The Software-as-a-Service (SaaS) industry has experienced substantial growth over the past decade. In fact, from 2015 to the present, the industry has seen a remarkable increase from $31.5 billion to an estimated $171.9 billion.
This significant expansion is indicative of organizations’ growing reliance on cloud-based software solutions to streamline their operations, boost productivity, and maintain competitiveness in today’s digital landscape.
As the SaaS sector continues to flourish, software expenditure has emerged as the third-largest financial outlay for organizations, trailing only employee salaries and office expenses.
Consequently, effectively managing software spending has become a critical concern for businesses. Uncontrolled or inefficient spending on SaaS subscriptions can have a profound impact on a company’s financial stability and growth potential.
To address this challenge, many organizations are turning to SaaS spend management software solutions. These platforms offer a range of benefits that enable businesses to control costs, make informed decisions, and maximize the value derived from their software investments.
What is a SaaS spend management platform?
SaaS spend management platforms are software applications that aid organizations in efficiently managing their SaaS expenditures, applications, vendors, licenses, and subscriptions. These platforms provide a centralized hub for monitoring, controlling, optimizing, and securing the various software applications and services utilized within an organization.
On average, a company wastes or leaves unused 30% of its SaaS software spending. However, this need not be the case.
Businesses employ SaaS spend management platforms to regulate their SaaS portfolio costs and maximize the value of SaaS applications through effective cost optimization tactics.
These platforms assist organizations in optimizing their SaaS investments by identifying cost-saving opportunities, ensuring budget compliance, and enhancing security and regulatory adherence.
They streamline administrative tasks, help procurement teams foster better vendor relationships by providing accurate insights on usage and pricing changes, and enable data-driven decision-making regarding software investments.
Here are some of the reasons why a firm requires SaaS spend management tools:
Centralized Spend Tracking
A Software as a Service (SaaS) spend management platform integrates all financial data into a single repository, offering immediate and up-to-date insight into expenses across various departments. This facilitates enhanced decision-making capabilities by identifying patterns, monitoring budgetary allocations, and identifying potential areas for cost reduction.
Cost Optimization
By means of data analysis and reporting functionalities, Software as a Service (SaaS) expenditure management platforms facilitate the identification of areas of excessive spending or inefficiencies for businesses. This results in well-informed cost reduction decisions and resource allocation, ultimately optimizing the value of each dollar expended.
Automated workflows
Software as a Service (SaaS) platforms such the capability to automate monotonous tasks, including but not limited to renewals, approval workflows, provisioning, and license reclamation. This not only results in time savings but also minimizes the occurrence of human errors, thereby guaranteeing precise financial data and streamlined operations.
Prevent shadow purchases
Software as a Service (SaaS) expenditure management tools offer comprehensive application visibility, facilitating the identification of shadow IT by IT teams. These tools are capable of issuing proactive alerts whenever a user procures an unsanctioned application. This functionality aids in the prevention of unauthorized purchases and ensures the security of your software stack.
Streamlined procurement process
One can optimize their procurement process through the implementation of automated workflows. By allowing the spend management platform to handle approval requests, valuable time can be saved that would otherwise be spent on chasing approvals. This enables the team to concentrate on strategic tasks, thereby enhancing overall productivity.
Renewal alerts
Renewals in the realm of Software as a Service (SaaS) can be a complex matter. Certain organizations continue to rely on spreadsheets to monitor renewals, which can result in overlooked renewal dates and increased expenditures. However, SaaS spend management software offers renewal workflows that enable organizations to proactively manage renewals and optimize their spending.
SaaS Spend visibility
Lack of visibility into SaaS expenditure can impede the ability of finance teams such as yours to effectively manage SaaS spending. To address this issue, a SaaS spend management platform can be integrated with your Single Sign-On (SSO), financial, and Human Resources Information Systems (HRIS) to offer a comprehensive overview of your SaaS stack and expenditure.
Through SSO integrations, the platform can gain access to your entire SaaS stack, while financial system integrations can provide a detailed breakdown of your spending on each application and vendor.
Conclusion
In conclusion, it can be inferred that a Software as a Service (SaaS) spend management platform has the potential to promote financial accountability, facilitate informed decision-making, and optimize resource allocation within an organization. It has come to light that many businesses are currently overpaying for SaaS applications, albeit without their knowledge. However, it is our belief that you, as the reader, are already taking steps towards optimizing your SaaS spend.
The key to achieving this goal lies in utilizing the appropriate SaaS spend management software to take charge of your SaaS applications and expenses. Key Subscriptions is a comprehensive SaaS spend management platform that offers cost optimization, contract management, automated renewal, and procurement workflow features, all of which can assist businesses in reducing their SaaS spend.
