Decentralized SaaS Purchasing Creates Challenges For IT Procurement

Eric Christopher
12.14.16
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If your organization is like most enterprises, then you know firsthand how rapidly cloud-based technologies are being added to your tech stack. IT Procurement teams are now tasked with connecting the dots on all software across an organizationand are often the only department that has the ability to do so. As a result, these teams are becoming the glue that holds the cloud ecosystem together for their organizations.

However, there’s something else that’s happening along with the incredible shift to cloud and SaaS software. While the software advances bring huge benefits to organizations, the decision-making processes for these purchases is changing as well. In the past, it was much easier for IT Procurement to stay on top of software decisions as they were involved in the selection and negotiation processes. However, that decision-making process is being decentralized to department leaders across organizations, removing IT Procurement from the day-to-day involvement.

The Challenge To Become Proactive

Now, IT Procurement has a new challenge: to become proactive as it relates to SaaS advancements across the enterprise versus reactive. With the new way of decentralized decision making, IT Procurement can easily lose sight of top line expenses, especially when subscription-based purchases are often made with a credit card or fall under certain dollar amount that bypasses certain procedures. One department may have 100 SaaS products in use, for example, but IT may only be aware of a fraction of those.

Another challenge for IT Procurement teams is lack of visibility into software subscriptions that may be duplicates. What happens if the marketing department has a subscription to an email service provider, and the HR department has a separate subscription to the same email service provider? That kind of overlap could be costing the organization double—and can be difficult to uncover if individuals or departments are paying via credit cards.

Finally, without visibility into the negotiated contract terms (or lack thereof), IT Procurement forfeits the ability to renegotiate terms or adjust the number of licenses based on true utilization. In renewal conversations, if IT Procurement doesn’t understand who is actually using each solution and whether there is value received, they are unable to provide the best technology for the enterprise at the best cost.

Guiding With A Lack Of Visibility

While the benefits of SaaS are endless, the new shift also presents several challenges that have become top of mind for IT Procurement teams, with visibility chief among them. Without proper visibility into an organization’s cloud-based systems, these teams aren’t able to act as the strategic glue that their roles require of them. If given unparallelled visibility into all SaaS spend, utilization, and employee sentiment, IT Procurement teams could be strategic advisors in the software purchasing cycle.

Drive IT Procurement Strategy

At Zylo, we believe cloud licensing can make IT Procurement strategic. Interested in learning more? Download our latest ebook entitled, “How the Cloud Shift Can Drive IT Procurement Strategy”.