Finally, you’ve landed your dream job. You’re now a Procurement Buyer in a fast-growing startup. You know there’s only a basic procurement process in place to acquire software. It needs refinement alright, but that’s not the hardest challenge in front of you.
There’s a lot of organizational spend wasted away on unrestrained SaaS buying. As you look into it, you learn that, on average, businesses waste 35% of their cloud spend. You get a dreaded feeling that your company’s wastage may be above the industry average since anyone with a business credit card can subscribe to any software they want. You can see that maverick spend has free reign here. You share these findings with your team, and in turn, they task you with rectifying the situation.
You are happy to have the opportunity to rein in rampant SaaS spend, but you have no idea where to start. Your fellow procurement enthusiasts suggested that you start by assembling a tech stack. Searching online for pointers to assemble a tech stack, you find articles about backend and frontend technology stacks. None of these have anything to do with your predicament.
Worry not, this is not another article about programming languages or open-source-related tech stacks. Being fellow procurement enthusiasts, we’ve drafted a know-it-all's guide to assembling your own SaaS tech stack. This blog will explain what a tech stack is, the types of tools that might be included in a tech stack, and pointers on how to assemble a solid tech stack for your business.
A tech stack is all the software that your organization owns, rents, and subscribes to. It will include every piece of software from the human resource management system (HRMS) that is used every day to the web conferencing tool that is used rarely. Here are some examples of the types of tech your company might need across departments.
Most tech stacks are unorganized and scattered, paving the way for maverick spend. On the other hand, a well-defined and organized tech stack helps fight dark purchasing. Dark purchasing refers to circumstances where your team makes impulsive purchasing decisions outside the standard purchasing process. While making such hasty purchases, team members often overlook aspects like ROI, feature overlaps, and more.
An organized tech stack helps provide spend transparency and visibility over existing tools, preventing any chance of duplicate and redundant purchases.
The process of assembling a tech stack will give you visibility into the software solutions that your teams use every day — making you a tech stack MVP. Having a clear idea of the software spend and usage patterns will help you make informed decisions while weeding out unnecessary and underused software from your tech stack. Here are the five steps involved in organizing and assembling the right tech stack.
Collect the names and payment details (e.g., subscription fees, renewal dates, and more) for all the web apps and mobile apps that your departments use on a regular basis — daily, weekly, or monthly. You can do this by sending out an email survey to department heads or the person who manages the spend for a specific department.
Ask your stakeholders to list the tools they use, the amount they spend on each one, and the plan they are subscribed to. You can also request that they cross-check their entries with their business credit card statements to get an accurate idea of the SaaS spend in their department.
Once you receive the list of tools, you can start creating your software organization chart. A software organization chart is a list of all the software your internal teams use to accomplish their job.
When you create a software org chart, take your time to list them down in the order of the highest spend to the lowest. Doing this will give you a clear breakdown of your top spending trends and see if you can cut back on some of those. For instance, you may be paying for a platinum tier plan just for a single feature that is actually offered for free by another vendor. In fact, an organization's top 15 SaaS suppliers usually take up around 85% of the software spend. So, trimming your high-cost tech may streamline and stabilize your spend pattern in the long run.
Now that you have a clear view of where your SaaS spend goes, you can take a critical look at the list to find redundancies and overlaps. Your marketing team may have a paid subscription for a web conferencing tool that they use for webinars, and your customer success team might have accidentally subscribed to another web conferencing tool to host a conference. Look closely for these overlaps and highlight them.
In addition to identifying redundancies, look for underused applications with untapped scalability potential. Find instances where only a handful of features are used. See if you can take the subscription plan down a notch or find a new solution with that specific functionality altogether.
As you are taking inventory of your SaaS spend within your organization, take the time to check how often people use the web or mobile applications that they subscribe to. Do any apps lay forgotten, collecting dust?
For instance, a team member may have purchased the app to resolve a one-time event, like creating style sheets. Now, it may lay forgotten deep within your set of tools merely collecting subscription fees at regular intervals. The only way you can find the existence of such unused apps is by performing a thorough analysis of the business credit card statements of your department heads and stakeholders with purchasing power.
The democratization of purchasing power has made it easy for anyone with a business credit card to make swift SaaS purchasing decisions. Such hastily made, e-commerce-like decisions won't take ROI or scalability into consideration. The existence of an organized tech stack and a thoroughly vetted SaaS purchasing process can solve this dilemma once and for all.
When you are just starting to assemble a tech stack, it may be best to assemble specific tech stacks for every department. While there may be some overlap, departmental tech stacks let you spot which departments spend more and where they spend it.
As you organize your software and web applications into homogenous tech stacks, you will notice overlaps and redundancies. Once you spot such instances, talk it out with your department heads and stakeholders. See which software can be used commonly by all departments and which can be weeded out once and for all.
Keep digging in deeper by asking questions like:
Asking such questions will help you identify tools that you can do without or tools that it might be time to replace if your current solution proves to have a poor user interface or user experience. Trimming down such tools will help you create a freshly culled tech stack that drives savings directly to the bottom line of your organization.
Assembling a tech stack is well and good. But if you don't take steps to ensure that it stays whole and healthy, it could collapse and become a pile of Lego blocks in a matter of months. To prevent such an instance, you also need to streamline the SaaS buying process. Implementing a standard buying process and assigning gatekeepers for purchases will eliminate any chance of maverick spend entering the equation.
Lack of IT and procurement oversight paves the way for dark purchasing and unnecessary SaaS spend. Making a catalog of your SaaS software spend, evaluating the list of software individually, and weeding out the unnecessary subscriptions is the right way to organize a tech stack. Take the time to review your purchasing process and add gatekeepers who calculate and justify ROI before approving a purchase.
If your team is already overloaded and you need help assembling and managing your tech stack, we’re happy to help. Sign up for Vendr today and turn your software pile into the ultimate tech stack.
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