As a business owner, you’re always looking for ways to streamline your operations and make things run more smoothly. When it comes to the SaaS buying process, there are a few best practices that can help you save time and money in the long run.
By following these tips, you can be sure that you’re getting the most out of your SaaS buying process:
- Define Your Needs Upfront
- Get Multiple Quotes
- Consider Total Cost of Ownership
- Pay Close Attention to Contracts
- Negotiate with Vendors
- Manage Ongoing Relationships Carefully
The SaaS Buying Process
The SaaS buying process usually involves a company research phase, during which the potential buyer evaluates various SaaS providers based on factors such as price, feature set, and reviews.
Once a shortlist of SaaS providers has been compiled, the buyer will typically request demos or free trials from each provider to get a better sense of the product.
After evaluating the various options, the buyer will make a decision and purchase the SaaS product.
How SaaS Has Changed the Buying Process
In on-premise solutions, there was typically one centralized team in charge of purchasing the software. With Software as a Service, every individual user is the buyer.
Signing up for a software as a service (SaaS) application is as easy as swiping your credit card.
With the ease of buying software, people within organizations often sign up for lots of applications without the knowledge of the IT team, which can result in the “shadow IT” of unapproved tools.
When IT is in charge of procuring software, it checks the market for the best products, makes sure it’s safe to use, follows all compliance requirements, and purchases the right amount of license.
While buying software as a service (SaaS) is less expensive than on-premise, you should be careful of a few drawbacks.
Procurement has become its own entity, which has led to it becoming an influential department.
The IT budgeting process is continually evaluated for areas of potential savings and consolidation of services. The IT purchasing process is handled by its own team.
When buying software as a service, there are many factors to consider.
You need to make sure that the new technology is compatible with existing systems and meets the needs of every department seamlessly.
If the IT and procurement teams work together, they can better collaborate and better understand each other’s requirements.
The procurement team can now save money and create more value for the enterprise. By focusing on creating value for their organization, the procurement department can remain a strategic partner to IT.
Your procurement team should look into getting rid of any unnecessary software, such as any licenses that are never used. You should also make sure that any software that is being used is integrated well with other systems.
As cloud software is taking over the industry, it’s clear that the purchasing process is going to be done in the Software as a Service (SaaS) model.
The process for procuring software as a service (SaaS) involves finding the right vendor, checking to see if they meet the necessary security and compliance regulations, and implementing the services.
The SaaS Procurement Process
We break down the lengthy and tedious process of buying new software into seven steps.
- Identify the hardware or software requirements. Typically, it begins with an employee, unit, or division within an organization submitting a request to IT or procurement.
- Verify the need. The procurement department verifies and accepts or rejects the request for new software.
- Get budget approval. If the request is accepted, the next step is to get the budget approval from the finance department.
- Make a list of vendors. While waiting for budget approval, vendors are shortlisted and asked for a quote.
- Send the contract to legal. The legal team reviews the terms and conditions of the contract and raises concerns if there are legal issues. If there are no red flags, a software provider is selected.
- Negotiate. The negotiations between the vendor and the purchasing department take place, and then the contract is signed. The vendor delivers the product.
- Review documents. The purchase order, packaging slips, and vendor invoices are compared in a 3-way match to check for discrepancies.
- Make payment. If there are no issues, the invoice is sent to the finance department to make payments and record the transaction.
As you can see, this is an incredibly time-consuming and complicated process. It’s extremely involved and requires a constant and collaborative effort between business, legal, and finance teams.
You might need to make your employees fill out a form, and then send it to the appropriate department.
Every step in this process is crucial. One small error could throw everything off. For instance, if someone misses an important email or a purchasing order is delayed, it could slow down the process.
It’s therefore wise to hire specialists that can make the entire purchasing and implementation process much faster. They can also help you automate your procurement. The IT team no longer needs to worry about choosing the right software as they recommend the best ones, which are cost-effective, secure, and scalable.
Additionally, it can help you weed out all those questionable apps in your software as a service (SaaS) suite. That way, you can make sure that your app purchases are secure, good, and hassle-free.
SaaS Procurement Best Practices
Establish goals that are focused on innovation and security. If you are only using a spreadsheet, it will only hinder your growth potential.
As the complexity of purchasing increases, more and more companies are using software to manage it.
For companies using a lot of software as a service (SaaS), a management software platform tracks all your spending and usage to help you keep costs down.
According to research by analyst firm Gartner, 55% of companies will have fully transitioned to all cloud, software-as-a-service (SaaS) solutions by 2025. This shift, however, can be a difficult one to manage, as it requires balancing the need for increased innovation and agility without sacrificing security and control.
Most enterprises today would usually never adopt services that could increase productivity for their employees. However, because of the high number of cloud applications being used, and the uncontrolled use of Shadow IT, many employees bypass their companies’ security measures.
As a result of companies losing control of their technology, they have turned to Software as a Service (SaaS).
Before you can implement any security measures, you must first create a security policy.
The security measures should not interfere with the business’s ability to purchase solutions that add value to the enterprise.
Develop a standardized process for dealing with software as a service (SaaS). To maintain security, every company should create and maintain a standard operating procedure (SOP), whether it’s a checklist or a contract.
When sourcing SaaS applications, it is important to vet them thoroughly. Every business unit should be trained on how to properly use VoIP technology, the steps they need to take, and questions they should ask to determine whether or not the software is secure enough to meet their needs.
By taking the time to properly vet SaaS applications, businesses can ensure that they are making the best possible decision for their needs.
Shadow IT is a huge problem for many companies. Discover which apps are in your environment and which ones you need.
If businesses, teams, and individuals were given the ability to choose their own software, they would be able to select which solutions work best for them.
When it comes to procuring SaaS, it is important to avoid shadow IT expenses. This can be done by ensuring that accounts payable contain only a limited number of data points. This will make it much easier for IT executives to comb through the data and give a full view of their cloud investments.
When you have visibility into the Software as a Service (SaaS) apps used by your employees, you can identify which apps are not being used, which employees are over-paying, and which app is delivering the most value.
A healthy relationship between the IT department and the different business divisions, individual employees and managers, and vendors ensure that IT processes, policies, and procedures are followed, that IT is strategically involved in renewals, that IT implementations go smoothly, and that IT investments are successful.
While saving money is important, other benefits beyond this can drive value.
By being proactive, IT and procurement can work together to avoid potential issues before they occur. Regular meetings and communications between stakeholders can help identify and resolve problems before they escalate.
In many companies, the hierarchy of spending is based on cost, the number of users, and visibility. IT and procurement will prioritize these purchases, regardless of their level of risk.
Unfortunately, cheap security software can be risky, and vetting can take time.
To ensure that all of our data is protected, we must ensure that all of our vendors and partners comply with our security and privacy standards.
One reason that companies don’t set up a centralized call center is because of resources.
Conclusion
By following these best practices, you can streamline your SaaS buying process and get the most out of your SaaS purchasing decisions. By taking the time to define your needs upfront, getting multiple quotes, and considering the total cost of ownership, you can be sure that you’re making the best decision for your business. Pay close attention to contracts and negotiate with vendors to get the best possible terms. And finally, manage ongoing relationships carefully to keep things running smoothly in the long run.
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