Large companies and small startups know that it takes good tools to drive growth. They also recognize that inefficient software strategies quickly create headaches in both the budget and technical infrastructure.
These savvy organizations know that keeping a handle on day-to-day tech management, licensing agreements, and legal and security concerns requires deep insight into the procurement process.
However, just because a procurement team is in place, doesn’t mean they have to go it alone. As the procurement team works to ensure stability, save money, and negotiate purchases and renewals, outsourcing some aspects of the procurement process can free up time to pursue more important initiatives.
There are several areas where procurement can shine in delivering better cost-efficiency, while taking advantage of the data, negotiating power, and procedural knowledge of a strategic platform.
Reduce “dark” spending and add visibility into the procurement process
As an organization grows, what is procurement doing to ensure that its process and tech stack grow with it? While these teams are well-versed in complex management, the truth is it doesn’t have to be so hard.
Even for talented teams, the sheer volume of tools, contracts, and complexity within a growth-stage organization is overwhelming. Kerry Munz, VP of Engineering at HubSpot, was responsible for 40+ vendor relationships, taking hours away from her day-to-day job.
“Life before Vendr was me on the phone with vendors not able to have time with my engineers to actually work on solving problems. We use so many tools and it was just becoming overwhelming.”
A dedicated team may be tasked with identifying and managing hundreds of licenses with varying agreements, renewal dates, and sources of procurement, meaning things become more likely to slip through the cracks (costing time and money). Visibility also suffers, leading to issues like product or tool redundancy, inefficient contract management, unforeseen security or legal issues, or erratic renewal procedures.
License management, after all, is also stakeholder management. Having a streamlined, transparent process for implementing purchases, vetting contracts, and ensuring timely renewals means that every stakeholder knows what’s currently available, has insight into the procurement process, and can work on future projects with efficiency and transparency.
In the absence of this transparency, individual contributors are likely to fend for themselves outside of the approved procurement process resulting in so-called “dark” spending through expensing or corporate cards. These off-the-record purchases at best create unnecessary licenses and a hidden drain on resources. At worst, they can open the organization to security or regulatory risks. And if accounting isn’t looking for them during expense reporting, they can go unnoticed indefinitely.
All of these needs can be met without putting all of the weight on procurement’s shoulders. Rather than reinvent the wheel through complicated spreadsheet or database maintenance (methods that are also prone to redundancy, human error, and data decay), outsourcing the management to a reliable third party is a huge time-saver, paying dividends in the bottom line, staff productivity, and not to mention good old procurement team morale. It also puts the renewal process on auto-pilot so that the procurement team can sink its teeth into more impactful projects.
Get better pricing, data, and scope knowledge
Pricing research and scoping are time-consuming parts of the procurement process. If software options aren’t already in hand, procurement can help stakeholders understand what will work best, present possible vendors or solutions, and make data-based decisions about how to move forward.
With good data organization, the procurement team might even direct the stakeholder to tools already available in-house. This level of organization and transparency can make projects move quicker without wasting money and effort. If not, finance can then vet the requests for procurement and take the reins in bringing the request to fruition.
While pricing and negotiation are often the forté of finance teams, the SaaS purchasing process can still feel a bit like searching in the dark. Often, the results of pricing are subjective, based on factors like time of purchase, license volume, sales cycle, rep, or even your company size and reputation. With so many variables in play, any insight into the buying process can create meaningful cost-savings and lower the friction of the deal.
Relying on the data of a third party can greatly improve pricing outcomes, by giving procurement teams access to historical pricing of other organizations who purchased the same products through the third-party negotiation process.
This access is also a huge 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.
Save hours of time in the procurement process
Procurement teams don’t operate in a vacuum. While they’re ultimately responsible for understanding negotiation, bidding, and approvals processes, the purchase requires the attention of multiple stakeholders: engineering, finance, legal, IT, compliance, and security.
Multiple departments constantly in the weeds can mean tens or hundreds of thousands of dollars of yearly spend in human capital, yielding results that only offer limited cost-savings.
Internal teams also often lack data and negotiating skills, diminishing the benefit of internal procurement practices overall.
As a company grows and scales, the cost-efficiency of this cross-functional process lessens, creating a more compelling business case for streamlining the process via outsourcing. Not only does this reduce spend on software, it also means that stakeholders can turn their attention back to the work that matters.
Nailing the procurement process through partnership
Reducing the low-hanging fruit of the procurement process can greatly increase the efficiency of teams, improve the bottom line, and give finance better visibility into the entire SaaS purchasing and budgeting process. This visibility becomes more important as the need for cloud-based and SaaS tools increases every year.
Relying on a procurement platform can get teams back to the most meaningful and enjoyable parts of their job, allowing the platform to mind the small stuff so they can focus on their big-ticket items.