Strategies to optimise your SaaS spending

Businesses today are increasingly utilising SaaS applications to streamline operations, enhance efficiency, drive profits, and ensure sustainability. However, this increased reliance on SaaS has also resulted in businesses having to take on the high costs associated with them. Strategies such as identifying redundancies, consolidating vendors, rightsizing licences, utilising a cost allocation strategy, ensuring the security and compliance of SaaS platforms, incorporating automation tools, and continuously monitoring strategies will help you optimise your SaaS spending, in addition to supporting your business’s bottom line.

In a world where digitisation has become a central focus for both individuals and commercial entities, the rapid growth of Software-as-a-Service (SaaS) solutions is a surprise to none.

Businesses around the world are increasingly incorporating SaaS services into their business processes to streamline operations, enhance efficiency, drive profits, and ensure sustainability.

SaaS platforms have garnered so much popularity that in an average business, 70% of software usage consists of SaaS applications. This rapid growth can be attributed to the reduction in upfront and maintenance costs for IT and the simplification of configuration and implementation for IT solutions.?

Why spend optimisation is important for SaaS

With businesses increasingly taking advantage of SaaS solutions, naturally, their spend on SaaS increases as well. Over the years, managing SaaS spending has subsequently become vital and challenging.

Some of the most common challenges that you may face when optimising SaaS spend are eliminating tool redundancies, reducing costs without affecting processes, and rightsizing licences.

This is where spend optimisation comes into play. The strategies put forth by spend optimisation aims to assist your business adjust your SaaS spend without negatively affecting business processes.

Strategies for spend optimisation in SaaS

Detailed below are some of the most notable strategies for SaaS spend optimisation.

Identifying redundancies

Redundancies in usage is one of the biggest reasons for overspending in SaaS. 90 SaaS applications are purchased by more than one employee on average, resulting in redundant spending. Conducting regular audits to identify these redundancies can cut your SaaS spending massively.

Consolidating vendors

Eliminating the large numbers of vendors used within your business for different SaaS services and instead utilising a small number of vendors that provide overlapping services is crucial for SaaS spend optimisation. This also helps secure more beneficial contracts from vendors that offer multiple services.

Rightsizing licences

According to a recent survey, businesses spend nearly $44 million per month on unused software licences. Conducting regular analyses to identify the software base used by employees and rightsizing the licences for unused/ underutilised software will further assist you in SaaS spend optimisation.

Utilising a cost allocation strategy

Implementing a department or team-based cost allocation strategy allows for better spend optimisation strategies to be put into place while also promoting accountability across the board. This will help your teams engage with SaaS platforms in a more responsible manner, minimising unnecessary usage and spending.?

Ensuring security and compliance

Making sure the SaaS platforms that are used in your business matches the security and compliance standards is also a key strategy that can optimise SaaS spending. This will help your business avoid potential risks and penalties causing unintended expenses down the line.

Incorporating automation tools

Incorporating spend management tools with automation options for managing SaaS subscriptions, tracking usage, and optimising resource allocation is also helpful for achieving spend optimisation goals. For example, the average renewal rate for SaaS applications is around 80-90%. Automation tools can help you track them and avoid renewals for unnecessary tools.

Implementing continuous monitoring

To ensure that each of the aforementioned strategies work for your benefit in the long term, continuous monitoring and improvement are necessary. This ensures that the strategies used meet business objectives and evolving market dynamics.

Reduce costs and drive growth with SaaS spend optimisation strategies

SaaS spend optimisation continues to become an increasingly important part of managing business spend with the rapid usage growth of SaaS platforms. The average business now spends $5800 on SaaS annually, per employee. The need for effective SaaS spend optimisation strategies is more apparent than ever in such a landscape.

The SaaS spend optimisation strategies detailed in this article will support your business by helping you maximise return on investment, enhance efficiency, and maintain a solid competitive advantage.