One of the fastest-growing spend categories for companies is the “things” they subscribe to — namely, SaaS applications.
Worldwide spending on cloud services is growing 23% and SaaS (software as a service) tools are the largest market segment, driven by the shift to subscription-based business models, per Gartner.
Chief operating officers (COOs) have a unique view of their company’s financials, strategies, investments, and the responsibility to drive execution excellence. They often are the first to feel the pain, identify the problem, and face an array of challenges from ensuring day-to-day operations run smoothly to finding efficiencies and cost savings.
A paramount concern should be managing a company’s software spending. It can easily get out of control, zapping your company’s efficiency. Enter SaaS spend management solutions.
From cost savings to increased security, the benefits of SaaS spend management solutions are invaluable. Let’s dive into why every COO should consider implementing it.
Comprehensive Visibility into Spend Categories
One of the top advantages of a SaaS spend management solution is its ability to offer an eagle-eye view of all software expenses.
Gone are the days of manual tracking through spreadsheets or disparate systems. COOs can gain real-time insights into their company’s SaaS subscriptions, usage patterns, and overall expenditure. This centralized perspective is invaluable for prompt decision-making and staying ahead of financial discrepancies.
Cost Savings Through Optimization
It’s a common scenario when a company pays for a SaaS tool that is underutilized or not used at all. Such inefficiencies add up, bleeding resources that could have been allocated elsewhere.
Spend management solutions can help identify this waste. By understanding which tools are redundant or not delivering value, COOs can make informed decisions on subscription renewals, consolidations, or terminations, thereby achieving significant cost savings.
Improved Budgeting and Forecasting
With a clearer understanding of current SaaS expenses and usage patterns, COOs are better positioned to predict future costs.
Spend management solutions can help forecast based on historical data, upcoming renewals, and changing business needs. This foresight is critical in generating accurate budgets and aligning them with the company’s strategic goals.
Enhanced Compliance and Security
SaaS subscriptions, especially those procured outside the purview of IT (shadow IT), can pose security risks. Unauthorized or redundant tools can create vulnerabilities, leading to potential breaches or non-compliance with industry regulations.
A SaaS spend management solution shines a light on these potential pitfalls. By maintaining a record of all subscriptions, COOs can collaborate with IT teams to ensure that only vetted and secure applications are in use.
Streamlined Vendor Management
Managing relationships with multiple SaaS vendors can be daunting since the process demands considerable time and effort.
Spend management tools simplify this by acting as a centralized hub for financial contraction interactions. COOs can easily track contract terms and renewal dates, and negotiate better deals based on aggregated usage and spend data.
Empowering Teams with the Right Tools
A crucial part of operational efficiency is ensuring that teams have access to the tools they need to succeed. By analyzing the actual usage and impact of various SaaS tools, COOs can discern which software brings tangible benefits. This can lead to strategic investments in tools that amplify productivity and foster innovation.
Scalability for Growth
As companies expand, their SaaS landscape becomes more complex.
Onboarding more employees often means adding more subscriptions, and without a robust management system, this can quickly spiral out of control. IT managers must manually provision and/or deprovision new, current, and exiting employees, taking valuable time that could be spent on more important and strategic IT-related matters.
Spend management solutions are inherently scalable as well as automated. They adapt to the growing needs of businesses, ensuring that even as the software stack expands, everything remains visible, manageable, and optimized.
As businesses lean heavily on SaaS solutions for their operational needs, the importance of effective spend management cannot be overstated. COOs, as custodians of operational efficiency, stand to benefit immensely from these tools.
Whether it’s unearthing cost-saving opportunities, ensuring compliance, or making strategic software investments, a SaaS spend management solution should be an important asset in your company’s business toolkit.