Software-as-a-Service (SaaS) vendor management is a critical process for managing the vendor and supplier relationships of a business using SaaS. Many businesses feel overwhelmed by the sheer number of tools available on the market; investing in too many tools can be wasteful and difficult to manage.
SaaS vendor management helps simplify the process by efficiently recording and managing contracts on a centralized platform. With SaaS vendor management, organizations can identify strategies for resolving common business problems that can be introduced across an entire organization.
Learn more about the importance of this technology and how to develop an effective SaaS vendor management solution:
Importance Of SaaS Vendor Management
Businesses are responsible for all aspects of the vendor lifecycle, from the initial onboarding to the renewal or termination of contracts. SaaS vendor management can aid organizations in every stage of the SaaS vendor lifecycle, making it an essential strategy for nearly every business. There are many reasons to introduce an effective SaaS vendor management solution, including the following:
Ensure A Good Return On Investment
Many businesses enter into vendor contracts without first performing adequate research. It is not sufficient to be convinced to purchase by a sales pitch without practicing due diligence. There is always a risk that after closing the sale, a vendor may not deliver what they originally promised. SaaS vendor management solutions make it easy for businesses to review the terms of a contract for complete understanding, before moving forward. This will help ensure that the business receives a good return on its investment.
Gain Access To The Right Tools Quickly
Companies cannot afford to wait when it comes to accessing valuable tools that could help their business grow. Although an on-premise vendor management program can be useful, it can take a significant amount of time to implement.
Cloud-based solutions enable businesses to get their vendor management solution up and running quickly and with minimal disruption to their normal operations. Of course, a business will want to prepare in advance by uploading all of the appropriate information to decrease the amount of time it takes to make the program ready to deploy.
Maintain A Centralized System Of Records
It can be difficult and time-consuming to manage multiple vendors manually. These manual processes can also increase the risk of errors, resulting in redundancies and putting the business at risk for cyber threats. When problems occur with vendors, it is important to have a clean audit trail that can establish the point of any errors.
SaaS vendor management solutions allow organizations to develop a centralized record-keeping system where information is easily accessible. Records can often be searched by date or vendor name, making it easy to keep track of new and current vendors.
Developing A SaaS Vendor Management Solution
Before moving forward with SaaS vendor management, it is important to gather a team which will develop an effective solution to meet the distinct needs of the business. Here is a look at how to develop an effective SaaS vendor management solution.
1. Identify IT Needs Across The Organization
It may not be clear what each department requires in terms of vendor products and services. Instead of wasting money by selecting tools that may be helpful, reach out to internal stakeholders to identify the organization’s main priorities. Ask what problems they are trying to solve, what types of tools may be helpful and who will use these tools.
Next, determine if there are any existing tools that may meet these needs. SaaS tools are regularly updated with new features and functionalities as technology evolves. Keep an SaaS application inventory to see if any existing tools have upgraded since the last update. If there are gaps in features or functionalities, consider seeking new vendors.
2. Evaluate Options On The Market
After deciding to invest in a new SaaS application, the next step is to evaluate options already on the market. Choices include free, low-cost and open-source tools, as well as more costly or custom choices. There are several things that business leaders want to consider when performing evaluations.
Identify competitors in the market and see how they rank amongst one another. This can be a great place to start a search. If possible, speak with peers who may be using the same or similar software to see what they recommend. Perform extensive online research to help narrow the options.
Once the list has been narrowed to just a few candidates, perform a more in-depth evaluation. Look at their capabilities, such as available features and customization options. Consider what features are necessary and which will likely be unused. Next, look at how each option is priced and how the pricing compares to its competitors.
Next, narrow down the remaining options by the ease of setup and use. Establish how long it will take to become fully operational and if the development team will be involved in this setup. Also, consider the learning curve of the tool, if significant training will be required and how long it will take to get each team member onboarded.
Finally, review the customer service practices of the vendor. What level of customer service is offered such as phone, real-time chat or email? Look at what reviewers and peers have to say about the customer service experience. Consider areas in which the business may need extra support and see if it will be available upon purchase.
3. Complete The Vendor Approval Process
Vendor approvals can be highly time-consuming without the right process in place. Prior to approval, there are several steps that business leaders will want to take to streamline approval and aid in swift onboarding. Start by establishing an internal relationship owner, followed by a thorough security assessment.
Negotiate pricing and terms with the selected vendor and approve an annual budget. It is also important to review compliance requirements to prevent future legal problems. Finally, review and sign the contract. Once all paperwork has been signed and budgets have been approved, a business can begin to roll out the new application.
Tips For Effective SaaS Vendor Management
While SaaS vendor management may not look exactly the same for every business, there are some tips that can help most businesses leverage this technology:
Maintain Consistent Ownership Of All Vendors
Most employees have the ability to procure SaaS applications without prior approval from their IT department. This often results in redundancies in tools, leading to wasted time and money. It is important to maintain consistent ownership and inventory of all vendors to prevent these types of problems. This allows departments to retrieve information about each software product to prevent unnecessary future purchases.
Keep Track Of Upcoming Renewals
When businesses are managing multiple vendors simultaneously, it can be difficult to keep track of when new renewals are scheduled to occur. One small error could result in the termination of a contract, potentially causing disruption to business operations. Other issues can also occur, such as a free software product suddenly becoming a paid product, resulting in the business being billed unexpectedly. SaaS vendor management allows businesses to effectively manage contracts and renewals in one system.
Perform Regular SaaS Vendor Management Audits
Investing in a SaaS vendor management platform not only helps businesses create SaaS visibility but can also aid in governance. Establishing a quality IT governance plan is essential for establishing authority. It is also important to perform regular SaaS audits, which should ideally be done on a quarterly basis or twice a year. When performing these audits, speak with end-users to determine what applications are being used daily, which are considered redundant and if there are free tools available to replace paid ones.
Remember To Remain In Compliance
It can be difficult to maintain compliance when managing multiple applications. However, all apps used by a business must meet certain industry standards to avoid hefty penalties and other serious risks. SaaS vendor management solutions allow businesses to effectively manage multiple vendors in one place. This centralized platform can also help delegate responsibilities, including registration, and keep records up-to-date for compliance purposes. SaaS vendor management can help lessen administrative burdens.
Continue To Track SaaS Usage
One useful practice that is often overlooked involves tracking SaaS usage over time. Businesses can gain useful insight into their existing SaaS applications and determine if they provide value, or if they are unnecessary expenses. SaaS vendor management can also help companies determine how many licenses they need and if there are additional software features that are unnecessary which could give them an upper hand in pricing negotiations.
Automate Manual, Time-Consuming Tasks
Investing in a complete SaaS vendor management system can help automate a wide range of tasks. For example, it could be used to detect SaaS stacks by dollar or department, ensure the optimization of contract spending at renewals, monitor contract renewal and termination dates and clean up license utilization. It can also aid in vendor compliance to avoid cybersecurity risks such as data breaches.
Speak With The Custom Software Developers At Orases
Developing an effective SaaS vendor management solution will help organizations facilitate ongoing tasks and allow for continuous improvements via SaaS optimization. SaaS vendor management will also provide visibility for SaaS purchases, reduce security risks, avoid wasteful SaaS spending and improve overall operational efficiency. To learn more about how to develop an effective SaaS vendor management solution or to speak with an experienced SaaS development expert, contact Orases online today.