WHAT IS A SaaS PROCUREMENT TOOL?
A SaaS procurement tool is a solution-oriented software designed to automate and centralise the entire process of buying and managing Software-as-a-Service (SaaS) applications. In today’s fast-growing business world, companies utilise a vast array of SaaS tools for various purposes, including communication and project management, as well as finance and human resources. In short, a SaaS procurement tool takes a manual process that is scattered and turns it into a proactive, data-driven and highly efficient process.
WHY PROCUREMENT AND CONTRACT MANAGEMENT TOOLS ARE MERGING IN MODERN SaaS TOOLS?
Traditionally, within an organisation, procurement and contract management were handled as separate units, often by different teams. This was a result of a manual paper-based workflow, and it focused on specialised roles.
Procurement (Pre-Award process):
The team assigned to procurement primarily acquired goods and services. The responsibilities of the team were tactical and focused on the transactional steps that would lead to the final purchase. This process was often managed through emails, phone calls and spreadsheets, with physical copies of invoices.
Contract Management (Post Award):
Once the procurement process is done, the legal department takes over, or a specialised contract team takes over. The focus of these teams would be on the long-term, legal, and performance aspects of the signed contract.
Problems with this Traditional Separation:
The varying work nature of this strategy caused various issues:
Lack of Visibility
The value assessment process of a vendor post-signing of a contract would become
challenging, as the procurement team would lose sight of a contract’s performance.
Lost Chances
The contract team may not be given complete information about the initial negotiation,
leaving them somewhat handicapped in being able to renegotiate terms properly.
Waste of Money
Lacking real-time awareness of usage and renewals, businesses would still be paying
for unused software or auto-renew at unfavourable terms.
Why They’re Merging
SaaS Sprawled and Centralised Visibility
Companies used tens and hundreds of different SaaS applications. Without central oversight, employees from different departments buy software, leading to “SaaS Sprawl”.
The Procurement-to-Renewal Lifestyle
The act of procuring a SaaS is a continuous cycle and not a one-time event. It begins with procurement and ends with contract renewal.
Cost Savings and Financial Optimisation
The biggest financial risks are tied to contracts like missed renewal deadlines or renewals at high prices. Visibility gives teams time to evaluate usage and right-size their licenses.
WHAT TO LOOK FOR IN A SaaS PROCUREMENT TOOL WITH CONTRACT MANAGEMENT?
When you are evaluating a SaaS procurement tool with built-in contract management, you are looking for a solution that, without any hassle, seamlessly integrates two core functions into a single unit. The visibility and control needed to manage your entire software stack efficiently, the right tool is needed that will manage the buying process as well.
Here’s what to look for:
- Centralised Contract Repository: The tool should ensure everyone is working from the same source of truth. Now this is achievable when the tool’s most important feature is to be a secure database where all SaaS contracts, licenses and vendor information are stored.
- Automated Renewal Alerts: There should be a feature included where the system sends an automated, customised notification regarding the renewal date of the contract. The employee should set up multiple alerts to the same.
- E-Signature Integration: To speed up the contract execution process, seamless integration is done with major e-signature providers like Adobe Sign, etc.
- Security and Compliance: The system or platform itself should adhere to high security standards, such as SOC 2 and ISO 27001, to protect sensitive information, contracts, and vendor data.
- Automated Purchase Request: There should be an intuitive interface that allows employees to request new software. Compliance and Risk Management tools should help ensure that the SaaS applications and contracts follow security protocols and regulatory requirements.
- AI-powered Analytics and Insights: The platform should provide data-driven insights that help monitor potential risks, track vendor performance, and assist against several agreement issues.
- Contract Lifecycle Management (CLM): The software should have tools that will monitor the complete lifecycle of a contract, starting from initiation to negotiation to invoicing and renewal. This involves accurate data flow version control, approvals, workflows, etc.
- Integration Capabilities: The software should have tools that will seamlessly integrate with existing systems, such as ERP (Enterprise Resource Planning). This ensures real-time data synchronisation and a unified workflow.
- Vendor and Supplier Management: A system of a centralised database for all SaaS vendors is important. The tool should also allow for tracking vendor performance, managing relationships, and storing all relevant vendor information in one place.
- Data Analytics: Look for advanced analytics tools that provide visibility into SaaS usage and spend. This helps to identify cost-saving opportunities, track spending patterns and optimise renewals.
- Workflow Automation: Ensure the platform has automation capabilities that include purchase order approvals and vendor onboarding, and links invoice processing. This feature reduces repetitive tasks and increases efficiency.
Modern Businesses need modern solutions like an ideal SaaS procurement tool with built-in contract management.The whole process is streamlined and centralised from initial vendor selection to contract renewal.One should look for key procurement feature that include automated workflows, comprehensive spend analysis to identify cost savings opportunities as such and also robust vendor management capabilities to track performance and relationships.For seamless operations integration with existing business systems like ERP and CRM is also necessary.
On the other that is contract management secure, centralised and repository tools should be provided for all agreements and for eliminating scattered data. A window for negotiation is provided through a very important feature of automated alerts for upcoming renewals, that help prevent costly auto-renewals.
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