No longer reserved for organizations at scale, SaaS is more accessible than ever before. Nowadays, the average company deploys approximately 130 different tools to cater to their every business need, spanning sales and marketing to finance and operations. Whether your priority is to accelerate speed to market or streamline project collaboration, a comprehensive SaaS portfolio offers innumerable benefits.
However, with a rapidly proliferated suite of applications comes new challenges — and chief among them is the issue of effective SaaS management.
Without years of experience in software procurement and record keeping, many small and mid-sized businesses find themselves encumbered by countless spreadsheets and restrictive manual processes. While these methods aim to keep on top of important contract details like billing dates, renewal schedules and compliance details, inefficient management may lead to missed opportunities for cost savings.
So, what’s the solution?
Here, we’ll address the inefficiencies of legacy SaaS management and the benefits of using an automated SaaS management system to transform your organizational processes.
The problem with legacy SaaS management
The ‘traditional’ SaaS management of yesteryear demands company procurement managers to manually insert extensive contract details into a spreadsheet or set of files used to track the company’s software subscriptions.
We see that many small to medium-sized businesses still operate this outdated approach to managing their portfolio. The problem is, this approach is entirely unsustainable — our data shows that the number of tools in use at organizations increases by 18% year-on-year, so even if you’re not deploying a broad set of tools at your current stage of growth, you might not be far off.
And as your company scales, the once small number of SaaS subscriptions can quickly spiral to unmanageable levels — and the process becomes all the more convoluted when you factor in the complex set of conditions bound to each contract in your stack.
So, what do you have to look out for when implementing legacy SaaS management?
Below, we’ve listed some of the key barriers to productivity and cost savings.
Auto-renewals are missed
Auto-renewing clauses are commonplace within SaaS — our data shows that they appear in up to 89% of software contracts. While these might seem convenient at first, their purported time-saving benefits for you as a buyer could actually cause problems for your SaaS management.
This is due to the ever-changing nature of business needs. As your company scales its operations, you may outgrow the systems that you use for a variety of functions and look to procure solutions from an alternative provider, or scale back any instances of licensing surplus to requirement.
But when using spreadsheets as a SaaS management tool, it’s all too easy to lose oversight of subscription dates and rates of usage among the workforce. As a result, you may find yourself locked into a contract providing little business value, having voided the opportunity to terminate or renegotiate until your next renewal window.
Price uplifts go unchecked
SaaS vendors are known for frequently adjusting their product pricing — and these changes can catch you off guard if you’re not vigilant in tracking any new price points or charges introduced.
In fact, many providers have price uplift clauses built into their contracts, allowing them to increase your fee year-on-year. These are vital to keep on top of when dealing with multiple subscriptions spread across various branches of the organization.
However, without a centralized system to monitor any adjustments to your contract pricing or terms, you risk losing track of rising costs and overspending on your vital SaaS contracts. In turn, this lack of visibility may reduce your leverage to negotiate on pricing or undermine budgeting when higher recurring costs go unaccounted for.
Manual data entry is prone to error
No matter how keen your eye for detail, manual data entry and spreadsheet management are inherently error-prone. Mistakes when handling data can lead to inaccurate information, missed renewals, and even compliance issues. As your operations grow and you take on more subscriptions, the chance of making a costly error increases, and it becomes challenging to maintain a clear and organized overview of your software portfolio.
All in, manual SaaS management using spreadsheets can quickly escalate costs, and tends to affect businesses most of all during periods of growth — at the stage when finance leaders will need to keep unnecessary costs to a bare minimum.
Otherwise, you risk undermining your profit margins and decreasing your runway. Inefficient SaaS management practices can lead to budget uncertainty and reduced operational efficiency as a consequence of less-informed decision making.
So, how can you avoid this cascade of effects?
In short, with efficient SaaS management processes.
What is automated SaaS management?
Automated SaaS management refers to the use of dedicated software designed to centralize, organize and streamline a company’s SaaS subscriptions. Specialized software management platforms offer features like usage analytics and renewal alerts.
These platforms provide a single source of truth to assist with new software procurement, vendor compliance, and visibility into all pending renewals.
And as SaaS stacks have proliferated, more stakeholders have come on board with the benefits of automated SaaS management platforms. Analysts from Lionfish Tech Advisors predict that by 2028, over half of all organizations that deploy multiple SaaS applications will be using a management platform — up from just 15% in 2022.
Benefits of automated SaaS management
Embracing a new approach to SaaS management can revolutionize your procurement and budgeting processes, and offer access to significant cost-saving opportunities.
Here are some of the benefits that could transform how your business approaches SaaS.
Data organization is improved
Automated SaaS management platforms provide a single source of truth for all subscription data. Typically, this information is vast and wide-reaching — encompassing contract details such as:
- Subscription cost — fee, discounting, additional charges
- Tool utilization — user personas, adoption rate, sentiment
- Contract terms — length, renewal schedule, number of seats, additional clauses
- Billing details — schedule, payment method
- Vendor contact — associated supplier, primary contact
- Governance — application owner, security and compliance details
- Application functions — features offered, overlap with other tools
Thankfully, automated management tools can pull this data with minimal human intervention, reducing the likelihood of data entry mistakes or version control issues. Various studies have reported that up to 70% of spreadsheets contain errors — which can lead to inaccurate documentation with costly knock-on effects, as previously discussed.
For example, poorly organized data could result in a contract that is no longer in use by anybody within the organization being renewed for another year, incurring unnecessary costs with no positive outcome for the business. With an automated system, however, data is easily accessible and constantly updated.
Strategic decision making can take place
Gaining insights into your SaaS usage and spending patterns is crucial for making informed decisions. Automated management platforms offer SaaS discovery methods that can help you identify, track, and optimize the full breadth of SaaS tools in your portfolio. For example, we’ve recently added SSO application discovery to our platform, providing real-time monitoring of all the applications that employees use for work.
Tools like SSO discovery can monitor SaaS usage metrics like device and access times for the apps in your stack, informing you about user behavior. Using these insights, you can identify underutilized subscriptions, optimize license allocation, and ensure that you’re getting the most value out of your SaaS investments — producing actionable insights that wouldn’t be possible using traditional SaaS management.
Costs are minimized
While spreadsheets may seem like a cost-effective solution initially, they can become expensive over time as business expands and SaaS management becomes more complex. During these periods, the time and effort spent on creating and maintaining comprehensive SaaS management spreadsheets can outweigh the benefits. On the contrary, automated SaaS management helps you avoid unnecessary spending and decrease burn rate during critical periods of scaling.
Firstly, with the ability to monitor your software usage patterns, you can identify cost-saving opportunities to cancel and downsize software subscriptions. This typically involves analyzing data and identifying underutilized, redundant or duplicated subscriptions that can be rationalized, leading to immediate cost savings.
Adopting a dedicated SaaS management platform will also help to streamline your new software procurement. By using one tool to centralize procurement processes, companies can consolidate their purchases and negotiate bulk deals. This approach reduces the administrative burden on your team and helps ensure that all software purchases are approved through the established channels, reducing manual work, improving productivity, and mitigating costly fragmented procurement.
How Vertice can support your SaaS management
Manual tracking is no longer sufficient. Vertice’s automated SaaS management platform provides unrivaled visibility into your entire software portfolio — and every contract detail that will help you to make better financial decisions.
From one convenient dashboard, you can receive timely alerts for when your contracts are up for renewal, track utilization rates across each tool and identify invaluable cost-saving opportunities.
But it’s not just a platform we provide. Our experienced purchasing managers can also work with your team to negotiate and purchase new software contracts on your behalf, saving you time and freeing you up to focus on strategic business operations.
Read more about the benefits of using a SaaS purchasing platform, or alternatively see how one company saved $170,000 on a single SaaS contract with Vertice.
