Procurement teams play a vital role in an organization. They act as a conduit between the internal teams and external product vendors, facilitating the purchase of key products, including strategic SaaS applications required to make employees more productive.
However, their role extends beyond mere purchases. SaaS procurement requires a nuanced understanding of business needs, vendor competitive landscapes, intricate pricing models, and evolving software license counts.
Many organizations have lean teams and don't have the bandwidth to focus on the 300+ SaaS apps a typical 200-employee company has. Sometimes, these procurement teams are not IT experts or do not have SaaS buying experience.
Navigating these complexities alongside the procurement process can overwhelm teams. This is why organizations outsource their SaaS buying processes to experts like CloudEagle.
A typical procurement professional will deal with a software vendor once a year, whereas SMEs like CloudEagle interact with this vendor weekly due to the frequency of their customer's use of the vendor's services.
Outsourcing will save time for your team, increase their productivity, and allow them to focus on their core strategic tasks that increase your revenue. This article will detail the challenges in-house teams face and why outsourcing SaaS procurement is the right choice.
Challenges of in-house procurement
1. Lack of usage insights
When a user raises a purchase request, a procurement team must understand the requirement and how the product will help the team achieve its goals.
Let's say your marketing team wants to purchase a new application with 20 seats. But hold on! Before purchasing those licenses, you need to figure out if they're fully using the licenses they already have for other software.
But how do you get this usage information? Employee surveys aren’t the best way to collect user adoption and usage patterns.
Your team has to spend hours and hours asking every user how they’re using the product and visiting each application to analyze the actual usage of licenses. A time-consuming and tedious task.
This is a major challenge for procurement teams in most organizations. Why subject your team to such challenges when a tool like CloudEagle can analyze usage data and guide your team in making informed purchase decisions?
2. Lack of benchmarking data
In most cases, we noticed a common aspect in our customer research: most customers wondered if they were overpaying. To figure it out, they relied on small datasets and often sought advice from friends.
They weren’t aware of how much their peers paid for the same product; these organizations were mostly paying more than the market price as they lacked benchmarking data to verify and justify their spending.
Imagine an organization with 400+ applications. You can say their cost overruns could be in the millions.
Access to the latest price benchmarking is necessary for procurement. It’ll help you avoid overspending on applications and purchase the right product at the right price.
3. Understanding SaaS pricing models
In-house procurement teams without dedicated SaaS buying experts may not understand SaaS pricing models and negotiation strategies.
Without skilled negotiators, there's a risk of overpaying for subscriptions or accepting unfavorable terms. Over time, these cost inefficiencies can accumulate, impacting the organization's bottom line.
4. Familiarity with SaaS vendors
SaaS buying experts like CloudEagle have years of cultivated relationships and playbooks with vendors, which has given us access to pre-negotiated vendor discounts.
This is something in-house procurement teams or even SaaS buyers in organizations lack. You might get discounts from vendors you’re already in contract with, but what about new vendors?
You need to ace your negotiations with vendors to secure discounts. Without negotiation expertise, you might pay the list price without discounts, leading to increased SaaS spend.
These are some major challenges that in-house procurement teams face. But these challenges will lead to increased software spending and cost overruns, ultimately affecting your organization’s bottom line.
Your primary focus should be on addressing these specific challenges, and the easiest and most cost-effective solution is to outsource your SaaS buying process to CloudEagle.
Do you have a dedicated team to handle vendor negotiations, or does your procurement team handle all aspects?
Lack of negotiation expertise is a major challenge for procurement teams in most organizations.
It's important to recognize that SaaS negotiations are an intricate process that demands time and thorough research to gather the right data for effective negotiation leverage.
While experienced negotiators might find it easy, your procurement team, lacking negotiation expertise, could face challenges with the same task.
This can burden your procurement team, impeding their productivity and ability to focus on strategic business activities. In the worst-case scenario, they might end up procuring products at higher prices that don’t align with your business needs.
Why outsource SaaS buying to CloudEagle?
Platform usage insights
CloudEagle has an extensive integration library can connect with all your applications and provide a bird’s eye view of your SaaS stack. You’ll be able to see the applications purchased, how they are being utilized, related spend, and the number of purchased licenses.
For successful vendor negotiations, you need to understand the usage completely; only then will you be able to negotiate effectively. Suppose you lack insight into how your licenses are being used. In that case, vendors may take advantage of the situation, attempting to upsell and increase your expenses, potentially leaving you at a disadvantage.
Based on CloudEagle’s usage data, you can harness unused licenses and reallocate them to other users. Alternatively, our experts can assist you in negotiating with vendors. You can leverage your team’s reduced scope and right-size those licenses, resulting in cost savings and license optimization.
Latest price benchmarking data
CloudEagle’s SaaS buyers have access to the latest price benchmarks. We have the largest benchmarking database from our previous transactions and trusted sources.
Armed with benchmarking data, our negotiation experts can engage with the vendors and ensure that you pay the right price for the product, similar to what your peers are paying.
Our SaaS buying experts will not settle for vendor list price quotes. This is where they use their expertise, conduct detailed market research, and compare competitive pricing and price benchmarks to get the vendors to agree on a pricing term that aligns with your business needs.
Our SaaS buying experts will ensure that there are no cost overruns in the future, as you won’t be overpaying for the applications like you used to.
An extended team
When we talk about outsourcing SaaS buying, we’re not talking about handing over your entire procurement process to us.
Our experts will work with your internal team as an extended resource, providing valuable suggestions and recommendations based on platform insights and market data.
We’ll analyze your team’s requirements, create a list of applications you need, suggest the right vendors, prepare a proposal plan with your insights, negotiate on your behalf, and secure the right deals.
This is something our competitors don’t do. They take over your entire negotiation process and work as an external service provider.
What sets us apart is our collaborative approach. We work with your internal team, jointly make decisions, and consider your input. In contrast, other SaaS buying services often operate in isolation, dictating instructions without valuing your insights.
Renewal workflows to bring visibility to the entire process
Auto-renewals are a major hassle for organizations, leading to hidden costs. CloudEagle can integrate with your internal SSO, HRIS, finance, and contract management systems and extract all relevant contract information, including contract value, renewal dates, etc.
Our SaaS buying experts will proactively track SaaS renewals based on the calendar created by our platform and eliminate the auto-renewal clause from the contracts.
CloudEagle will send reminder alerts 90 days in advance as the renewal deadline approaches. This will provide enough time for our experts and your team to collect the usage data, conduct market research, leverage price benchmarks, and handle the renewal negotiations.
If you’re planning to right-size unused licenses or move to a lower pricing plan due to decreased scope, our experts will adeptly negotiate the terms, ensuring alignment with the vendors.
Pre-negotiated vendor discounts
CloudEagle has access to 500+ exclusive pre-negotiated vendor discounts, which our experts will leverage during the negotiation process to secure discounted contracts.
In addition to negotiation, our experts will be engaging with the vendors in a timely manner, acting as a conduit between you and the vendor.
Consider vendors as your business partners; you need them for a seamless flow of business operations, and our experts will help cultivate a productive and enduring partnership for both parties.
There you go, the major reasons to outsource your SaaS buying process to CloudEagle. Here’s a quick rundown:
- Our experts possess years of negotiation experience with SaaS vendors
- We work as an extended resource of your team rather than an external provider
- Access to the latest price benchmarking insights to avoid cost overruns
- Access to pre-negotiated vendor discount
- Proactive renewal monitoring and effective re-negotiation to optimize spend
- Maintain a healthy vendor relationship.
Years of negotiation expertise
CloudEagle’s SaaS buyers aren’t novices; they have years of negotiation experience. They’ll assist you during the negotiation process; either you can take the lead or leave it to our experts to negotiate and purchase the right product at the right price.
You can contact our experts for negotiation advice or guidance when a new purchase request arises or during renewals. Our assisted buyers will always be available to help you streamline the negotiation process.
Our SaaS experts will analyze your requirements, conduct deeper market research and competitor analysis, leverage the latest pricing benchmarks, and provide you with precise insights essential for successful negotiations.
You can lead negotiations with our experts offering support, or you can opt for our experts to manage the negotiation process on your behalf—the choice is yours.
Here's Sophie Wang, Finance Manager at Wefunder, sharing her success story of how CloudEagle helped them save on SaaS spend through negotiations.
[Bonus] Procurement workflows
CloudEagle doesn't just offer assisted buying services, the platform can help streamline your SaaS procurement process with automated workflows. Your procurement team will be spending most of their time chasing approvals, with workflows, each task will be assigned to the right stakeholder automatically.
Stakeholder will be notified via Slack, Email and In-app notifications, they can collaborate via private Slack channel and make informed decisions.
If the relevant task is incomplete, it'll be escalated to other members to ensure that the requests are approved on time, so your team can focus on negotiations.
CloudEagle also has "Slack for Procurement." a dynamic Slackbot that lets users raise purchase requests from Slack. You can create private Slack channel for specific workflows and manage the process from Slack.
Click here to know more about the interesting capabilities of CloudEagle's procurement workflows.
Benefits of outsourcing to CloudEagle
Here are some key points to consider when hiring an in-house procurement member versus using CloudEagle’s expertise to negotiate with SaaS vendors.
Our SaaS buyers will ensure you’re paying the right price for all the vendors. They constantly track the usage insights using the CloudEagle platform to analyze if the licenses are effectively utilized.
CloudEagle provides a savings guarantee of $300K against a cost of $86K (3.5x guaranteed ROI). Your in–house procurement person will not guarantee that.
CloudEagle deals with the customer’s vendors 24/7, which gives them the edge in negotiations. Our pre-negotiated vendor discounts have helped customers save thousands of dollars on their SaaS spend. We are an SME when it comes to SaaS vendors.
Price benchmarking will ensure no cost overruns, and always-on renewal monitoring will ensure that your contracts aren’t auto-renewed, resulting in significant cost savings for your organization.
Save time and increase productivity
Outsourcing your SaaS buying process will save time for your internal resources and increase their productivity. Rather than spending their time collecting data for negotiation, they can focus on more strategic business that'll double your revenue.
Nowports, one of CloudEagle’s customers, saved time and money by outsourcing their procurement process. Check out this interesting customer success store →
You spend less than in-house
Let’s say you decide to train your team to negotiate or hire dedicated SaaS buyers for your team. Both initiatives will only cost you money and result in poor ROI. Also, let’s not forget that hiring a professional negotiation team isn’t easy; it will consume valuable time that can be saved by outsourcing to CloudEagle.
Hiring in-house experts to handle negotiations is not recommended, as outsourcing costs less than training in-house members.
Our experts will act as an extended part of your team, collaborating with your technical teams to understand their requirements and ensure all departments have access to the right tools.
In addition, CloudEagle has a platform that can automate and streamline your entire procurement and renewal processes. Your team will no longer miss any renewals, and with timely alerts, you can stay ahead of renewals and ace your negotiations with the help of our experts.
Always-on suggestions and recommendations
Our SaaS buying experts aren’t one call or email away; they’re always with your team, analyzing usage, monitoring vendors, and researching market trends. They’ll keep providing suggestions on how to optimize your SaaS portfolio.
CloudEagle platform will provide complete visibility into your SaaS portfolio, and its dashboard will be filled with insights and updates for you to act on.
You can identify duplicate, redundant, and free apps and eliminate them with the help of our experts, and you can use our procurement workflows and negotiation assistance to prevent shadow IT, resulting in streamlined procurement and significant cost savings.
Tail spend management
Tail spend refers to those small, often-forgotten purchases that can slowly eat into your budget. We know that even the smallest purchases can impact your organization's bottom line.
Our experts will work closely with your team to assess and optimize these minor expenses, identifying opportunities for cost savings and preventing unnecessary expenses.
CloudEagle platform will provide insights into all your SaaS purchases and expenses, even the tail spend ones, enabling you to make smart decisions and cut costs. By helping you optimize tail spend, CloudEagle will ensure that no part of your budget is wasted.
Flexible contract terms
With our expert team, wide vendor network, and years of cultivated vendor relationships, we can get discounts and flexible terms in your agreement, like:
- Better support terms (accessibility via phone rather than just email and chat)
- Support requests can be solved on a priority basis.
- Billing frequency of choice: monthly/quarterly/annual billing
- No auto-renewals
- Low/no fines for late payments up to a certain period
- Cap on price increment or price lock for future, etc.)
- No cap over usage or usage-based pricing based on your requirements
- We check the security and compliance posture of the vendor.
To help you make the right decisions, you must check out the reasons why procurement teams are choosing CloudEagle.
Moving from reactive to proactive procurement approach
Many organizations face challenges of overspending, choosing the wrong vendor, post-purchase hidden expenses, integration hassles, and so on. This is because of the reactive procurement process they follow.
SaaS procurement has evolved; it is no longer a process to be overlooked. You cannot wait for an issue to arise and look for a quick solution. You must be more proactive, predict the challenges, analyze the requirements and future needs, and build a strategic relationship with vendors for continuous improvement and a streamlined procurement process.
This is why you need a procurement partner like CloudEagle. Its platform insights, integrations, price benchmarks, workflows, and SaaS buying experts will help you forecast what’s coming and create a long-term strategic plan to meet the demand. This will help you keep your spending optimized and your operations efficient.
Free your procurement teams from time-consuming vendor research. Let us do all the heavy lifting, from selecting the right vendors to booking a discovery call. You must ensure that the vendor and the product features align with your needs and sign the contract.
We aren’t against in-house procurement, if you have the right team of procurement professionals and negotiators, you can do it yourself. However, we know that’s not the case in most organizations.
Here is Armory’s customer success story, discussing how they increased their savigns by outsourcing their procurement process to CloudEagle
So, instead of spending too much time and money on building and training a new team, just outsource your SaaS buying process and let us do all the heavy lifting while your team can focus on their core tasks.
Are you ready to see 2–5x ROI on your spend? Book a demo with our experts, and let us proceed with the next steps.