Octobits Blog – SaaS procurement offers cloud-based apps to make your procurement processes easier.
SaaS procurement is all about making sure your company gets the most out of SaaS applications.
Instead of buying and keeping on-premises solutions, companies can now subscribe to cloud-based software, paying for what they use rather than owning it outright.
In today’s digital world, having effective SaaS procurement is no longer a luxury—it’s a necessity. That’s why we’re going to talk about and find the right procurement SaaS.
The Importance of SaaS Procurement
SaaS procurement helps businesses manage their software spending more effectively.
There are some great benefits to adopting cloud technology, like flexible infrastructure capacity, rapid capacity deployment, and faster time to market for digital products.
This speed and agility are even more important in today’s business environment.
Also, think about how effective SaaS procurement can help you cut down on unnecessary spending.
According to a Statistica report, the software as a service (SaaS) market is expected to be worth about 197 billion U.S. dollars in 2023 and to reach 247 billion U.S. dollars by 2024.
This growth shows how much more people are relying on SaaS solutions, so it’s more important than ever to make sure you’re getting the best deal and using the software you’ve bought effectively.
Efficient SaaS procurement not only saves money but also makes sure that the software you choose is right for your business, which helps you work more efficiently and productively.
Key Components of SaaS Procurement
Vendor Selection
Finding the right vendor is key to a successful SaaS procurement process. The process is all about looking at the different vendors and seeing what they can offer you in terms of service, reliability, and cost.
Another big thing to think about is whether the vendor’s services match up with what the company needs.
Businesses are investing in more tools to help them work more productively and securely, including CRM, cybersecurity, and project management tools.
By evaluating vendors on these criteria, you can be sure that the solution you choose will meet your business’s specific needs.
Think about things like how well the software works, how secure it is, how easy it is to expand, how good the customer support is, and how the pricing works.
Also, it’s a good idea to request demos and trials to see if the software is right for your needs.
For a good read on how to reduce SaaS waste, you can read “How to Reduce SaaS Waste: $18 Million Problem You Need to Kick Out.”
Contract Negotiation
If you know how to negotiate contracts effectively, you can get better terms and save money.
Vendr’s SaaS Trends Report says 2023 was another good year for the SaaS industry, with the average contract value (ACV) for net new purchases up 32% year-on-year.
When it comes to negotiating, it’s important to focus on things like pricing models, service level agreements (SLAs), and renewal terms.
It’s also a good idea to choose a vendor that offers transparent pricing, like a per-user pricing strategy, which can give you more flexibility and cost control.
License Management
Good license management is the key to avoiding the problems that come with either over-licensing or under-licensing.
According to Better Cloud’s “2023 State of SaaSOps,” 59% of all SaaS apps are unsanctioned, and users are adopting them without IT’s knowledge or approval.
This is what we call shadow IT. It can make it tough to manage all those SaaS apps. This also shows how important it is to have good license management so that you can stay on the right side of the rules and keep your data safe.
Good license management means keeping track of how software is being used, making sure everyone is following the licensing agreements, and making sure that licenses are being used as efficiently as possible.
This helps you keep control of your software costs and make sure you’re using all your apps as efficiently as possible.
Best Practices for SaaS Procurement
If you implement the best practices in SaaS procurement, you’ll see an improvement in efficiency and cost savings.
The University of Victoria’s “Procurement of Software as a Service (SaaS) Solutions” guide covers some key practices that are essential for effective SaaS procurement.
You’ve got to do a proper needs assessment. It’s the only way to make sure that the SaaS solutions you choose will help you achieve your business objectives and comply with all the relevant rules and regulations, like data privacy and security standards.
For instance, at UVic, data residency and compliance with the BC Freedom of Information and Protection of Privacy Act (FIPPA) are the most important things to think about.
It’s good to have regular reviews of how vendors are doing, so you can keep the service up to scratch and see where there’s room for improvement.
When evaluating vendors, you need to look at things like security certifications (SOC 1 & 2, ISO 27001/27018) and their ability to meet accessibility standards (WCAG 2.1). This helps ensure that the SaaS solutions remain secure and usable for all users.
Following UVic’s advice and implementing a centralized procurement process helps us keep an eye on things and avoid making unnecessary purchases.
This centralized approach includes all the steps from opportunity assessment to contract execution, so there’s no room for mistakes. It also ensures thorough evaluation and strategic decision-making.
SaaS management tools can help you track software usage, manage licenses, and make sure you’re staying on the right side of the rules.
These tools help you get the most out of your license allocation, avoid wasting money, and keep control of your software costs.
UVic’s approach includes specific procurement phases, such as privacy/security assessments and contract negotiations, to make sure that all aspects of SaaS procurement are handled meticulously.
If you’re looking for a good read on SaaS waste, please refer to “The Types of SaaS Waste: The Cost of Doing Business (and How to Fix It).”
Common Challenges in SaaS Procurement
One of the big issues with SaaS is that businesses can get locked into a single vendor. This can make it tough to switch providers without a lot of hassle.
The UVic technical guideline makes a good point about the importance of carefully negotiating contract terms to avoid such dependencies and ensure flexibility.
Hidden costs can also come up with data migrations, integrations, and extra feature requirements.
These unexpected costs can really put a strain on budgets and make the procurement process more complicated.
UVic’s procurement process addresses these concerns by requiring detailed documentation and vendor compliance with specific security and privacy standards.
Security and compliance are also big issues. Make sure that SaaS solutions are up to date with industry regulations and standards to keep your data safe and avoid penalties.
The UVic makes it clear that it’s important to check that vendors are up to date with their security certifications and that they’re following the rules on privacy.
Following these guidelines helps organizations avoid data breaches and keep their SaaS solutions secure.
At Octobits, we’ve got a complete solution for all your SaaS procurement challenges.
We can help you make the most of your SaaS investments by providing tools for vendor selection, contract negotiation, and license management.
Our platform makes it easy for you to track software usage, manage licenses efficiently, and ensure compliance, which helps you avoid license waste.
Octobits also gives you the lowdown on how vendors are doing and what the market’s up to, so you can make smart choices.
If you’d like to know more about how Octobits can help with your SaaS procurement needs, kindly visit Octobits. And yes, we are free-to-use until the end of December 2024.
Conclusion
SaaS procurement helps companies save money, work more efficiently, and stay safe. This is pretty obvious, isn’t it?
But you’ve got to be strategic about it. Things like choosing the right software vendors, negotiating contracts, and keeping track of software licenses.
In the long run, using tools like Octobits for procurement SaaS can make the whole process a lot smoother.
