Entering into a business relationship with a Software-as-a-Service (SaaS) vendor involves more than just cloud storage and data processing. SaaS vendors offer a plethora of innovative business and cloud solutions that meet the unique needs of modern businesses.
Today, countless companies rely on third-party vendors to help them adjust to unprecedented pandemic conditions and keep up with accelerated digital transformation. With SaaS vendor management, organizations are better equipped to manage vendor and supplier relationships.
What Is SaaS Vendor Management?
In simple terms, SaaS vendor management means finding and managing the SaaS vendors that best suit the needs of a business. There are many aspects involved in SaaS vendor management, such as negotiating contract agreements, mitigating vendors’ risk and developing business relationships that result in favorable terms at application renewal. The primary goal is to find the best IT solution for every organization, report on value and optimize spending.
While it is not always possible to manage every aspect of an IT department in the cloud, vendor management is one area that can be managed and maintained virtually. SaaS vendor management gives businesses complete control over the entire vendor lifecycle, from approval and onboarding to pricing and renewal. Vendor management software tools provide business leaders with a comprehensive overview of vendor spending, cloud usage, products and so much more.
Core Responsibilities Of A SaaS Vendor Manager
SaaS vendor management provides IT leaders with a variety of tools to work effectively in a modern business environment. Core responsibilities of a SaaS vendor manager include:
Selection Of Vendors
While the market is flooded with SaaS applications, choosing one that best meets a business’s unique needs can be difficult. IT teams are often tasked with selecting qualified vendors that fit the company’s budget and goals.
Negotiation Of Contracts
Regardless of business size, it is critical to keep costs in check. SaaS vendor management involves negotiating prices and preventing overspending.
After a contract has been signed by a vendor, the vendor onboarding process begins.
One of the most important responsibilities of vendor management involves maintaining a relationship with the chosen vendor. This involves clear communication and ongoing collaboration.
It is important for businesses to be current with invoicing and payments to avoid disruption to service. Software services may need to be renewed annually.
Reasons That Businesses Need SaaS Vendor Management
Making the decision to invest in SaaS vendor management is not always easy. There is no one right solution for every business, and strategies may need to be adjusted over time. Despite the obstacles that some businesses may encounter, SaaS vendor management can be invaluable for enterprises that aim to successfully manage their growing number of vendor and supplier relationships. Here are a few reasons why SaaS vendor management is important to business owners:
1. Increase Visibility Of Software Purchases
Organizations that sell products or services to other businesses want to ensure the purchase process is as simple as possible. However, it is common for subscriptions to add up in different departments across a business. This can result in redundancies that ultimately waste money and resources.
With SaaS vendor management, businesses can better manage software costs and cut back on subscriptions that are not needed. In addition, all employee expense information can be conveniently managed in one place.
2. Enhance Cyber Security
No business is ever fully protected from cybersecurity risks. Sensitive company information can fall into the wrong hands, putting the business at risk for distributed denial-of-service (DDoS) attacks and phishing scams.
With a solid SaaS vendor management plan in place, businesses can gather all of their applications on a centralized platform. Business leaders can then see who is making software purchases and train employees with best practices to keep sensitive information secure.
3. Avoid Wasted Money From Duplicate Tools
It can be frustrating to invest in a new software tool only to find that the same tool is already available. Businesses can waste a significant amount of money when they purchase multiple tools that perform the same functions; comprehensive vendor management tools can be used across many departments to avoid redundant subscriptions.
SaaS vendor management enables companies to see where they are experiencing overlaps in functionalities so that they can take the necessary steps to cut costs and save money.
4. Improve The Vendor Renewal Policy
Businesses often struggle to keep up with application renewals and may overlook an important renewal, resulting in a disruption to normal operations. SaaS vendor management makes it easy to keep up with renewals while providing business leaders with ample time to negotiate on contracts.
SaaS vendor management shows upcoming software renewals from the least to most expensive, allowing business leaders to assess their overall budget and determine if the tools are still a good investment.
5. Reduce Operational Burdens That Waste Time
It can be difficult to identify time- and cost-saving opportunities without access to a real-time analysis of business transactions processed for each application. SaaS vendor management can help reduce these types of operational burdens to save time and allow business leaders to focus on core activities that help grow the company.
For example, SaaS vendor management can help businesses uncover the most unused applications which they can then choose to keep or eliminate for cost savings.
Tips To Prioritize SaaS Vendor Management In 2022
The reliance on vendors has increased dramatically since the start of the pandemic, ultimately changing the landscape for vendors and the businesses that hire them. Today’s teams are trying to maintain a productive balance between working in the office and working from home.
In turn, the vendor management process has gone digital to allow businesses to effectively select, negotiate with, pay and manage vendors from any location. Prioritize SaaS vendor management in the upcoming months with these tips:
Establish An Effective Company Buying Process
Many businesses fail to develop a clear buying process for new tools and applications. With no buying process in place, many businesses find that they purchase tools without performing the proper research to ensure a good return on investment.
This can result in redundant tools and wasted money. Develop a formal buying process that outlines how to request new software, what vendors to work with, important legal and security guidelines, contract agreements and smart pricing negotiating practices.
Remain Consistent With Ownership Of Vendor Relationships
Between 10 and 15 percent of a company’s technology stack does not have a clear owner or contract, according to G2 Track Resources. It is common for vendor agreements and software contractors to be owned by multiple team leaders across a business when carrying out SaaS vendor management processes.
However, this distribution of ownership can result in underused applications and unnecessary costs. Keep track of who is owning each vendor relationship and aim to combine them to achieve fewer owners whenever possible.
Set Clear Expectations With New And Current Vendors
Whether a business is looking for new vendors or wants to improve its relationship with current vendors, it is important to make expectations clear on both sides. Ensure that the vendor or supplier has provided clear expectations in terms of services and pay schedule and do the same in return. Ensure that these expectations have been expressed both verbally and in writing so there are no misunderstandings or errors.
Audit Software And Applications Regularly For Effectiveness
An important component of SaaS vendor management involves regularly auditing software and applications to ensure that they are remaining useful and cost-effective. On a routine basis, usually quarterly or twice a year, gather team leaders to audit the software and applications purchased by the business.
Ask important questions about these tools, such as which are being used daily, which are considered redundant, which paid subscriptions are not being utilized and if any free tools can replace paid ones.
Measure Efficiency Of Vendors To Achieve The Best Value
Many businesses are resistant to change once they become comfortable with a certain vendor; however, many companies will find that they can save a significant amount of money by changing their vendors as the business grows. New vendors are constantly arising that may offer better services or provide better value for the money. Work with a team to compare vendors and find where the business can save without sacrificing quality.
Ensure Compliance by Meeting Industry Standards
When addressing SaaS vendor management, one important area that is often overlooked by businesses is compliance. Every application that the business uses must meet certain industry standards; this can be complex when using multiple vendors. Managing all vendors in one place can help streamline the process and lessen the administrative burden on IT teams.
Use A Comprehensive SaaS Vendor Management Platform
Performing vendor management tasks manually can be a time-consuming endeavor. Consider using a complete SaaS vendor management platform that can automate a wide range of tasks, such as monitoring contract renewal dates, detecting SaaS stacks by department, ensuring optimization of contract spend at renewal and ensuring vendor compliance to protect against data breaches. This information is neatly displayed on a seamless dashboard that makes it easy to manage vendor relationships.
Get In Touch With The Experts At Orases To Learn More
SaaS vendor management makes it simple for businesses to automate, centralize and consolidate a wide range of processes to help grow an organization. Software-as-a-Service solutions represent a change from traditional on-premise software models in which an organization is responsible for the integration, maintenance and operation of the solution. SaaS vendor management software gives businesses more control over all aspects of vendor management. For more information or to get started, speak with the custom software development professionals at Orases today.