Picking the right software for your business can seem overwhelming, as there are thousands of software applications for you to choose from.
Similarly, it’s easy to feel bogged down with the sheer velocity of how many tools there are to use daily. When this is the case, it’s time for some serious SaaS vendor management within a SaaS system of record. This strategy is becoming increasingly popular as more and more businesses utilize cloud-based software to their advantage.
How are you managing and recording the contracts of all of these tools? Or the spend and usage in your technology stack? That’s where SaaS (software-as-a-service) vendor management comes in.
What is SaaS vendor management?
SaaS vendor management is the strategy of finding the best solutions to fix problems within a business and then introducing those solutions across the entire organization. This is done by managing application use, improving spend, and reporting on value.
Since so many SaaS vendors provide companies with both business and cloud solutions, it’s important that you choose a vendor management program with the most benefits.
4 reasons you need SaaS vendor management
With new software products being released every day, in addition to software subscription renewals, it’s common to run into some challenges using all of these tools. So in the SaaS industry, why is vendor management so important?
1. Increased visibility for software purchases
If you’re an organization that is selling a product or service to another company, chances are you’re going to make it as easy as possible for it to be purchased.
Factor this in with so many people having a company credit card on file, it’s easier than ever to add another subscription to the balance sheet. With SaaS vendor management, these accumulating costs of software will no longer go unmanaged, providing you with increased visibility of all of your purchases and showing you where there is room to potentially cut back. All of your accounts payable, subscriptions, and employee expense information can be managed in one place.
2. Enhanced security
No matter how much we think we’re cyber security experts, chances are, most of us aren’t. Even with good intentions in mind, sometimes company or personal information gets shared online. When this happens, your company gets put at risk for phishing scams and DDoS attacks, especially without a strong SaaS vendor management plan in place.
When you centralize all of your applications in one place with SaaS vendor management, you’ll be able to effectively see who is making the majority of your software purchases and train them on best practices to keep all sensitive data secure.
3. Elevated functionality across tools
If you’ve ever purchased a new software tool, only to find out it has similar functionality to a different tool you already have, you know how frustrating that can be.
For example, maybe each department in your company uses its own expense management tool. When your marketing team uses Expensify and your sales team uses SAP Concur, your company is wasting money, as both of those tools do the same thing.
When you utilize SaaS vendor management, you can see where your company is experiencing overlaps in functionalities and make the necessary steps to save money by choosing one and using it across your entire organization.
4. Improved renewal policy
When you make the most of SaaS vendor management and you have a better idea of your applications, you can keep better track of any upcoming renewals for these tools.
You can also see your upcoming renewals from least to most expensive, so you can better assess your overall budget and determine if these tools are still in your financial plan to purchase.
SaaS vendor management best practices
When you’re ready to scale your SaaS vendor management strategy, there are some best practices that you should keep front and center.
For starters, make sure to create an IT governance plan, which encompasses the authority and permissions that contributors will have in the vendor management cycle. While it’s important to manage the spend across all of your applications and departments that go into vendor management, it’s equally as important to manage the spend across individuals. Take a look at who is spending the most on these applications and tools within the company, in addition to who is spending the least. Also, make a note of who is the most active user on each tool.
When you look at this report, you can see if you’re spending too much on email marketing software and not enough on your CRM. Plus, when you have access to data surrounding who is accessing which tool the most, you can better evaluate who on the team needs to be trained to get the most out of these applications.
SaaS vendor management tips
Like anything, there is a right and a wrong way to do SaaS vendor management. To get a handle on the latest SaaS boom, while still being able to choose the tools your business wants and needs, follow these tips!
Be consistent with ownership
When you carry out SaaS vendor management processes, it’s easy for the vendor agreements, as well as the software contracts, to be owned by varying team leaders across your company. This distribution of ownership can cause unnecessary spending and underused apps -- which is exactly what you’re working to avoid in the first place.
Make a note as to who is owning the vendor relationships and work to combine them to have as few owners as possible.
Keep track of all renewals
With all of the moving parts within SaaS vendor management, one of the trickiest elements is to nail down when all of your renewals are scheduled to take place.
It’s not uncommon for an account to be set up using an auto-renewal status, meaning it is possible for the owner to be unaware they’re being billed annually for an app or software tool they aren’t even using. Another common scenario is that your team chose a free software product that is no longer free, and you’re now being billed without your knowledge.
Either way, you’re wasting money. When you effectively manage the contracts and renewals in one system, an unexpected bill will never take you by surprise.
Audit for effectiveness
You won’t know if a specific software or app is working for your team unless you ask.
Collaborate with team leaders who regularly use these SaaS tools on either a quarterly or twice-a-year basis to take an inventory of all of the tools being used and ask the following questions:
Which apps are used daily?
Which paid subscriptions aren’t being utilized?
Are any of these apps redundant?
Can any free tools replace these paid tools?
Last but certainly not least, an absolute must when it comes to SaaS vendor management is being able to stay compliant. Every app your business uses needs to meet certain industry standards.
When using multiple vendors, it’s a vital step to proactively manage them in one place, which allows you to delegate the responsibility for registration, as well as keeping records up to date for compliance purposes. This will also lessen various administrative work amongst your team.
When the technology you use for SaaS vendor management has a clear procedure in place for compliance status and obligations, you can manage the entire process in a more seamless manner. Whether that consists of keeping track of GDPR statements, privacy shield self-certifications, or data processing addendums, it’s always better to keep things all in one place.
Use a SaaS management platform, like G2 Track
A complete SaaS management platform like G2 Track can automate a ton of these tasks for you.
Enforce budgets by department with allocation by an employee
With all of this information, and so much more, displayed in one seamless dashboard, SaaS vendor management is easier than ever before.
You get what you pay for
Make sure that you’re spending money wisely and effectively on the tools that do the most for your business. In a sea of so many software options, whether it be physical tools or in the cloud, implementing SaaS vendor management the right way can make all the difference.
Mara is a Senior Content Marketing Specialist at G2. In her spare time, she's either at the gym, reading a book from her overcrowded bookshelf, enjoying the great outdoors with her rescue dog Zeke, or right in the middle of a Netflix binge. Obsessions include the Chicago Cubs, Harry Potter, and all of the Italian food imaginable. (she/her/hers)
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