Effectively managing SaaS vendors is crucial for long-term business growth and cost-saving. However, it can be a difficult task to accomplish.
Businesses are adopting new technologies as they grow in this fast-paced environment, and managing software-as-a-service (SaaS) vendors has become a major priority for businesses. However, handling multiple vendors simultaneously can be difficult without SaaS vendor management software.
SaaS vendor management refers to a company's activities and initiatives to maintain healthy vendor relationships. It comprises various initiatives like constant communication, defining vendor contracts, negotiating terms, and nurturing supplier relationships.
Learn more about the SaaS vendor management best practices in this exciting read. You’ll get to know the importance of managing SaaS vendors and how to effectively do it using vendor management software.
Why is managing SaaS vendors necessary?
SaaS vendor management can be very advantageous for businesses looking to manage the increasing number of vendor relationships strategically.
The primary purpose of vendor management is to maximize the potential of the company's application portfolio, all while keeping the costs and relationship with the vendor in check.
As the use of SaaS solutions grows, so does the threat of security breaches. Organizations can reduce risks, such as compliance and data security risks associated with using SaaS solutions, by managing their SaaS vendors well.
The ultimate goal of vendor management is to enable organizations to make good decisions about their SaaS investments and get the best possible results from those IT solutions.
7 SaaS Vendor Management Best practices for 2023
Now that we've established the importance of SaaS Vendor Management for businesses let's look at some of the best practices for implementing your own Vendor Management system.
Emphasize selecting the right vendor
It is critical to choose the right vendor because your company will benefit most from vendors who are experts in your specific industry.
The ability of the vendor to provide dependable, high-performing software that satisfies the organization’s needs directly affects the quality of a SaaS solution. Hence, it is essential to invest in the smart procurement of vendors, as it facilitates the creation of long-term, mutually beneficial relationships that yield positive returns over time.
Centralize your vendors and vendor contracts
When vendor contracts are not centralized, there is a high risk of contract duplication, which can result in complications.
Organizations may miss out on opportunities to negotiate better terms and pricing with vendors due to the absence of tracking and managing vendor contracts, which can lead to higher costs and compliance issues.
Therefore, it is always better to have a vendor contract management system to get a full view of the vendor base by keeping a total record of interactions and current contracts in one easily accessible location.
Interact and nurture vendor relationships
Vendor relationship management is an essential aspect of SaaS vendor management. Open communication with vendors fosters strong relationships, which leads to smooth operations and improved conflict resolution.
Nurturing these relationships can result in new ideas and innovations that can help drive business growth, better understand business needs and preferences, and improve collaboration.
Additionally, it can strengthen a company's standing as a dependable and trustworthy partner.
Effectively track and keep control of your vendor spend
Optimization of costs is necessary for business growth. Determining which vendors are adding value and which can be replaced or eliminated can be tedious.
If improperly managed, it has the potential to increase short-term costs for the business. Through vendor contract management systems, businesses can cut costs by negotiating contracts, establishing performance criteria, and tracking vendor performance.
You can track app usage data using a VMS and renegotiate with vendors to opt for usage-based pricing plans to save on SaaS spending.
Create a streamlined procurement process using workflows
Automation and standardization can fasten the evaluation and segmentation of vendors. Workflows ensure that the procurement process is consistent across the organization, reducing compliance risks and future errors.
Enforcing workflows for IT vendor management in the procurement process can help an organization function smoothly, with less manual labor and better efficiency.
Manual procurement processes can lead to lapses, frustrating vendors, and poor vendor relationships. By streamlining the procurement process using workflows, you can accelerate the process, improve communication, and enhance vendor relationships.
Use a SaaS vendor management tool
A spreadsheet is not good enough to handle vendors. Employ vendor management services to systematize your vendor contract management process and get the most out of it, from managing renewals to negotiating prices.
A SaaS vendor management platform can deliver crucial data-driven insights into vendor spend, performance, and value, which enables businesses to make strategic decisions about vendor relationships and future investments.
Without a SaaS vendor management tool, centralized management of all your SaaS vendors, tracking your spending on each vendor, and maintaining a consistent relationship with them will seem impossible.
Check out this exciting success story from Iffi Wahla, the co-founder and CEO of Edge. He recalls how CloudEagle made vendor management easier for his team.
Track vendor performance and evaluate KPIs
Sometimes organizations completely neglect their SaaS providers after procurement and onboarding.
It is critical to establish key performance indicators (KPIs) early in the process and to monitor and track these indicators to ensure that the solutions are impactful for the business.
Some of these KPIs can include invoice and purchase order accuracy, vendor defect rate, obligation fulfillment rate, competitiveness within the market, etc. Businesses that want to enhance results and get the most out of contracts should review vendors regularly.
Simplify SaaS vendor management with CloudEagle
CloudEagle is a comprehensive SaaS management platform that helps organizations streamline vendor management process and manage their SaaS vendors efficiently.
With CloudEagle, you can:
- View vendor-related information from a single dashboard, including contracts and sensitive documents, usage data, and vendor spend.
- Perform detailed vendor research, read relevant reviews, and communicate with vendors and their respective customers.
- Get Assisted buying and price benchmarking data for effective vendor negotiations and pre-negotiated vendor discounts.
- Identify app usage and renegotiate with vendors to optimize spending.
- Get accurate spending data on each vendor to make the right spend management decisions.
- Create custom reports on app usage, vendor spending, and department-level spending as per custom periods.
- Onboard and offboard new employees in an instant, and much more.
A vendor contract management system is an essential investment for businesses looking to streamline operations, enhance vendor relationships, and save on SaaS spending.
Managing a plethora of SaaS vendors can be challenging, but with a vendor management system in place, it can significantly benefit an organization in the long run.
This article lists IT vendor management best practices and vendor relationship management best practices to manage SaaS vendors effectively. Follow these practices to manage SaaS providers efficiently and get the most out of vendor-buyer relationships.
But the critical factor is to use vendor management software, and we showed you why CloudEagle is the right solution for you,
So, what are you waiting for?
Book a demo with our experts to learn how a SaaS management platform can benefit you.
1. What is a vendor management system?
A vendor management system is a solution that helps manage vendor relationships, streamlines the procurement process, and optimizes vendor-related spending for businesses.
2. Why is proper management of SaaS solutions necessary?
Appropriate management of SaaS solutions is essential to reduce risks and ensure that businesses can maximize the benefits of their SaaS solutions while lowering any related costs and risks.
3. Why is it essential to use a vendor management platform?
Spreadsheets can be helpful for specific tasks, but managing SaaS vendors needs an all-inclusive solution. A vendor management service can help businesses organize and optimize their vendor management process.
These platforms can handle tasks such as managing renewals and negotiating prices, saving businesses valuable time and resources.