If your company is growing, department heads and employees are likely starting to ask how they can procure their own software solutions. Or worse, employees starting to buy and manage software themselves without following procurement policies.
This means that it’s likely time for your company to streamline your software procurement process with a SaaS buying platform.
Why? SaaS buying platforms save senior leaders time, money, and frustration in negotiating and tracking SaaS spend. However, the business case for an outsourced SaaS buying partner can be tricky to make.
Sam Gorgone, member of the Vendr sales team, and Kelly Higgins, a Customer Success Manager, hosted a webinar to share the benefits of implementing a SaaS buying platform for procurement teams. They shared their take on the key benefits our customers gain from using the platform, and specific ways that this streamlining improves the process of buying software for the company.
This guide explains what a SaaS buying platform is, how to know if a SaaS buying partner is a good fit, and some of the biggest benefits of implementing this business process.
- What is a SaaS buying platform?
- Why a company needs a SaaS buying platform
- 3 problems that a SaaS buying platform will solve, according to the SaaS buying experts
10 steps to improve the way you manage and buy SaaS.
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What is a SaaS buying platform?
A SaaS buying platform is a software and service that helps companies find, buy and manage their software and tech stacks. In order to best manage a software library, the SaaS buying partner analyzes the company’s SaaS stack. Finance and procurement leaders share historical SaaS purchases and the platform shows how much the organization can streamline contracts, costs and end use.
Why a company needs a SaaS buying platform
All companies deal with some of the same challenges in SaaS buying:
SaaS spend is going (way) up
SaaS spending climbs year over year— 20+ percent according to Gartner. On an individual basis, companies in growth mode are spending more than ever on SaaS tools. As headcount and products expand, the types and volume of new software purchases will continue to keep pace.
SaaS pricing is miles from straightforward.
Software pricing on high-value or enterprise contracts can vary considerably depending on several factors: In the end, some companies are overpaying by 20-30 percent on SaaS.
Good negotiation also factors into the subscription price. Procurement leaders might be expert negotiators, but as stakeholders buy software quickly, they might not be as up to speed on the right levers to pull when signing a new deal. Several contract practices may make a purchase seem like its offered at a fair price, while quietly increasing the unit economics over time.
Stakeholders waste time buying SaaS
Software buying is an in-depth process with specific workflows, benchmarks, review periods, and security checks. While having a point person is essential to a smooth buying experience, a stakeholder likely isn’t the best person for the job. Firstly, procurement is critical work and deserves a dedicated champion. Secondly, no matter how well-prepared the stakeholder is, negotiating contracts and establishing fair pricing requires deep industry knowledge and fresh data.
3 problems that a SaaS buying platform will solve, according to the SaaS buying experts
Demystifying SaaS spend
When a company buys SaaS software, it can feel a bit like a shot in the dark. Software buyers don’t always know if they’re getting the best price or the best terms. Keeping on top of the competitive landscape is a full-time job. The data is always changing, as are contract terms and requirements.
During the Vendr webinar, Sam says “two companies can be purchasing the exact same software products. But depending on the rep they're working with, the time of year, the importance of the logo, the lifetime value projections based on the size of the company – those two customers could have different prices on that product.”
In some cases, contracts get more expensive the more the company uses.
This is one of the first and biggest areas that a SaaS buying platform can help understand. Having visibility into SaaS spend will help optimize software buying. With up to 80 percent overlap in the tools used, the SaaS buying partners have a unique view of the pricing our customers should expect.
A SaaS buying platform can show buyers if the price is in line with other negotiations. SaaS buying partners can also offer advice, and even head up negotiations on the buyer’s behalf.
SaaS buying partners also help customers steer clear of expensive contract pitfalls in contract agreements, such as bundled subscription pricing, auto-renewal clauses, and poorly structured scalable contracts.
“No customer should be penalized for growth,” says Sam. “They should be rewarded or incentivized – which often isn't the case with SaaS apps’ retroactive overages.”
Breaking down the deal in this way improves the unit economics of every SaaS subscription, allowing customers to benefit from competitive pricing and favorable terms.
Systematizing the SaaS buying process
No process? No problem. For customers still early in their formal SaaS buying programs, the SaaS buying platform will help create systems that support well-positioned negotiation and efficient buying.
The first stop is to evaluate the company’s current tech stack, buying process and software spend. A good SaaS buying partner will meet the company where it is, determining where to begin saving money within the contracts currently up for renewal. They can also advise on software functionality and identify any opportunities to reduce SaaS redundancies. Any new upcoming SaaS spend can also be part of the early evaluation phase of the customer relationship.
Sam often suggests looking at the biggest spend items in engineering and marketing, where big-ticket contracts are commonly found.
“The five most widely used tools across a team are the five most expensive tools the team uses. That will show the lion's share of the spend so SaaS buying partners can identify where some of these savings opportunities are.”
By finding the low-hanging fruit, teams can begin to realize big cost savings immediately. Over the software buying lifecycle, SaaS buying partners continue to find areas of incremental savings and impact (such as de-duplication, usage analysis, opportunities for integrations, identifying orphaned licenses or contracts) and use the dataset and insights gained through negotiating use cases for thousands of clients to save the company even more money over time.
A SaaS buying platform creates a seamless buying process by establishing the appropriate workflow for the buying process, involving the stakeholders during the necessary intake process, then freeing them up for other things. Partners interface with finance to ensure budget requirements are met. Then, they check the software and implementation against security and IT needs to ensure compliance.
Through the platform, the best SaaS management partners set customers up for success at renewal time, taking the surprise and guesswork out of the re-up process. By relying on both usage data and our negotiating dataset, the SaaS vendor evaluation process is completed with plenty of time and information on the buyer’s side.
Kelly explained that once a contract is signed,“SaaS procurement partners stand up a new deal in the SaaS management platform so that we can track for the next renewal and then get started on that process 120 days ahead... we ultimately can use time as our lever.”
With this advanced notice and outside deal flow support, CFOs and finance teams will be fully informed and ready to evaluate the new deal and increase the capital efficiency of their SaaS spend.
Reducing SaaS buying busywork
Heading up renewals and new contracts is a time-intensive process. The common bottlenecks and pitfalls of organizing stakeholders and approvals can make a three-week process into a months-long endeavor for each contract.
A SaaS buying platform is a management solution that reduces these bottlenecks by streamlining the process, then shepherding deals through the necessary budget and approvals. SaaS buying partners make sure the right people have the information and lead time they need to fully understand and approve deals, even with a lot on their plates.
One area where this coordination effort is highly effective is the legal department. Legal teams are often stretched thin, with hundreds of contracts for review. This lack of time sometimes means that negotiating with SaaS companies is not always a priority.
With a SaaS buying platform, procurement teams have both the bandwidth and coordination to make sure every contract gets timely and necessary attention.
“SaaS buying partners will connect your legal team directly with the suppliers legal team so that we can let the professionals get the job done in the most efficient way possible,” says Kelly.
This hands-on approach means that procurement, legal, and other valuable teams can work on the high-impact parts of their job, leaving the details to an outsourced partner.
This process isn’t just for growing companies or startups. Even large companies with fully-formed procurement teams “view SaaS buying partners as an extension of their team and that negotiation arm,” says Kelly.
“SaaS buying partners can take that piece of work off of procurement’s plate, so that they can really focus on the higher-priority tasks for their specific team.”
Without a platform, teams spend countless hours engaging in the perpetual cycle of negotiation and vendor management for the very products meant to speed business along.
Vendr is the SaaS buying partner and platform that your company needs.
Vendr partners with your procurement, finance, legal, security and IT teams to manage and improve your SaaS stack, saving you on all costs along the way.
Vendr's executive buyers negotiate directly with your suppliers to save money on renewals. We organize your renewal dates and aggregate your SaaS contracts — and then email vendors for you. Our customers get blindsided by unfair pricing.
Get an inside look into the platform where you can discover and buy new tools, see how much you're saving on software, and stay up to date on your IT stack with our free guide to the Vendr SaaS buying platform.
Originally published August 2021. Updated April 2022.