How do you gain SaaS value for your Procurement team and maximize your tech investments? Let’s start with Procurement’s role.
By establishing Procurement as a central support team, they can focus on maximizing the value of your SaaS applications. Additionally, that support is enhanced by collaborating with business units and teams to effectively manage their subscription-based software.
When combined with SaaS visibility and management, a Procurement roadshow focused on SaaS can enable departments and teams to identify the unique challenges they face with SaaS tools.
Goals for a Procurement SaaS roadshow:
- Identify all SaaS applications and associated costs
- Discover all relevant application details, including owners, users, and licensing
- Measure application utilization
- Develop a roadmap for maximizing application value
Step 1: Create SaaS Value for Procurement with Discovery
Establish Visibility Into Existing SaaS Tools
Identifying SaaS applications and their related cots throughout the organization is a critical first step. As SaaS tool usage expands and grows, almost anyone can now be a software buyer, including employees.
SaaS has become ubiquitous in most organizations because it’s easy to purchase, implement, and scale. And frequently, software vendors who use product-led growth models specifically market to end-users (aka departments, teams, and employees)—not IT or Procurement teams.
These factors and tactics can lead to the explosive growth of shadow IT— digital tools and technologies deployed in the organization without IT oversight or supervision.
No matter how large your organization is, discovering the current inventory of all SaaS and identifying ownership is the first step towards building new governance and controls. Zylo recommends using financial transactions as the source of truth for uncovering all software spending.
Once the initial discovery process is underway, gaps in SaaS spend data will become apparent. For example, according to Zylo data more than 50% of SaaS purchase transactions are not accurately attributed as software, which underscores how difficult it is to even identify shadow IT when present and the need for additional discovery.
For many organizations, a SaaS discovery process represents the first attempt at holistically identifying sources of software acquisition.
Create a System of Record
Don’t let good information go to waste. Preserve and maintain all discovery details in a system of record or collaborative record-keeping tool.
It’s possible to create a system of record using a spreadsheet, but because spreadsheet-driven record-keeping relies on manual curation – a lengthy process for large organizations – information becomes outdated quickly.
Zylo’s SaaS Management platform creates a continually updated and refreshed system of record that procurement, IT, and LOB teams can use as the source of truth for all SaaS-related actions and decision-making.
Step 2: Create SaaS Value for Procurement by Measuring & Managing
Recognize Cost Containment Opportunities
After identifying all applications within use in the organization and adding key information where needed, the next step to optimizing a SaaS portfolio is to contain costs and reduce wasted spend.
This is where the Procurement roadshow format can have the most impact. In most cases, each respective business unit will maintain its own “slice” of the overall application inventory pie. Now, with the centralized information produced by the discovery process, Procurement teams can help each business unit—and the organization overall—save money.
Recognizing cost containment opportunities for SaaS inventory management typically focuses on consolidating duplicate applications, eliminating functional overlaps, or transitioning applications into more favorable terms via enterprise agreements.
Drive Increased Application Value
For many Procurement teams, obtaining maximum value from SaaS applications frequently takes a higher priority than cost containment or reduction measures.
This is especially true for Procurement teams managing large SaaS deployments of company-wide “backbone” solutions such as Salesforce, Workday, or G-Suite. Their primary goal is to get as much value out of these solutions as possible. To do so, Procurement and stakeholders must measure the utilization of their SaaS tools.
Zylo’s SaaS management tool empowers teams to uncover SaaS application utilization data such as last login, license count, and other activity indicators through integrations. Many applications (but not all), make this information available via direct queries or data exports as well.
With utilization measured, Procurement can drive new value for SaaS in three ways:
- Stratify users by type:
A license that is deployed but under-utilized or unused costs the same as a fully utilized license. When you measure active user details, you can understand the needs of power users, gain awareness of casual users, and identify those who have never used their license. With that intelligence, you are armed to negotiate more strategically at renewals and align license quantities and types appropriately to the users in your organization.
- Provide proactive training and enablement:
You expect a return on your software investment. Now that you’ve stratified your user base, you can target your power users and elevate their visibility in your organization, nurture seasonal users, and provide training and enablement to infrequent users.
- Understand how application adoption works for your company:
With real-time views into active user counts by license type and org, you now have a pulse on how strategic applications are adopted. You can see which user types are driving value and report back on how these applications are driving critical business processes.
Step 3: Create SaaS Value for Procurement with Collaboration & Governance
Continue the Conversation
While establishing a system of record and demonstrating how business units can decrease costs and increase value via roadshows, Procurement builds collaborative processes that reinforce the shared goal of managing SaaS in the organization effectively and efficiently.
A regular cadence that involves reporting the results of utilization measurement and planning for upcoming renewals helps continue the conversation.
After answering the primary questions related to making the cloud software portfolio more effective, an essential goal for Procurement teams is defining the software acquisition, lifecycle management, and off-boarding process. In many organizations, this is accomplished by:
- Defining who can and cannot purchase or implement software on behalf of the organization
- Standardizing purchase channels and processes
- Creating a software review process for large acquisitions that requires the approval of stakeholders
- Documenting a framework for application lifecycle management
- Defining a software offboarding process to ensure risk reduction and compliance with data and security protocols
Few teams are as uniquely positioned as Procurement to deliver increased value and efficacy for the deployment of SaaS tools within an organization.
By using a Procurement roadshow to discover each team’s current SaaS portfolio, enable them to measure and manage their SaaS tools for increased effectiveness, and promote policies that contribute to a system of governance, the organization’s overall approach to SaaS management improves.
Ready to drive more SaaS value for your Procurement team? Learn more about Zylo or request a demo to see how SaaS management maximizes subscription software investments.
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