Easy Steps To Track And Manage Your SaaS Spend
In today’s world, many tech companies are moving fast and taking products to market with the aim of hockey-stick-style growth. However, these companies need the correct equation to support their business purposes irrespective of size.
Over the years, cost management was something people only thought about when things became messy. However, the concept has become a priority rather than a mere afterthought.
Today, many software-as-a-service (SaaS) applications are being developed. Many companies use these applications to power their businesses. However, with the growth comes increased spend on these applications.
As a result, monitoring your SaaS software is more important than ever. So, what are the steps to take to manage your SaaS spending? This article shows you easy steps to track and manage your SaaS spending.
What is SaaS spend management?
SaaS spend management means keeping your SaaS spend under control. It is similar to your regular spend management, which involves setting healthy limits on spending. SaaS spending also consists in monitoring your usage and making necessary changes to ensure you are within your budget.
Besides budget control, SaaS spend tracking and management also involves using strategies, tools, and tactics to monitor and control SaaS costs. These tools display SaaS platforms in use, their usage, and costs. Hence, you can avoid signing up for any service you cannot afford.
In addition, these SaaS products are subscription-based, so you must keep a close eye on renewals. Furthermore, you must be on the lookout to cancel any SaaS service you no longer use.
So, SaaS tracking and management go beyond just contract or license agreements. You must figure out how your business can spend less on SaaS by letting go of the necessary SaaS products.
Furthermore, when you carefully manage your SaaS spending, you can save more money and be on a budget.
Seven easy steps to track and manage your SaaS spend
You need effective methods to track and manage your SaaS spend. Adopting such methods and strategies saves you a lot of money in the long run. Besides, you may have already been using these SaaS spend management methods unknowingly.
For example, you may have taken advantage of these products’ trial periods to test new software before purchasing. You could also be negotiating with vendors for perks or discounts.
Although these are effective management techniques, you need other defined methods to ensure efficiency. Below are some effective SaaS management methods.
- Centralize your SaaS product purchase decisions
Most tech companies usually find themselves in a bind regarding spending on software. Sometimes, they want to avoid the high cost of purchasing these product licenses for every employee. However, these organizations do not want to bother themselves with the inflexibility and expensive on-premise solution.
A centralized SaaS spending decision can help you enjoy reduced costs and flexibility. How does this work? Rather than purchasing SaaS licenses for each department, you can purchase software for each person or department based on their usage. In the long run, this method saves you money and gives you total control over your company’s software spending.
- Eliminate duplicate products or SaaS overlap
Sometimes, your SaaS products have a high chance of overlapping with some existing applications. Most companies purchase SaaS software within departments’ budgets based on their needs.
For example, a marketing department could use a cloud suite for remarketing, advertising, and email automation. In addition, a smaller team in the same department might prefer to use the email capabilities of another software.
As a result, these businesses might have unnecessary products and processes in a single department. This can become a big problem for the company and the employees.
For employees, the redundant processes can lead to communication issues, fatigue, and wasted time. These issues sum up and decrease employees’ productivity and work-related contentment. Moreover, poor SaaS management causes decreased efficiency and lower productivity.
There are ways to steer away from this problem. First, you can research each SaaS product carefully before purchasing it. Secondly, you should regularly subscribe to the SaaS applications you use.
- Improve your SaaS products policies
A business owner understands that managing finances is essential to a successful business. However, most companies usually don’t have good spending management in place regarding software. Subsequently, these business owners spend too much on unnecessary features or pay for unused licenses.
As a business owner, you should always create and follow good policies regarding software purchases. These policies will save your business a lot of money.
Anyone or department responsible for purchasing SaaS applications should ensure it is worth every penny. For example, if the marketing team is in charge of SaaS applications, they should be in charge of purchasing email marketing software. Some actions to take regarding software purchases include:
- The approval chain should be respected and consulted before purchasing any app.
- Develop a new purchase method for any software and licenses.
- Understand your department’s expectations and responsibilities regarding any software employees need.
- Use Personally Identifiable Information (PII) to keep track of anyone using the purchased app.
- Alert the proper departments in case of contract breach or bugs
- Create a SaaS inventory
Building a SaaS inventory will help you avoid the stress of unused applications and ensure your business runs smoothly. So, how do you make a SaaS inventory?
- First, eliminate unused software by having an overview of all your software and renewal dates.
- Next, keep track of your software to prevent paying for unused applications. Also, ensure you get updates on the latest features of any application.
- A SaaS inventory can help save money by avoiding late payments and negotiating a better deal with app vendors.
- A SaaS inventory ensures that only authorized users access your application, keeping your data safe.
An updated SaaS inventory should have different items to be effective. The checklist should include a list of all software installed on each computer with its providers. This way, if software needs to be updated, it gets noticed quickly.
In addition, a SaaS inventory should also include a detailed list of every user account connected to each computer. This way, if any user needs to be added or removed from the system, it will be easy to detect the affected computer. Finally, getting SaaS to spend management software will help you track your SaaS inventory better.
- Review and analyze your SaaS apps and licenses frequently
While having an inventory is necessary, it is not the only thing to do to manage your SaaS spending. You always have to take your time to review your SaaS software three to four times a year. This review will help you grasp if you need these applications or not.
You have to understand that SaaS applications can change with time. Hence, new options can come into play, and the company should always be ready to evolve.
In addition, you should always review your SaaS software to ensure you are using the best solutions for your needs. Reviewing these apps will help you save money and improve efficiency in your company.
Most organizations still pay for SaaS licenses that they no longer use. These licenses can become a considerable expense and pose a significant security risk. You must review them periodically.
- Handle cancellations and renewals
Any user who has ever managed a SaaS budget understands that cancellations and renewals can impact your SaaS spend. This is why it is important to handle them quickly and efficiently.
When you track your cancellations and renewals, you will get the best value for your investment. Doing this requires effort but is worth it in the end.
You can be left behind without helpful software when you miss the renewal period. This automatically affects your productivity. So, opting for an auto-renewal for your SaaS software is mandatory.
You might miss your cancellation period if you do not carefully track your software. You need an updated inventory and review system. Otherwise, unnecessary software will sip back to renewals, adding to your expenses.
- Get a SaaS management software.
Getting a SaaS management tool is a solution to managing and tracking your SaaS spend. This management tool can be the best option for your SaaS spending.
With this tool, you can manage all your subscription expenses in one place. You do not need to scramble to remember what app you are paying for or how much it costs.
The SaaS management tool tracks your approval lists and policies and centralizes your software purchases. In addition, you will have more visibility into how you spend and be able to detect any potential waste. So, the SaaS management tool is the best option for precise analytics and optimization.
So, these are the seven steps to track and manage your SaaS spend. This is a starting point as every organization is different from the others. However, you can constantly tailor these suggestions to fit your company’s needs.
The key to avoiding SaaS spending is planning and staying on top of your contracts. Finally, spend less and save more with a SaaS management tool.