• Sven Lackinger, Co-Founder at Sastrify


• 21.02.2023 07:30 am
#Investment

Sastrify is a digital procurement platform for Software-as-a-Service products. Founded in summer 2020, the company already supports hundreds of high-growth companies in buying and managing their SaaS spend. Before Sastrify, Sven Lackinger and Maximilian Messing cofounded evopark, the market-leading provider for SaaS solutions for parking operators.

Organizations of all sizes have always been focused on increasing both operational and economic efficiency. Software, one of the biggest costs facing any company, is one area in which both functional and financial gains can be made. From cloud and office tools to CRM and HR software, or collaboration and communication tools - SaaS solutions now underpin so many of an organization’s core functions. But if they are not kept in check, it’s easy for businesses to find that they have more than they need, resulting in waste and unnecessary spending.

Our research shows that 51% of businesses have increased SaaS subscription spend over the past two years, with 50% of decision-makers expecting it to continue to grow over the next three - despite the economic downturn. However, although it’s clear from these figures that SaaS spend will remain an integral part of business outlay, continued economic uncertainty means that it’s more important than ever for businesses to review their current software situation to ensure that they are getting the most out of their investments and have the appropriate data to enable smart purchases. 

Let’s take a closer look at how businesses can enhance their decision-making and turn software buying into a competitive advantage.

Centralized SaaS spend management

Each department within a company requires tech tools to run their operations – sales teams need a CRM system, marketing teams require email marketing tools and development teams need a product management platform. Chances are, those departments don’t have full visibility of every product used in the company, which makes it challenging to compare functionalities, ensure there is no functionality overlap and assess the return on investment (ROI) for each one. The growth of shadow IT, especially as remote and decentralized working has become the norm, has made the management of these different tools even harder and resulted in increased, unrealized costs.

Last year, we found that 66% of companies we surveyed had at least fifty SaaS tools, and 20% counted more than one hundred. Large enterprises typically use upwards of a couple hundred tools. Over time, it’s easy to see how the costs of these SaaS licenses mount up, making a centralized and automated procurement system to manage all SaaS solutions and their associated usage and cost essential. Not only can it provide an organization with a clear overview of all tools and their value to the business, but it can also help identify duplicate products, keep track of renewal deadlines and create opportunities to re-negotiate costs.

This is all the more important when you consider that almost 30% of software and cloud costs incurred by a company are not used as the result of employee turnover. Some companies purchase more licenses than they need in order to plan for future growth and expansion. Yet those calculations are not always correct, which results in unused subscriptions burning through budgets. Keeping track of these licenses through a centralized platform and cancelling unused ones can instantly help save money.

The use of data analytics for smarter decisions

No matter what a business’ strategy is, it’s important to have a clear overview of technology use and the impact it has on operations. Organizations need to set tech requirements from the get-go and track progress, which is why using data analytics is essential for smart decision-making.

Identifying cost drivers for each tool and getting volume numbers right is tricky if companies don’t have an overview of their SaaS tools and related use. While it's always possible to switch to an alternative tool, most companies lack the time and resources needed to conduct a comprehensive demo of the product and determine whether it's a better fit for their team. Our figures show that the day-to-day management and negotiation of SaaS subscriptions takes anything from eight to 40 hours per week. If you’re at the upper end of that scale, then it’s a full-time job.

With a centralized SaaS management platform, it becomes much easier to monitor usage and re-evaluate contract commitments ahead of renewal dates. Analyzing data from all departments can help forecast overall costs and identify wastage where tools are not utilised to the maximum, or at all. Moreover, it can help make smarter decisions when choosing different tools and switching to another vendor if it has capabilities that better suit the needs of the business.

Clear and centralized workflows

According to Gartner, when it comes to purchasing SaaS solutions, most decision-makers only get involved in the last 5-10% of the buying experience, which means they don’t have a clear overview of the whole process. In other cases, team members that actually need the tools in order to deliver work might not be involved in the decision-making process at all – this can lead to teams using solutions that don’t fully fit their needs.

With a centralized and automated SaaS management platform, every team member has a clear overview of each solution and can get involved in the decision-making process using transparent workflows and centralised communication tools. Senior decision-makers can quickly and easily review tools with the relevant teams before making a purchasing or renewal decision. Faster feedback from key stakeholders speeds up and enables more informed decision-making.

Despite economic turmoil, the enterprise software market looks set to continue its growth well beyond 2023, with market size predicted to reach $404 billion by 2028. As the choice of software tools on the market grows, and the digital transformation of organizations continues to increase spend on SaaS solutions, the need to ensure that software purchases strategically meet the growth needs of a business has never been more crucial. 

But the task of managing and negotiating multiple contracts is time and labour-intensive without the right systems in place to ensure clear centralisation and visualisation of the status quo. Without the data and feedback on which tools are being used most effectively, or where functionality and wastage lies, businesses risk cutting solutions that contribute to efficient operations and spending on those that don’t. 

Get the right platform in place though and it’s possible to create a 360-degree overview of spend, usage and renewals that eliminates shadow IT, duplication and wastage and enables clear decision-making in a fraction of the time that you may previously have spent trying to manage spreadsheets and bring clarity to chaos. Using this centralised system it’s possible to achieve spend optimisations of 30% and more and claw back multiple hours per week. What could you do with that time and money?