Digital transformation has given rise to a sweeping technological presence. SaaS, in particular, has opened up a whole new world of possibilities for business functionality, with optimized tools tailored to fit each and every need. SaaS enables so many gains that applications are frequently adopted haphazardly and with minimal oversight.
The widespread availability of SaaS applications has made it possible for each department to pick and choose their tools of choice. This sounds like a dream come true—each department handpicking the tools they love and want to use. Everyone’s happy.
But because budgets and decision-makers are often siloed and many enterprises lack a central repository for SaaS application management, budgetary surprises, and the more-than-occasional headache can arise when automatic SaaS subscriptions renew unexpectedly. The benefits of SaaS come at a significant cost when there is a lack of visibility into subscription renewals.
But, it’s possible if you use these seven best practices to guide your SaaS renewal management.
1. Gain visibility into all SaaS spend to optimize subscription renewals
According to Zylo data, enterprise organizations with more than 1,000 employees total investment in SaaS represents spending of $10,000 or more per employee. That’s a significant chunk to be spent on organizational costs, especially ones that are only minimally governed. Before revamping or implementing a successful SaaS renewal process, take stock of the current SaaS inventory. Gather all of your SaaS subscriptions by department and establish a baseline, documenting the costs and dates associated with all purchases.
2. Identify owners, stakeholders, and users to optimize the SaaS renewal process
Establishing a SaaS renewal process is important for budgetary control and efficiency. You need to gain a firm understanding of who is using which applications and who oversees the management of each subscription. Compiling this information will optimize communications and will help paint a comprehensive picture as you create your SaaS renewal process.
3. Assess contract details including notification period and consumption metrics to inform a SaaS renewal strategy
Modern businesses rely on data and analysis of information. Data analysis is essential for determining successes and identifying areas of improvement. In a similar fashion, a subscription renewal strategy should be based on data. Take a long, hard look at each SaaS application and determine which employees are successfully using each tool and which applications have overlapping functionality. This analysis will help uncover whether usage and value warrant a SaaS renewal.
4. Build a comprehensive SaaS renewal calendar
In addition to data, successful renewal strategies require transparency and a centralized plan for continuation. A comprehensive SaaS renewal calendar will promote organization-wide adoption of policy and create a streamlined approach, ensuring that applications are utilized to their full potential and are governed appropriately.
5. Create a proactive culture for SaaS renewal management and procedure
Company culture informs many different aspects of a business. Creating a trusted process and promoting a culture where all departments proactively follow the established SaaS renewal process guidelines will enable efficiency and save on costs.
6. Collaborate with stakeholders, alert them early, and prompt them to make planned SaaS renewal decisions before deadlines pop up
This is where collected data starts to pay off. After compiling all the necessary metrics, use them to inform actions and decisions. Surprise deadlines often create impulsive decision making which can lead to a renewal that is ultimately not needed or utilized for lack of alternative options. Develop a notification strategy apprising stakeholders of upcoming SaaS renewals. Crunch-time decisions are failures at worst and uninformed at best.
7. Enable informed SaaS renewal negotiations
Ultimately, painstaking data gathering and evaluation will lead to more informed decisions. Similar to SaaS adoption, stakeholders must know exactly what they will receive from a subscription renewal. Arm stakeholders with a firm understanding of how their SaaS applications are used and what to expect from each subscription renewal.
The goal of these efforts is to create an effective, efficient SaaS renewal process, which requires a holistic approach. Utilizing these SaaS renewal management best practices will simplify and optimize a subscription renewal strategy.
Advanced SaaS Renewal Management Guide
Regardless of company size or experience, decentralized SaaS adoption challenges IT and Procurement leaders who own software sourcing to find new ways to safeguard value, demonstrate ROI, and prevent risk with this large area of investment.
An especially challenging aspect of managing SaaS across a business is developing a SaaS renewals strategy. A sound SaaS renewal strategy will:
- Reduce the financial impacts of missed renewals and redundant purchases.
- Increase visibility and awareness of an organization’s entire SaaS portfolio.
- Improve organizational security and data protection.
Download our SaaS Renewal Management Guide to learn some of the best practices and strategies for approaching software application renewals in the age of SaaS.