Key takeaways:

  • Achieving efficiency in procurement is a continuous function that evolves as an organization changes. 
  • Increased transparency in contracts and spending helps stakeholders increase efficiency. 
  • Well-organized and thorough pricing data, metrics, and scope knowledge are vital to an efficient procurement organization. 
  • Specialized expert negotiations can be the difference between efficiency and inefficiency in procurement management. 

Companies of all sizes know that it takes good tools to drive growth. They also recognize that inefficient software purchasing quickly creates headaches for both the budget and technical infrastructure. 

Companies who prioritize their tech stack keep  a handle on day-to-day tech management, SaaS licensing agreements, and legal and security concerns. This requires ongoing efforts to maintain a procurement process that is cost- and time- efficient.

While procurement professionals work to ensure stability, save money, and negotiate purchases and SaaS renewals, partnering with a supplier to manage parts of the sourcing process is critical in achieving process efficiency.

In order to create a more efficient procurement function, teams must understand their current SaaS usage, costs, and value. With this information about the SaaS supply chain, they can enter the software purchasing process armed with information to make the negotiation, licensing, and purchasing process simple and straightforward.

For companies pursuing a more efficient procurement process, we recommend three tactics to save money and time when purchasing new software:

1. Encourage transparency to reduce “dark spending” 

Without a transparent procurement process, employees will purchase their own software solutions. They’ll be left to fend for themselves when it comes to sourcing, negotiating, and signing contracts. 

This means veering outside the approved procurement function, resulting in so-called dark spending (also called rogue or maverick spending) through expensing or corporate cards. At best, these off-the-record or rogue purchases create unnecessary licenses and a hidden drain on resources. At worst, they open the organization to security or regulatory risks. Furthermore, if accounting isn’t looking for rogue software purchases during expense reporting, they can go unnoticed indefinitely.

Think about the current state of SaaS spending within your company. What is the process for those spending to access available contracts, compare prices, and determine the best available suppliers? How often do you conduct a SaaS spend analysis?

How transparency helps improve SaaS buying

Procurement systems — like e-procurement, contract management, spend management, and supplier relationship management — can offer the transparency needed to make better spending decisions. In other words, use tools and solutions to help stakeholders help you. 

SaaS vendor management increases transparency by making suppliers, contracts, and costs easy to access. Rather than use complicated contract-management spreadsheets or databases, outsourcing SaaS management to a reliable solution is a huge time-saver for your procurement team. 

By outsourcing procurement activities, the renewal process is put on auto-pilot so that the procurement team can sink its teeth into more impactful projects.

2. Make more informed SaaS buying decisions with better pricing, data, and scope knowledge

Pricing research and scoping are time-consuming parts of the procurement process and often include detailed requests for quotes and proposals. But without this process, making informed purchasing decisions — much less optimizing procurement efficiency — is nearly impossible. 

But, the truth is, the SaaS purchasing process can feel a bit like searching in the dark. Often, pricing is subjective, based on factors like time of purchase, license volume, pricing model, sales cycle, sales rep, or even your company size and reputation. 

With so many variables in play, insight into the SaaS buying process can create meaningful cost reduction and lower the friction of the deal. 

How insights aids the procurement process

When in-house resources are limited, procurement can use a SaaS management solution to help stakeholders become more educated about the purchasing process. These software purchasing experts will share  what solutions work best, present possible vendors, and recommend data-based decisions about how to move forward. 

With good data organization, the SaaS management and procurement teams might even direct stakeholders to tools already available in-house. This level of organization can make projects more efficient without wasting money and effort. 

Relying on the data of a vendor management platform can significantly improve pricing outcomes. By giving procurement teams access to historical pricing and metrics of other benchmark organizations, buyers are informed with information that can make their negotiations stronger and more fair.

This access to insights is also a time-saver, cutting to the chase of pricing without the long sales cycle and “courtship” phase. This streamlined approach isn’t just good for the buyer; it allows both sides to work better, move deals along faster, and emerge from negotiations feeling more confident in the deal. 

3. Enhance procurement efficiency with negotiation professionals 

Procurement professionals don’t operate in a vacuum. While they’re ultimately responsible for understanding negotiation tactics, bidding, and approvals processes, SaaS purchases require buy-in from multiple stakeholders: engineering, finance, legal, IT, compliance, and security.

Because multiple departments are constantly in the SaaS management weeds, hundreds of thousands of dollars are spent on human capital, yielding results that only offer limited cost savings. 

Further, internal teams also often lack data and negotiating skills, diminishing the overall benefit of internal procurement strategy.

As a company grows and scales, the cost-efficiency of cross-functional processes lessens. This creates a compelling business case for streamlining the process via procurement outsourcing to a vendor management solution. 

How SaaS management improves negotiation

SaaS vendor management professionals are highly trained and specialized in negotiating SaaS purchases. These SaaS buying experts can relieve those procurement pain points while also implementing workflows that ensure the best deals. 

Not only does utilizing this resource  reduce spending on software, but it also means that stakeholders can turn their attention back to the work that matters. It's a win-win. 

Who's behind the wheel? Manage efficiency in procurement through strategic partnerships 

As an organization grows, what is the procurement department doing to ensure that its process and tech stack grow with it? While procurement teams are well-versed in complex management, the truth is it doesn’t have to be so hard.

SaaS management, after all, is also stakeholder management. A streamlined, transparent process means implementing purchases, vetting contracts, and ensuring timely renewals. This results in every stakeholder knowing what’s currently available, having insight into the procurement process, and the ability to work on future projects with efficiency and transparency.

Relying on a SaaS buying and management solution can get teams back to the most meaningful and enjoyable parts of their job, allowing the outsourced team  to mind the small stuff so they can focus on their big-ticket items.

Is optimizing efficiency in procurement a must, but there just isn’t enough time in a day? Let us show you how we can help. Contact Vendr today.

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