Top 7 SaaS Management Metrics to Watch as a Procurement Professional

With 491 renewals annually for the average enterprise – or two per day – managing SaaS renewals is a complex and ongoing task. The sheer volume of renewals can lead to overspending if teams lack full visibility into their software inventory and contract details. Not to mention, you’re more apt to miss cost-saving opportunities.

The Gartner® 2024 Magic Quadrant™ for SaaS Management Platforms reveals the extent of this risk. “Through 2027, organizations that fail to attain centralized visibility and coordinate SaaS life cycles will overspend on SaaS by at least 25% due to unused entitlements and unnecessary, overlapping tools.”

Implementing a SaaS Management Platform (SMP) is critical to resolving this challenge. By centralizing contract, spending, and usage data, an SMP helps Procurement scale renewal management across all applications. As a result, the renewal process becomes streamlined and you’re poised to optimize spending.

With an SMP in place, procurement professionals can more easily manage renewals by tracking essential metrics and leveraging detailed data for better negotiating power. This visibility helps control costs and ensures that the procurement team is fully prepared for each renewal, minimizing the risk of last-minute decisions that can lead to suboptimal outcomes.

How to Get Visibility into SaaS Spending and Renewal Data

Unknown SaaS applications (shadow IT) prove challenging for Procurement, because they result in surprise renewals – or unnecessary or automatic renewals. Even if you know about an application, it’s not guaranteed that you’ll have all the contract, spending, and usage data to make an informed decision.

So how do you get the visibility you need? 

It begins with SaaS discovery and getting an inventory of all the applications in your portfolio. After all, you can’t manage what you can’t see. SaaS Management Platforms were designed to find SaaS and root out hidden expense purchases. Zylo, for instance, uses AI-powered financial discovery to do this.

From there, you can use the SMP to house all of your data. That includes your contracts, associated spending, renewal dates, and other metadata important to your business. Together, this creates your system of record.

Once your system of record is up and running, the SMP makes it easy for Procurement to surface and digest all this information as they prepare for a renewal. Automated insights and convenient dashboards and reporting tools help you track key metrics, uncover cost-saving opportunities, make informed renewal decisions, and negotiate better deals.

As you manage your SaaS portfolio, what metrics really matter? Let’s examine 7 SaaS Management metrics you should watch as a procurement professional.

Top 7 SaaS Management Metrics to Watch as a Procurement Professional

For procurement professionals, managing SaaS portfolios effectively hinges on tracking the right metrics. These key metrics generally fall into two critical categories: inventory and renewals. By getting a handle on these metrics, you gain a sense of control and confidence in your ability to manage your SaaS renewals effectively.

Inventory metrics help Procurement track software spending, identify underused licenses, and consolidate overlapping tools across departments. They enable more efficient use of your budget and the identification of savings opportunities.

Renewal metrics ensure proactive renewal management, enabling you to track upcoming renewals, vendor performance, and contract terms. Monitoring renewal metrics helps Procurement teams negotiate better deals and avoid the pitfalls of last-minute renewals that often lead to unnecessary or excessive spending.

1. Total Spend Over Time

Without real-time visibility into software spending, managing costs becomes difficult. This often results in missed opportunities for savings and inefficient spending. Monitoring total spend over time allows procurement professionals to recognize patterns, identify waste, and seize cost-saving opportunities more efficiently.

To keep track of this metric, Zylo’s always-on discovery continuously updates financial data. User-friendly dashboard visualizations provide up-to-date information so you can swiftly evaluate spending patterns and take timely, informed action. By taking this strategic approach to managing SaaS investments, you ultimately improve cost efficiency.

2. Savings Over Time 

Every SaaS renewal brings a chance to cut costs, but capturing those savings requires careful tracking and reporting. Without a clear view of cumulative savings, it becomes difficult to demonstrate the value of your SaaS Management program. 

Monitoring savings over time is another Procurement metric you must track. It helps you assess the impact of your efforts and provides a way to showcase progress toward your organization’s cost-saving goals. Visibility into this metric is especially important to demonstrating program value to your executive team.

By tracking savings over time in a SaaS Management Platform, you can easily report back to leadership. Zylo’s Savings Center helps you track and consolidate all savings data—from opportunities identified through benchmarking or license reclamations to realized savings from negotiations or rightsizing licenses. As a procurement professional, you can easily visualize these savings, offering a clear, ongoing view of financial performance. 

3. Spend Sources  

SaaS spending can come from multiple channels, including traditional Accounts Payable (AP) or employee expense. In fact, employees purchase 46% of SaaS applications via expense accounts. Procurement teams risk losing control over the budget and missing critical spending leaks without proper visibility into these spending sources.

Tracking spend sources helps procurement professionals pinpoint unknown and unauthorized purchases, also known as “shadow IT.” Understanding where spending is happening is essential to reduce unnecessary spending and find opportunities to optimize costs.

For instance, Zylo Discover integrates with financial tools to identify and centralize all software spending. Continuously monitoring purchases in real-time ensures that no software expense goes unnoticed, providing Procurement with the insights needed to manage and control all spending efficiently.

4. Upcoming Contract Renewals  

Renewals often catch Procurement teams by surprise, leading to two different scenarios. In the first, auto-renewals sail past unnoticed, meaning money goes out the door without consideration for whether you planned to renew or not. 

For the second scenario, renewals spring up unexpectedly at the last minute, leaving you with limited time to prepare. Without ample time, you’re unable to gather data, shop for options, understand your licensing needs, benchmark pricing, or negotiate effectively. 

To avoid both situations, monitor upcoming contract renewals for the next 30, 60, 90, and 120 days. This Procurement metric helps you stay proactive, ensuring that all stakeholders are prepared and the renewal process is smooth and well-negotiated.

For example, Zylo simplifies this by offering reports on upcoming renewals and a dynamic renewal calendar. The renewal calendar makes it easy to see what is coming up and the contract value so you can prioritize and plan ahead.

5. Applications Without Contracts  

When a renewal approaches, having contract details on hand is crucial for informed decision making and negotiating. Without easy access to contracts, you spend more time searching than preparing for the renewal process.

Monitoring applications without contracts ensures you know where to track down missing agreements. Although an SMP isn’t a contract management system (CMS), it’s vital for centralizing contract information. 

For example, Zylo helps uncover when an app lacks a contract so you can take action. The Contract Center then serves as your centralized hub for managing all SaaS contracts effectively.

6. Applications with Multiple-Channel Spend  

Multi-channel spend occurs when an application is purchased through more than one channel, often both expense and Accounts Payable (AP). On average, organizations have 23 apps with this issue, highlighting inefficiencies in purchasing processes.

It’s important to monitor multi-channel spend, because it reveals opportunities to consolidate contracts and reduce software spending. 

An SMP that focuses on financial discovery, like Zylo, provides the detailed insights needed to track spending channels. Zylo’s Inventory Insights highlight what apps have multiple-channel spending for easy identification and consolidation opportunities.

7. Contracts Without App Owners

App owners are vital stakeholders in SaaS renewal discussions. When an app or contract lacks an assigned owner, gaps in accountability can occur, leading to inefficiencies in managing renewals and tracking usage.

Identifying contracts without app owners is critical for taking corrective actions. Assigning app owners ensures each renewal has a responsible party to guide decision-making. Zylo makes this process simple by allowing you to generate reports that spotlight contracts lacking app owners. 

Using automation, this report can be regularly distributed, ensuring constant monitoring and helping Procurement teams stay on top of ownership assignments in their system of record. This regular oversight ensures every application has a designated owner, leading to smoother renewals and more strategic renewal management.

Use a Procurement Dashboard to Track Key SaaS Management Metrics

Procurement teams often struggle to access the right data, leading to overspending, missed savings opportunities, and chaotic, last-minute renewals. This lack of visibility creates inefficiencies that increase costs and undermine the potential benefits of managing a SaaS portfolio.

A Procurement dashboard solves these challenges by providing a single, centralized view of all key SaaS management metrics. It offers real-time data that consolidates spending trends, app usage, and upcoming renewals, empowering Procurement teams to make informed, proactive decisions.

With Zylo’s Dashboards & Custom Widgets, using data to drive Procurement initiatives around renewal management and cost savings is in the palm of your hands. Zylo offers the most flexible configuration of dashboards and widgets available, making it easier than ever to:

• Cut Through the Noise: Focus on the metrics that matter most, reducing the time spent analyzing data and increasing operational efficiency.
• Streamline Dashboard Creation and Assignment: Ensure that the right people have access to the right information exactly when needed.
• Personalize the Experience: Tailor each user’s dashboard to their specific needs and role within the SaaS Management ecosystem, enhancing relevance and effectiveness.

Ready to see how Zylo can transform SaaS Management reporting for your Procurement team? Request a demo today and start making better-informed decisions that drive your business forward.