SaaS may well play an integral role in the growth of any organization, but for many, the procurement of these tools is both time-consuming and costly.
Not only are there now a vast array of tools to choose from, but with so many factors needing to be taken into account – functionality, integrations, security and compliance to name a few – the process is often a complex one, involving numerous stakeholders from across the business.
These aren’t the only influencing factors though, with price also remaining a key consideration. The problem is, with the cost of software increasing at a rate that far outpaces general market inflation, it only amplifies the pressure that businesses are already under to make the best possible decisions on their chosen software.
Which begs the question – how can you make sure you’re choosing the right tools?
Here are our best practices.
SaaS purchasing best practices
Conduct a needs analysis
To evaluate SaaS solutions effectively, it’s crucial that you’re conducting a thorough needs analysis. This involves identifying:
- Your business objectives: Any piece of software should support company – or departmental – goals, or help tackle challenges.
- Required features: This will ensure the solution actually meets your needs. You should also rationalize your existing software stack to ensure there is no feature overlap, or that the tool is already being subscribed to by a different department – something that often happens with project collaboration software.
- User requirements: Do you have a solid understanding of the needs of the different user groups? And what plan level do they actually require?
- Integration needs: Can the solution integrate with your existing technology stack?
A comprehensive needs analysis will not only help you shortlist the best-fit SaaS solutions, but it can also help you make a more informed purchasing decision, for example by ensuring that you’re only paying for tools and licenses that are actually needed.
Evaluate the vendor
SaaS is not only expensive – at least for the most part – but with many companies committing to annual or multi-year deals to drive down the cost, it’s all the more important that you’ve done your research.
While this will often involve reading reviews from existing customers on a platform such as FinancesOnline, it can also be worthwhile determining the company’s financial stability. This can be done by assessing its financial reports, as well as analyzing its growth and revenue trends.
In addition to this, it’a also worth reviewing the SLA, as this will provide you with a solid understanding of the vendor’s service delivery standards.
Analyze total cost of ownership
With the average organization now using 130 software applications, there’s no hiding from the fact that SaaS costs add up. The thing is, the cost of each platform often extends beyond the price of just the subscription.
This is why it’s so important to analyze the total cost of ownership (TCO). In other words, all the costs associated with deploying, implementing, and operating the software.
The first step in understanding the TCO of a SaaS solution is to therefore identify all costs involved. This will often include implementation costs such as data migration, integration, customization, and configuration, as well as operational costs such as maintenance, upgrades, and support.
Once you have a better idea of how much the software will realistically cost you over the course of it’s lifetime, you can make a more accurate decision based on your budget.
Ensure data security and compliance
Before committing to any software solution, you should also assess its security features and capabilities, as well as the vendor’s security policies and procedures. This includes evaluating the software’s ability to protect sensitive data, prevent unauthorized access, and respond to security threats through features such as encryption, authentication, access controls, and monitoring.
Compliance with industry-specific regulations and standards is also important for avoiding potential legal and financial consequences. Disaster recovery and business continuity plans are also essential for ensuring data security and continuity of operations, which involves evaluating the vendor’s ability to recover data and systems during an outage or disaster, and provide uninterrupted service, aligning with business needs and objectives.
Evaluate the vendor’s technical capabilities
To help determine whether the vendor is capable of meeting your needs and providing long-term support, you should review:
- The vendor’s technical expertise
- Software development lifecycle (SDLC) processes
- The product roadmap and plans
It’s also worth assessing the software’s scalability and integration capabilities. For instance, if you’re looking to purchase the best business software for your business, you must ensure that the SaaS solution can handle increasing users, transactions, and data. You’ll also want to ensure the software can accommodate your business’s growth and expansion requirements without compromising performance or service quality.
Negotiate contract terms
Contract negotiation is another important step when purchasing software, as it can help you secure a more favorable deal.
While there are a number of things that can be negotiated on, including auto-renewal clauses, price uplifts, term length, and support and maintenance requirements, one area of focus should certainly be on price. With as many as 90% of companies overpaying for their SaaS tools by an average of 26%, list prices are rarely set in stone and there is almost always the possibility to drive down the cost.
The challenge, however, is knowing just how low the vendor is willing to go. Which is why it’s so important that you’re obtaining accurate pricing intel.
By understanding exactly how much other similar companies are paying for any given tool, you stand to leverage the best possible deal, without compromizing vendor relationships.
SaaS purchasing is only the first step
Taking the steps to ensure you’re making the best business decisions when it comes to SaaS purchasing is important, but it doesn’t end there. You also need to maintain total visibility of every single application that exists within your software portfolio, in order to minimize wasted spend, identify cost-saving opportunities, and avoid unwanted auto-renewals.
Which is where Vertice comes in.
Not only do we provide you with complete SaaS oversight through our platform, but we also purchase, manage and renew software on your behalf, saving you a substantial amount of time and money.
See for yourself how you could be saving on your annual software spend, or alternatively browse through our vendor database for exclusive pricing and discounting insights for thousands of SaaS providers.
