SaaS Procurement: A Complete Guide


Given that the cloud is ruling the software era, it is evident that moving forward; every technology will be offered in Software as a Service form. Nowadays, purchasing software is no longer as time-consuming and expensive as it was. And you don't have to be an expert in procurement to accomplish it.

On-premises software used to have a single buyer, i.e. a centralised IT team who handled all of the transactions. Every employee that uses SaaS is a customer. SaaS is so simple to buy that all it takes to get started utilising the programme is a credit card swipe.

What is SaaS Procurement?

SaaS procurement is an acquiring software that is delivered and accessed over the internet rather than installed on a local computer or server. With SaaS, users pay a subscription fee to access the software rather than purchasing a license outright.

In SaaS procurement, the organization seeking to use the software will typically research and evaluate different options, negotiate terms and pricing with the vendor, and then purchase a subscription. This process may involve input and approval from multiple departments or stakeholders, such as IT, finance, and procurement.

The Need for SaaS Procurement

In today’s dynamic environment, efficiency is the key to creating a competitive advantage. Long are the days gone when people rely on processes that take forever to achieve a goal. With the technology-influenced market, every team needs some kind of software to produce desired results effectively.

Before the advent of the SaaS model, procurement teams served as the go-to authorities for assessing the effectiveness of the purchase process and communicating the results to internal stakeholders for project implementation. The SaaS model required procurement teams to reorganise to keep up with technological advancement and business requirements.

With so many tools, subscriptions, and vendors available, buyers now have the advantage over sellers. Gartner claims that while procurement software as a service aimed to improve product quality, it gradually evolved into a necessary transition for several departments and wholly altered the buyer's experience.

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SaaS Procurement Process

The SaaS procurement process involves several steps, including:

  • Identifying business needs:

    The first step in the SaaS procurement process is to identify the specific business needs that the software will address. This may involve analyzing current processes, identifying areas for improvement, and determining the features and capabilities that are necessary for the software to meet the organization's needs.
  • Researching options:

    Once the business needs have been identified, the next step is to research and compare different SaaS options to find the best fit for the organization. This may involve evaluating the software's features and capabilities, as well as its pricing and support options.
  • Requesting proposals:

    After identifying potential software options, the next step is to request proposals from the vendors. This typically involves filling out a request for proposal (RFP) form that outlines the organization's specific needs and requirements and any questions or concerns they may have.
  • Evaluating proposals:

    Once proposals have been received, the organization will review and compare them to determine which vendor offers the best solution. This may involve evaluating the software's features and capabilities, as well as its pricing and support options.
  • Negotiating terms:

    Once a vendor has been selected, the next step is to negotiate the terms of the agreement. This may include negotiating pricing, payment terms, and other relevant terms or conditions to the organization.
  • Payment:

    The purchase order, packaging slips, and vendor invoices are compared in three ways to see if there are any inconsistencies. If everything seems reasonable, the finance division then processes the payment. And finally, when the transaction is done, the finance records the transaction.
  • Implementing the software:

    After the agreement has been finalized, the next step is to implement the software. This may involve setting up user accounts, training employees to use the software, and integrating it with other systems and processes.
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Benefits of SaaS Procurement

SaaS procurement offers organizations a cost-effective, scalable, and flexible way to access the software applications they need to support their business objectives. Here are some of the benefits of SaaS procurement:

  • Cost savings:

    With SaaS procurement, organizations can reduce their upfront costs by paying for software on a subscription basis rather than purchasing licenses for each user.
  • Scalability:

    SaaS procurement allows organizations to quickly scale up or down their software usage as needed without investing in additional hardware or IT staff.
  • Flexibility:

    SaaS procurement enables teams to access software from any device with an internet connection, making it easier for employees to collaborate and work remotely.
  • Security:

  • Leading SaaS providers to have robust security measures to protect data and prevent breaches, making it a secure option for storing and processing sensitive information.
  • Innovation:

    With SaaS procurement, organizations can quickly and easily access the latest software updates and features, allowing them to stay competitive and innovative in a rapidly changing business environment.
  • Easy Upgrades:

    You do not need to download or install any upgrades, patches, or updates in SaaS platforms. SaaS services oversee your complete IT stack as well as any necessary developments such as adding users, changing feature settings, adding new modules, and so on.

Best Practices in SaaS Procurement

Sticking to a tried-and-true plan is crucial if you want to go through a SaaS procurement process smoothly. The following SaaS procurement best practices will assist you in reducing errors, spotting chances for savings, getting rid of irresponsible spending, and enforcing rules.

  1. Set Goals and Objectives

    It is essential to match your SaaS procurement strategy with your corporate objectives. Jot down every prospective business issue, goal, or scenario with the help of cross-functional teams and intradepartmental inputs. You need to listen to the concerns of the finance department, procurement teams, and other stakeholders before looking for software. Once you have specific goals to overcome issues, you can communicate these with your service providers.

  2. Research and Compare Options

    It's essential to research and compare different SaaS options to find the best fit for the organization. This may involve evaluating the software's features and capabilities, as well as its pricing and support options. You can also request proposals from vendors, as this allows organizations to compare different options and determine which vendor offers the best solution. Explore Top 5 procurement software.

  3. Right-Size Memberships

    Many organizations roughly estimate the need for the software and fail to acknowledge the reality. Eventually, they end up buying fewer or more licenses than they need. Buying more licenses means you will have to pay needlessly, and buying fewer means frustrating employees. Regularly assess your SaaS stack, so you can focus on the capabilities and features you desire at less expensive pricing.

  4. Terms and Conditions

    Before finalizing agreements with any SaaS solution providers, thoroughly read the terms and conditions. Each and every provision governs how software end users may access and use it, including those governing subscription basis, cost, upgrades, and renewals. It's essential to establish clear terms and conditions in the SaaS agreement is essential to ensure that the organization's interests are protected. This may include provisions related to security, data privacy, support, and other vital issues.

  5. Try it out first

    To be sure the procurement software is right for you, take advantage of free software trials. The degree of functionality must be in line with the scale of the businesses. You can also book a free demo call to learn more about what SaaS procurement offers and how it can resonate with your business needs.

Things to Look for in SaaS Procurement

When looking for the ideal SaaS Procurement for your business, make sure you follow this SaaS procurement checklist:

  1. User-Friendly Processes

    Training your workforce should be simple. Look for SaaS solutions that are user-friendly and straightforward tools. Everyone will find it frustrating to discover that they need help with any steps in the procedure. They'll have to keep asking for assistance, and the business will waste time ensuring everyone is adequately trained. Processes must be simple to execute, and action items should be easily assigned to any or all people involved.

  2. Real-Time Updates

    Every SaaS procurement should have provided updated information by smoothly collecting data from your existing software. Although one of the many qualities of SaaS is that it updates the data in real time, you should always confirm with the provider that different data points of your businesses can be easily integrated into the procured SaaS platform. This will help you make informed and timely decisions.

  3. Mobile Access

    Your company needs to be ready for remote work outside the office in the modern, flexible workplace where individuals can work from home or remotely for any number of hours. Even if your company still needs to be set up to allow for remote work, it's best to be ready if it does. You must ensure that the SaaS procurement you select has mobile device remote access capabilities for everyone in the business with permission-based access.

In a Nutshell

Overall, the SaaS procurement process involves carefully evaluating the business needs, researching and comparing different software options, negotiating terms with the chosen vendor, and implementing the software to support the organization's business objectives.

SaaS procurement can provide many benefits for organizations, including lower upfront costs, flexible subscription options, and the ability to scale up or down as needed. However, it is essential to carefully evaluate the features and capabilities of the software, as well as the vendor's track record and terms of service, before committing to a subscription.

If you are looking for a procurement SaaS solution, Kissflow Procurement Cloud offers all the essential services for SMBs and large corporations. The software is simple to use and takes less than four weeks to deploy because of its low-code platform. Additionally, it is more affordable than the alternatives. To find out more about Kissflow Procurement Cloud, register for a free demo.

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