How Internal Procurement Teams Can Save Time and Money

Procurement

Vendr | Simplify your procurement strategy with our comprehensive SaaS buying platform
Written by
Vendr Team
Published on
February 15, 2022
Read Time

Vendr | TwitterFacebook iconVendr | LinkedIn

If your company is in a growth stage, you're probably aces at managing your SaaS stack internally. After all, if you're scaling up, you're likely working with great procurement managers or have a procurement process that's meeting everyone's needs and getting the job done.

At the surface, working with an outsourced procurement expert seems redundant to the job a procurement function is already doing. It can be a tough argument to justify spending the money on an additional provider, even if you know it will save money in the long run. However, there are some benefits to partnering with an outsourced software buyer that will improve the productivity of your procurement team, and create a more efficient SaaS management function overall. 

Kickstart your procurement processes with Vendr's free step-by-step templates that streamline your workflows and empower your stakeholders.

Here are some of the main ways that internal procurement can save time and money by working with a SaaS buying resource:

Working with a SaaS buyer allows in-house procurement to focus on major spend.

What happens when your procurement team is dealing with a major purchase or renewal?

For example, if AWS, or another mission-critical piece of software, is approaching renewal, all hands need to be on deck. These types of procurement cycles require detailed internal processes, many stakeholders, and offer a big opportunity for savings. Managing purchasing decisions from the inside of the company is much more effective than working with an outside buyer who only has a familiarity with the company's needs.

But while this is happening, dozens of SaaS products may be auto-renewing behind the scenes as negotiations are ongoing with Amazon. There simply isn't enough time in the day to focus on a handful of $30k-$300k purchase orders when AWS is quoting the company at $5m+. How can a growing team optimize major and minor purchasing functions?

Internal procurement should be focused on spend thresholds over $1m. These types of software investments are extremely customized the organization's business needs, involve specific expertise, require internal controls, and require a strong internal network.

Software spend under $1m is, typically, not worth procurement's time. These customer-supplier relationships can be very time consuming, may require multiple calls, and will only yield a fraction of the savings. Yet, across dozens of these vendors, the opportunities for saving add up.

Dedicated SaaS buyers with these small vendors daily. They are familiar with suppliers' processes, and have uncovered negotiation leverage opportunities. Not only does this mean that companies using an external procurement solution are getting fairer contract terms for small contracts, they're also freeing up internal teams to manage and broker better high-value deals.

Outsourced procurement refines internal buying strategy. 

The most successful companies have a very detailed internal purchasing process that is constantly being refined and tweaked. These processes allow purchasing to scale in an efficient manner and block rogue software spend. These policies and procedures typically involve details that go up to the decision point of the purchase, such as evaluation process, purchase orders, approval processes, KPIs, RFPs and SLAs. 

These spending and procurement processes aren't just a nice-to-have: they are critical to maintaining your company's bottom line by ensuring there's no rogue spend on software. 

Procurement’s time is best suited continuing to refine these processes and strategy to keep your software spend efficient. Their time is wasted going back and forth with reps on numbers or coordinating contract details with legal and security. 

SaaS buying partners take these tedious tasks off of procurement's plate. They act as the central point of contact for vendor sales reps, legal, and security to manage the purchase requisition process, improve workflow and save time. This managerial efficiency allows internal experts to manage the purchasing needs of your employees and managers. 

Working with an external partner enhances internal knowledge.

Software is constantly evolving, whether through price changes, new players in the market, or technological shifts. As your company scales, your software needs are going to become more diverse, and there will be a dozen providers competing for that spot in your tech stack. Assessing software options has the potential to be your procurement team's full-time job.

Procurement shouldn’t worry about becoming experts in the sales process for over 1,000 different vendors with 1,000 different purchasing lifecycles. Instead, they should be able to focus on setting high-level procurement strategy and processes that can be replicated across departments and needs.

Procurement teams that parter with a SaaS buyer can take advantage of the buyer's industry knowledge from working with similar companies. At Vendr, we've discovered a 70% overlap across our customers' SaaS stacks. We can offer opinions and guidance on what we've seen similar companies doing. This way, procurement and your purchasing stakeholdres don't sweat the details. 

Negotiation experts broker better deals.

Love to negotiate with SaaS vendors? Great! 

In fact, we’ve found that if procurement takes the lead on a SaaS purchase or renewal and leverages their personal expertise while partnered with information that a SaaS buying expert has gathered from previous purchases and renewals, the outcomes are far better. Deals are brokered in a timely manner, contracts are fairer, and ultimately the salesperson and the buyer are happy with the result. Instead of a segregation of duties, the SaaS buyer develops a comprehensive partnership with the procurement department.

However, negotiation isn't for everyone. Oftentimes, companies are trying to onboard new software solutions quickly-and-painlessly, so cost-savings are left on the table. In the long-run, these compromises during the negotiation process can lead to overspending on an annual basis, impacting profitability.

When you hit a standstill in a negotiation, it's time to bring in an external SaaS buying expert. If a SaaS buyer has worked with that specific vendor before, they have a playbook of tactics to improve your negotiation. If the vendor is new, they have the data from millions of dollars in software spend to back up their strategy.

How Vendr can help your in-house procurement team.

Is your procurement team struggling to give each deal the attention it deserves? Vendr's SaaS buying solution offers both a product and people-powered service to enable fast-growing companies to procure software quickly and with guaranteed savings. 

Vendr has facilitated over $1 billion in SaaS purchases across 1,200+ suppliers for finance and procurement teams at companies like HubSpot, Brex, Canva, Reddit, Toast. With leveraged knowledge of thousands of transactions and billions of data points, the Vendr team partners with your organization to streamline your entire SaaS buying process to get your team working on better software, faster.

Looking for more? Learn how we help consolidate your tech stack, perform a free savings analysis, and identify buying process challenges all before you even become a customer with our self-guided tour of our SaaS buying approach.

Originally published July 2019 by Chris Alto.

Vendr Team
Vendr's team of SaaS and negotiation experts provide their curated insights into the latest trends in software, tool capabilities, and modern procurement strategies.

Similar posts

Learn more about finding, buying and managing your SaaS stack with resources from our experts.

What Does a Procurement Manager Do? + How to Become One

Vendr Team

Procurement
What Does a Procurement Manager Do? + How to Become One

Wondering what a procurement manager does in their day-to-day work? Here’s everything you need to know, including tips for entering this field.

Read post
What Does a Procurement Specialist Do? And How To Become One

Vendr Team

Procurement
What Does a Procurement Specialist Do? And How To Become One

A procurement specialist is the glue keeping an organization together with what it needs to operate. Read on for more on what this position entails

Read post
The Future of Procurement: 80% of the Value at 10% of the Cost

Ryan Neu

SaaS Buying
Procurement
The Future of Procurement: 80% of the Value at 10% of the Cost

The procurement tech landscape is heating up, but for many procurement leaders, cost is still a barrier for adoption. Today, we’re taking a look at how Vendr is delivering the technology procurement leaders need at a fraction of the cost.

Read post