Control your spend before it happens and say goodbye to the “spend now, ask forgiveness later” culture. Having an automated spend management platform...
How much SaaS licensing is being unused in your business?
3 tips on how a business spend management tool in your organization can help find opportunities from your current SaaS licensing spend and drive value.
Proactive Business Spend Management goes far beyond accounts payables and receivables. It is a comprehensive approach that tracks, measures, analyses and corrects all business spend. A simple search on the internet for “How much SaaS licensing goes unused” can pop up many articles that provide a staggering figure ranging from 30% - 50%. It is probably no surprise then, that managing cloud spend was voted the number one priority for 82% businesses, across all business types, ranging from enterprise to SMB.
So the question is, how do you evaluate how much SaaS licensing is going to waste in your business and how can ProSpend help?
Here are my top 3 tips on how utilizing a business spend management tool, such as ProSpend, in your organization can help you find opportunities from your current SaaS licensing spend to ensure you drive value from your IT Budget.1. Look for consumption based SaaS solutions
ProSpend is a typical example of a SaaS solution which uses a pricing model based on consumption rather than fixed licensing which in plain speak means you only pay for what you use.
Let’s take a look at how consumption based pricing works for each;
Our expense management, purchasing and budget management solutions are based on active users only, so you may have 60 people in the organization who incur expenses throughout the year but not all 60 do that each month, the figure could be as low as 10 or 15 which means only those that use the platform during that months billing cycle will be charged. The same goes for those who require to raise ad hoc purchases, you only pay for the user that raises a PO in that particular month.
Accounts payable and eInvoicing is slightly different as this depends on the number of AP Bills received into the finance function each month, as this figure can vary from month to month it is only fair to be charged for what you received.
Finally, for virtual cards the consumption billing is based on each transaction and the dollars spent.
In summary software vendors that use consumption based pricing provides you with the knowledge that you are not paying for any unused licenses.2. Do not separate SaaS licensing – consolidate it
It is so often the case that procurement of software is not a top down approach. It’s usually a mixture of a bottom up approach whereby department heads go outside the overall business IT strategy to find solutions required by their team; be it marketing, support, sales, project managers the list goes on.
This is where the finance and IT departments need to work together to ensure that all IT spend is consolidated to simplify the review process. In this scenario the IT department can allow a dual strategy and separate which SaaS products fall into the top down approach and which SaaS solutions can be decided in a bottom up approach but working with finance to consolidate SaaS licensing costs.
Our customers at ProSpend have found a smart way to consolidate their SaaS licensing by utilizing our virtual cards. Rather than having their SaaS licensing sitting on a mixture of various corporate cards, personal cards, direct bank debits or periodic invoicing, they have set up an independent virtual card to manage all subscriptions.
This makes it an easier process to periodically review their SaaS spend and to reconcile this spend against any changes in the business; such as changes to headcount or a new IT solution that has been introduced into the business to replace a solution that has now become redundant.3. Recover your time to drive improvements
ProSpend helps both your finance team and those involved in working with finance by recovering time through automation and streamlining processes. This reduces the administration involved in getting data into a system, moving data to the correct people for approval, processing the data for payment and simplifying the reporting activities back to the business.
Reducing the time spent on doing the ‘bad’ stuff does not necessarily mean reduced hours or reducing the number of employees. ProSpend is designed to promote people to go on and do the good stuff in the business such as giving them time to review and analyze data to allow them to make better business decisions to increase profitability.
This could be as simple as understanding procurement leakage such as unused SaaS licensing allowing the business to cut any unnecessary cost quickly. Apparently there is a lot of it around!
Get in touch with us and let’s talk about how we can help you with not only your SaaS licensing but all of your business spend. I am sure we can help you make a difference.
Who am I?
I am Carl Brooks, Partnerships Manager at ProSpend. I come with 20+ years of ERP and CRM experience spanning over BAAN, Exact, MYOB and KPMG Wiise. Over the years I have held various positions from support, consulting, partner enablement and running ecosystems. Early in my career, I spent 4 years in the finance function of a major military defense company and have seen all sorts of bad practices around AP and procurement. I am passionate about making things easier and simpler and the role technology has to play in providing these outcomes; and can articulate how tech solves these problems in a plain and straightforward way. Outside of work my 3 children and many pets keep me busy but when I have some free time my go to passion is music.