8 factors to consider for your software management plan

Managing software purchasing involves much more than clicking “renew” every 12 months.

You’ve got to keep vendor risk, license utilization, and IT compliance protocols in mind. Each of these factors must be carefully considered for every new SaaS purchase.

Without a solid software management plan, you are opening your business up to various forms of risk (like SaaS security risk) and setting yourself up to pay more than you should through poorly negotiated contracts and unused licenses.

Discover the eight most important factors when designing a software management plan, and never miss an element again with our guide, “Perfect your SaaS purchasing process.”

What is a software management plan?

A software management plan is a blueprint for monitoring and controlling the purchase of SaaS products.

Software management plans differ from typical procurement plans. Software buying is an ongoing process since most software products are sold on a subscription basis.

As such, a software management plan includes outlining approval processes and risk identification but also extends to cover aspects of the ongoing nature of the purchase, such as:

• Who is responsible for managing license utilization
• How supplier review meetings will take place
• Who is responsible for the management of the relationship
• Processes to be followed when contracts are up for renewal

With a software management plan for each new SaaS purchase, procurement teams mitigate risk, reduce costs, and establish clear expectations for the vendor and internal relationship managers.

What to include in a software management plan

While the details within each software management plan might differ — for instance, some SaaS purchases will involve more risk than others — each plan should follow the same outline.

1. Software platform

The first section of your software management plan should describe clearly which software platform you’re looking at purchasing.

This section should include the product name, the plan you’re looking at buying, and the category of software.

Let’s say you’re developing a software management plan for a new CRM tool and have already decided on your vendor.

This particular vendor has four different plans for its core product, as well as a number of add-on tools.

In this case, the first section of your software management plan should look like this:

2. Intended use

This section of your software management plan outlines how the product in question will be used.

Defining this helps to establish scope (so you right-size contracts and monitor usage against expectations) and to understand how the new software tool fits within your existing SaaS stack.

Here, you should also outline which departments will use the tool so the expenditure can be categorized correctly.

Here’s an example of what this section should look like when complete:

3. Purchasing procedure

Next, establish which procurement policies are necessary for this software purchase and how they’re being followed.

The typical SaaS buying process covers four elements:

1. Approval (from finance, security, legal, and the head of the department(s) the tool is for)
2. Identification of timelines
3. Review of competing products and analysis of pros and cons
4. Identification of spend thresholds

Dive deeper into these four steps in our in-depth guide: The SaaS buying process: Four steps to get started.

For our CRM purchase, this section of our software management plan might look like this:

4. License manager

The fourth and fifth sections of the software management plan define who is responsible for managing license utilization and relationships with your vendor stakeholders.

The license manager is responsible for:

• Monitoring utilization
• Removing licenses when they are underused or when an employee leaves
• Adding licenses as required
• Supporting feature adoption to get the most out of each license

License management may be the responsibility of a procurement leader or the department head.

5. Vendor relationship manager

The vendor relationship manager is responsible for holding suppliers accountable to their contracted agreements and any performance KPIs involved.

They’ll also be in charge of identifying potential risks to the relationship, such as the possibility of the vendor shutting down an important feature.

The vendor relationship manager is generally a procurement team member and may be the same person as your license manager, depending on your internal protocols.

6. Supplier review meetings

In every software management plan, it's important to outline how often you’ll meet with suppliers to review performance. Include a brief description of the agenda for each meeting.

The person mentioned in the previous section (vendor relationship manager) is responsible for scheduling and running these meetings and reporting to any internal stakeholders post-discussion.

Here’s what this section might look like:

7. Risk identification and mitigation

Whenever you enter a relationship with an external party, there is some form of risk present.

This section of the software management plan outlines what risks you’ve identified and how you plan to mitigate them.

Typical forms of vendor risk to consider include:

• Operational risk (the possibility of a supply chain issue, for instance)
• Financial risk (the possibility of the vendor’s business going under)
• Reputational risk (the possibility of a vendor’s negative PR impacting your company)
• Security risk (the possibility of a data breach)

Learn more about these common forms of vendor risk and how to handle them here: Vendor risk management: What to watch for and best practices.

For this section, briefly outline the risks you’ve identified and processes you’ve put in place to mitigate them, like this:

8. Contract management and renewals

The final section should outline who is responsible for managing the vendor contract and any processes you have in place for renewals.

For instance, before renewing the contract, you might conduct a new needs analysis and secure approval from all of the same stakeholders.

Software management plan checklist

Use this software management plan checklist for each new SaaS purchase to ensure no critical elements slip through the cracks.

Vendr: The no-brainer software management platform

Effective management of SaaS buying starts with a clear and detailed software management plan.

And the ongoing management of licenses, vendor relationships, and contract renewals require a SaaS-specific procurement platform like Vendr.

With Vendr, procurement leaders never miss a renewal negotiation opportunity, can quickly spot areas of license overlap, and can negotiate the best possible contract terms by leveraging our extensive database of SaaS buying data.

Find out how much you could save on SaaS today with our free cost-savings analysis.