Tech companies move fast. They need optimised processes to get the most out of the resources – and that’s exactly what SaaS spend management is here to ensure.
SaaS spend management is an important task. It’s about optimising resources and boosting operational efficiency and agility. Without it, you’re far more likely to be wasting money on redundant subscriptions, and that can cost your company dearly in the long run.
In this article, we’ll cover what SaaS spend management is, why it’s so important and what you can do to reduce your SaaS spend.
What is SaaS spend management?
SaaS spend management is the practice of monitoring, controlling and optimising an organisation’s SaaS subscriptions and tool usage.
If you’re familiar with spend management, you know it’s about optimising your company’s budget to ensure your money is spent right. SaaS management falls under this umbrella: it’s about making sure you’re not wasting money and resources on the wrong subscriptions.
Key aspects of SaaS spend management include:
- Usage: Keeping track of which SaaS applications are used across the organisation, who’s using them and how frequently they’re used.
- Budgets: Establishing budgets for SaaS expenditure and forecasting future spending based on historical data.
- Cost management: Allocating costs to specific departments and projects to ensure transparency and accountability.
- Optimisation: Keeping up with the number of SaaS licences across the organisation and switching to more cost-effective plans when relevant.
- Analytics: Analysing spending trends to make data driven decisions and pin-point opportunities to save money.
In today’s digital world, companies increasingly rely on cloud-based software solutions for their financial needs. This also means most companies have far more subscriptions to keep track of than they used to. Managing those subscriptions is crucial to ensuring their money is spent right – and that’s what SaaS spend management is all about.
The benefits: Why SaaS spend management is so important
If you’re responsible for managing SaaS, you’ve probably noticed your needs expand with the growth and evolution of the company.
That’s exactly why SaaS spend management is important. Without routinely reviewing your subscription costs, licences, usage and other key aspects, wasteful spending and redundant applications are far more likely to fly under your radar.
SaaS spend management helps you make sure your resources aren’t wasted. Here’s a brief overview of some of the benefits this brings:
- Cost savings: SaaS spend management is like spring cleaning for your software budget. It helps you spot redundant subscriptions, negotiate better deals and cut down your expenses – your wallet will thank you.
- Improved efficiency: Say goodbye to unnecessary admin headaches. SaaS spend management streamlines your SaaS processes, optimises your resource allocation and keeps your operations running like a well-oiled machine.
- Enhanced visibility: With a clear view of where your money is going, you’ll be able to make informed decisions and invest in the right solutions without playing a guessing game.
- Risk mitigation: SaaS spend management allows you to stay compliant and secure. It helps you fend off data breaches and dodge regulatory fines – in short, it helps keep your company safe and sound.
3 best practices for SaaS spend management
There are several ways to get the most out of your SaaS budget. Let’s take a look at three best practices for managing your SaaS spend:
1. Implement centralised procurement
No more rogue purchases or surprise bills. The first best practice on our list is centralised procurement – and with it, you’re the master of the purchasing process.
Centralised procurement is about consolidating the purchasing process for all SaaS applications through a single department or team.
What you’re left with is a smooth, streamlined process that gives you more control over purchases, standardisation and strategic management of your software acquisitions. This also makes it easier for you to negotiate the best deals and discounts – what’s not to like?
2. Conduct regular audits
Next up is conducting regular audits, which means systematically reviewing all the SaaS applications and services you’re currently using within your organisation.
Regular audits keep your software lineup sparkling, ensuring your inventory is accurate, up to date and aligned with your company needs. It lets you dust off your underutilised apps and ensure that you’re only paying for the tools you actually use.
In short, you won’t have to worry about forgotten subscriptions lurking in the dark anymore – you’ll catch them long before they waste too many of your resources.
3. Perform routine reviews
How effective are your SaaS applications – and what value do they bring to your company? The final best practice on our list is routine SaaS reviews.
Routinely reviewing your SaaS applications helps you ensure that the solutions you’re investing in align with your business goals. It allows you to keep on top of the changing needs of your organisation and adapt accordingly, ensuring that every application you’re using is a star performer.
Tips: How to reduce your SaaS spend
If you’re looking to cut down your SaaS spend, there are three ways you can go about it:
- Buy less: This one’s a given – you should only be paying for licences you’re actually using. Keep an eye on your licences and cut out the ones you don’t need.
- Buy cheaper: Getting a better deal is always a good way to reduce SaaS spend. You can buy cheaper by negotiating a better price, switching from a monthly to an annual subscription or by buying from a reseller instead of directly from the vendor. There are plenty of options to explore.
- Buy better: It’s all about quality. Optimise your service level and plan by finding the right configuration of SaaS platforms for your company. Choose solutions that match your needs and business goals, and make sure you’re not wasting money on features you don’t need.
Wrapping up
SaaS spend management is an important task. It’s about optimising resources, boosting operational efficiency and agility and making sure you’re not paying for the wrong subscriptions.
In short, SaaS spend management helps you ensure your resources are well spent – an important aspect of securing your company’s future.
