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You’re Not Alone if You Don’t have a SaaS Renewal Process
With the explosion of SaaS and the increase of LoB (line of business) owners buying their own technology, it’s more difficult than ever for IT or Finance to have an effective SaaS renewal process, especially for those teams not leveraging SaaS renewal management software. Because of the lack of visibility, our data shows that enterprises underestimate their SaaS application ownership by an average of 75%.
It’s not an easy feat, and we are more than familiar with the common hurdles to obtaining visibility into enterprise-wide SaaS purchases and renewals. When you put a strategy around SaaS renewal management, you’ll have a material impact on the bottom line because enterprises are spending up to 38% of their entire supplier spend on SaaS and cloud applications.
These are some of the common challenges with SaaS renewal management and best practices to solving them. If you can master these, you’ll be an internal rock star and on your way to leading SaaS optimization strategy conversations with your leadership team and the line of business leaders.
Top 5 SaaS Renewal Best Practices
Challenge #1: Determining the purchasing department and owner for each SaaS application
- SaaS Renewal Best Practice: Look at the business unit and/or individual expense record to assign this information
- Bonus Solution: Leverage a platform that aggregates team and individual application use to best find the proper stakeholders to communicate with
Challenge #2: Getting visibility into all SaaS spend
- SaaS Renewal Best Practice: Regularly track all expense transactions to comb through and pull out all SaaS/cloud-related spend
- Bonus Solution: Keep all of your transactions within an expense management platform. Pull real-time data from your AP and Expense systems to effectively track spend across the organization, different teams and the individual.
Challenge #3: Getting the contract and contract details into a system for easier management
- SaaS Renewal Best Practice: Work with the departmental leads to obtain final contract records and create a system of record for storage of key information fields and files
- Bonus Solution: Keep all of your important contracts and documents for every subscription in one centralized system of record. This cuts the need to dig through email threads when looking for important documentation.
Challenge #4: Mapping out a renewal calendar, with auto-renewal details and key dates
- SaaS Renewal Best Practice: Based on the database of all contracts and renewals, plot these on a calendar to develop a quarterly, monthly and weekly plan
- Bonus Solution: Take all of the manual work out of this process with a software license management tool. Look at all of your upcoming renewals at a glance and figure out which will require you to spend additional time working within your organization to execute on.
Challenge #5: Creating a repeatable process for purchasing new SaaS/Cloud applications
- SaaS Renewal Best Practice: Empower the departmental business units with information about everything in their purview to proactively manage it AND educate them on how to keep the system up to date with new purchases
- Bonus Solution: Set custom alerts in your SaaS management platform of choice to notify you and your team of upcoming payments or renewals to nail down your purchasing processes
Visibility Brings Savings and Innovation Opportunities
With a living, breathing and accurate system of record for all SaaS and cloud applications across the enterprise, the opportunities are endless. Just think about a world in which you don’t have to waste time chasing the data, but can actually spend time optimizing the SaaS and cloud stacks at your enterprise and advise the business on SaaS cost savings and implementing innovative solutions.
Some of the obvious benefits for IT and Finance are:
- The ability to proactively plan for upcoming renewals. With more advanced warning, it’s possible to review the contract in greater detail, match it against organizational usage of the application and get employee sentiment around the application for the most leverage in renewal negotiations
- The ability to share enterprise-wide recommendations of top applications by function. With a 360-degree view of what’s being used and how teams like applications, it is possible to create a standardized list of applications for the entire enterprise and cut down on redundant functionality across smaller, departmental contracts
- The ability to forecast budgets with employee costs by department. As renewals come up and contracts need to grow (or shrink) based on headcount changes, it’s easier to forecast future budget changes based on accurate, historic data
Whether you start with Google Drive folders, documents, and sheets, or you have an automated way to track SaaS in your enterprise, you should get started today so that you can define a SaaS renewal management system.
Establishing a way in which you work collaboratively with the business to lead the SaaS and cloud technology conversations will position you well for future success in your career and set your enterprise up for success.
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