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In recent years, companies have started adopting and embracing more and more software as a service (SaaS) tools. Even though a lot of these tools bring tremendous value to an organisation, this trend does come with a challenge. How do you manage these tools and more importantly, how do you prevent an uncontrolled growth in SaaS spend?
For many businesses, this is a daunting task. One that you might (unconsciously) postpone. After all, it is unlikely that you specialise in SaaS contract management and negotiation. And besides that, it’s not like you have a lot of time on your hands.
Bring in service providers like Spendicious, competitor and competitor. Parties that specialise in creating an overview of all your SaaS spend and helping out in getting you on the best contract possible. Of course, their approaches differ, but in this article we take you through Spendicious’ approach to reducing your SaaS costs.
Create overview
The first thing we recommend to new customers is creating an overview of all their software as a service tools and providers. Many organisations don’t have a clear picture of what SaaS tools they use. This leads to a few challenges:
First of all, there’s often overlap between the services offered by the different SaaS vendors. For example, one department might use Miro as their digital whiteboard solution while other departments use InVision.
This is related to the second challenge; “shadow IT”. If there is no clear overview of tools in use, your colleagues will take initiative themselves. Even though this is often a good thing, it can also lead to buying unapproved (SaaS) tools.
Thirdly, many companies without an overview of the SaaS tools in your organisation, will be caught by surprise when a renewal comes through.
Creating an overview might seem like an intimidating job. However, we make it as easy as possible. The only thing you need to do is upload the information you have in your Google Sheets or Excel, the CSV export from your ERP tool, or the order forms and invoices you receive from your SaaS vendor. The Spendicious platform will turn that into a clear overview of SaaS tools in use and interesting insights in your SaaS spend.
Assign ownership
Once you know which tools are used in your organisation, it is important to assign an owner to each of them. We recommend not only assigning ownership to a person, but also a department as this makes it easy to track your SaaS spend per team.
Besides the benefit of now having someone responsible for the SaaS contract and potentially, communicating with the vendor, you might also find out that you cannot really assign ownership to a specific contract. We often come across SaaS contracts that were once purchased by a colleague who now left the organisation. These are usually smaller contracts (with the likes of e.g. Trello, WordPress or Canva), but they definitely add up!
Delete duplication
At this point, you have a good overview of which tools are in use and who owns them. Now it’s time for action. The first thing we recommend is finding out which tools overlap in functionality. These are usually easy cost reduction wins as bringing all usage to one vendor often leads to discounts based on economy of scale.
It is good to realise that taking out duplication isn’t a quick task. Your colleagues can be quite attached to the tool they have been using and it will take some change management to get them to use a competitor. However, once you know where the duplications are, you can set deadlines and communicate these to the relevant stakeholders.
Check for unused licences
After you’ve got an idea of the duplicate SaaS tools in your business, it is time to clean up the tools that are rarely used. This can be a massive step in controlling your SaaS spend as some research shows that over 50% of SaaS licences are unused!
By connecting your single sign on (SSO) tool to Spendicious, you’ll be able to get an overview of which employees logged into what tools. This can definitely be a bit of homework, but your Spendicious contact person is there to help out. And trust us, it’s worth it.
Once we have outlined this, you can make rules about what you consider an unused licence. Many companies we work with describe a licence being unused if it’s not used at least once a month.
Review Spendicious’ cost reduction plan
At this point we have what we need to create a cost reduction plan. Your dedicated Spendicious buyer will craft an overview of where we think you can save money and how much savings we expect to reach.
The SaaS tools “marked” for cost reduction will be prioritised based on the size of potential savings and the time left on the contract so that you know where your dedicated buyer will start with.
Once you have reviewed and approved this plan and the savings goal, we’ll get to work.
Sit back and relax while we reduce your SaaS costs
Your Spendicious buyer will start engaging with your SaaS vendors. Our work can be classified in four categories. The first three are based on the data we’ve jointly gathered in the previous steps:
Cancelling contracts for unused tools
Downsizing contracts with unused licences
Assisting in migrating users from one (duplicate) tool to the other
This doesn’t happen overnight. In many cases you’re locked into a contract that you’ll have to sit out. That’s why your Spendicious buyer will ensure they engage with the right vendor at the right time.
The fourth category is a little different and usually more ad hoc: avoiding price increases upon renewal.
Many SaaS providers will increase their prices on a yearly basis. Your Spendicious buyer will engage with them to keep this to a minimum.
Of course, we’ll keep you up to speed on what’s happening. In the Spendicious platform, you will be able to keep track of the work that has been done and the cost reductions that have been achieved.
P.S. New contracts
In many cases, companies want to buy new SaaS tools or upgrade their existing tools during the year. Of course, we will be there to assist you in negotiating the best possible price for you!