Unlocking millions in SaaS savings for finance and IT leaders: Practical tips from a purchasing manager
Adejoke Adekunle | MAY 15, 2023
Purchasing managers play a crucial role in supporting finance and IT leaders to buy new licenses and manage contract renewals for software driving day-to-day operations and team productivity. They are also a repository of knowledge about SaaS vendors, and constantly discover ways to align their motivations with the needs of the customers they support.
I had the opportunity to speak with Alexander Bradley, an experienced purchasing manager at Vertice who has helped clients save millions of dollars in SaaS purchases and renewals. He shared his insights on effective techniques he’s used throughout his journey and offered valuable tips for finance and IT leaders looking to make more strategic decisions on their organization’s SaaS investments.
On first-time SaaS purchases
One of the first magical experiences new customers at Vertice enjoy is the guaranteed savings we deliver on their first license purchases with SaaS vendors, and this exercise typically rests with a dedicated purchasing manager for each customer.
From Alexander’s experience, it matters that our customers quickly benefit from the significant leverage Vertice offers — combining state-of-the-art pricing intelligence with dedicated Vertice experts who negotiate the best deals and buy software on customers’ behalf.
“It’s very different here at Vertice where we don’t count savings until we achieve them for our customers. What that means for purchasing managers at Vertice is we don’t just stare at recommendations on the customer’s dashboard, we put it on our to-do list to lock in those savings.”
According to Alexander, businesses often think whatever initial discounts vendors offer are the best they can get. They also believe they have to commit to long-term contracts or a minimum number of licenses to enjoy any real savings. That notion quickly changes when they come into the Vertice platform, powered by a database of thousands of SaaS transactions SaaS across 16,000+ vendors.
“It becomes really easy to see pricing benchmarks and savings opportunities you likely won’t get directly from vendors.”
Beyond knowing what to save, purchasing managers spare business leaders the sometimes tedious conversations with vendors through the procurement process. Directly in the Vertice platform, CFOs or procurement leads can simply delegate new purchases to Vertice.
On SaaS renewals
Alexander acknowledges that renewals are a daunting task for business leaders because the onus is on them to figure out the ROI per vendor without dampening team productivity.
“It’s not just about turning a vendor on/off. A business case was made for it and so you have to come to an objective decision that positively impacts the overall business. To do this right, you’d have to comb through contracts for clauses, meet with org leaders to assess tool adoption, and many in-betweens.”
Critical steps, yes, but they also make it hard to get on top of renewal negotiations early and, according to Alexander, timing substantially influences the savings potential of renewals. He believes a proactive approach ensures better outcomes for both parties involved in contract negotiations.
How Vertice helps
Vertice provides a smart way for finance and procurement leaders to stay on top of upcoming renewals with automatic notifications 90 days prior, allowing them to request assistance from a purchasing manager like Alexander.
“It’s much simpler for our customers now with the Usage Analytics feature, and for me, I get ample time to understand what direction the business needs to go as well as how to support them. I like to know what we’re doing with a contract. Are we extending it? Are we adding in new features? Are we downgrading? Are we canceling?”
To the business leader, answering these questions is easy with Vertice’s Usage Analytics feature. You can see how previously purchased licenses are being used, identify what tools you are over-licensed for, and make quick decisions about your relationship with any vendor.
It’s like collapsing five spreadsheets and 20 meetings into one sticky note with the word YES (or NO).
The logical next step is to assign the renegotiation to your purchasing manager via the Vertice platform.
On dealing with vendors
For Alexander, it’s a really big deal that Vertice is vendor agnostic and 100% aligned on the customer’s interests.
In conversations with vendors, one of Alexander’s go-to angles to capture savings for customers is to highlight the customer’s relationship with the vendor relative to time.
“If they’ve been together for four years, and it’s the same level of discount, that’s one of the things I like to push back on and improve because there should be rewards for loyalty.”
Another angle Alexander explores is the current economic downturn, especially for SMB customers looking to make big tech investments. The downturn also makes it harder for vendors to lock in deals, as businesses are cutting budgets and overall making fewer investments.
Positioning the customer as a potential net positive in the vendor’s books makes them receptive to offering preferred terms.
“Always understand what’s important to them. So they want to close a deal within a certain month, is it better for them to try and speak about some products over others? Or do they need to close their books for the year and would like to lock in some additional wins for the year? These are all avenues for savings.”
Lastly, leveraging competition is very important. Alexander explained that, when it comes down to it, businesses want to grow efficiently and pricing benchmarks are a good way to objectively come to a decision about financial commitments to any vendor.
“Vertice is extremely data-led and we give you pricing intelligence for every purchase you are about to make. Why not use it to your advantage?”
On switching vendors
Efficiently run organizations are prudent and strategic with their investments. Sometimes, this comes down to the vendors they are in contracts with and, in some cases, switching vendors presents a free cash-flow opportunity.
But with SaaS, businesses typically don’t have a good grasp on what would be a good replacement for some tools they are open to shifting providers for. Alexander believes the vendor marketplace on the Vertice platform is a great way for business leaders to make comparisons. Here, you can sort vendors by departments and functionality and, with the help of a purchasing manager, get benchmarking insights on pricing and features as well as recommendations on what tools to go for.
On navigating difficult procurement processes
No two SaaS purchases are the same and sometimes, purchasing managers hit a roadblock in trying to secure great deals for customers.
From Alexander’s experience, a common issue he’s seen is when purchasing managers are introduced late into contract negotiations. At this point, there’s a general sentiment that there’s an already agreed deal on the table, even when the customer is not exactly happy with what they are getting.
Other times, the initial discussions happen with non-finance leaders, leaving vendors convinced the deal is set. But finance leaders look at negotiations through a completely different lens and often strenuously try to renegotiate for better deals.
Where there’s Vertice, there’s a way
Alexander suggests that both IT and finance leaders should bring their purchasing managers into the conversation early on.
“We are there to handle these conversations for our customers, and we do it by bringing everyone that matters across IT, finance and procurement, as well as the vendor in that process. Given ample time, it’s easier to align everyone’s needs.”
When asked what he enjoys about his role, Alexander said that acting as a customer champion and having the free reign to stay unbiased towards any vendor have consistently helped him deliver savings for clients.
He’s also enjoyed seeing many clients be pleasantly surprised about their experience at Vertice, from saving on expensive contracts and gaining more productivity time. Vertice data shows that it takes an average of 33 emails between a vendor and buyer to close a contract, but Vertice purchasing managers handle the conversations between clients and vendors, saving finance and procurement leaders from the extensive back and forth.
“We’ve had really good case studies from customers saying, ‘You know, savings are good, but the fact you’ve saved us loads of time and made our lives easier is a really big deal.’ So that’s quite good.”