused software licenses, the dollars add up quickly.
The importance of investing resources in SaaS management
The biggest reason for investing in SaaS management is to provide optionality for your stakeholders and business. If you’re relying on a salesperson or account manager to give you a heads up on your upcoming renewal, you’re likely finding out too late.
Most of your contracts will need to expand, and if you’re aiming to negotiate economies of scale, upgrades, or additional features outside of a 60-90 day window, you have very little leverage.
Start with a simple SaaS spend spreadsheet
To get started on documenting your spend, we suggest working in a simple spreadsheet. Start by tracking:
- Product: The SaaS tool
- Supplier: The company you’re buying from
- Stakeholder: The internal point person for the purchase
- Department: The team requesting and using the software
- Annual spend: How much your spending on the software on a yearly basis
- Renewal date: You can know everything you own, but if you don’t know when software is set to renew, you’re going to own it forever
Don’t feel like you need to get every SaaS tool ever purchased to start — focus on the top five tools from each department. We’ve found that the top 15 suppliers in a company’s SaaS budget make up 85% of software spend.
Take note of your big spenders and invest extra time with those teams. We usually see engineering and revenue operations topping the list. Engineering typically owns cloud hosting and infrastructure monitoring while revenue operations owns the line items associated with sales and marketing, including payment processing and marketing automation tools.
One of the first things to look for when you begin to take stock is duplicative software.
This is a result of siloed processes and leads to redundant contracts with separate maintenance or annual admin fees, along with obscure license volume, which could affect pricing.
You might notice four or five project management tools; three or four contract signature tools; and so on. Start to survey department heads for their favorite tools and pick one. This exercise can expose a tool that’s favored but might not scale well, one that wasn’t well-liked but other departments assumed widespread satisfaction, and so on.
Try to understand what products are business-critical and what are potential churns when you’re working with department heads on this audit, so you can note that context for when you go into renewal conversations.
If you ask stakeholders what tools they own, they'll give you a lightweight list of company names. If you ask for their contracts, you'll be waiting forever on a response. Instead, contact each supplier to get your hands on the actual contract since they are required to give you access.
Choose a SaaS documentation project owner
Ensure ongoing project ownership to successfully manage SaaS. If you only ask people to add to a spreadsheet once a year with no clear owner, it’ll be out of date within a month.
We’ve seen high-growth tech companies assign someone within FP&A or a junior operations person to take this on. IT should be a stakeholder in the process since they’re responsible for monitoring SSO. We have customers with 1000+ employees with a single SaaS management owner, but that only works when there’s a clear process behind it.
Tracking SaaS spend is not for the faint of heart. It often requires manual processes, tracking down the right people and contracts, and countless hours keeping things organized.
If you're tired of working in a spreadsheet, it's time you automate your work and focus on more strategic work with Vendr. Check out our industry-leading resources to improve your SaaS buying process.