SaaS procurement refers to the process of selecting, acquiring, and managing Software as a Service (SaaS) solutions that are suitable for an organization's needs. The process involves the following steps:
- Identifying the need for a particular SaaS solution within the organization.
- Conducting assessments of SaaS vendors who offer the required solution.
- Negotiating with the chosen vendor.
- Implementing and managing the SaaS solution within the organization.
By following these steps, organizations can ensure that they are selecting the right SaaS vendor that meets their specific requirements and can effectively manage it for optimal results.
The Difference Between SaaS Procurement and SaaS Purchasing
Procurement and purchase are two distinct terms that cannot be used interchangeably. Procurement encompasses the entire process from start to finish, which includes purchasing. On the other hand, purchasing is the specific step in which a product or service is acquired by the buyer.
In a SaaS environment, SaaS procurement involves identifying the need for SaaS within the organization, evaluating vendors, negotiating, purchasing the SaaS, and conducting continuous security checks. When purchasing a SaaS tool, procurement plays a crucial role in making an informed decision, so it should be carried out thoroughly.
SaaS Procurement Checklist
Every organization has its own unique dynamics and requirements. Therefore, this checklist should be used as a structure for a more customized approach. Adapting the following checklist to your organization's specific needs and processes will ensure a structured and practical approach to SaaS procurement:
- Assessment Phase: Define specific organizational needs and objectives for the SaaS solution. Identify key stakeholders and departments involved in the procurement process.
- Security Controls: Establish non-negotiable security and compliance standards that any potential SaaS solution must meet. Ensure alignment with industry regulations and internal policies.
- Budget and Cost Analysis: Determine the allocated budget and evaluate the cost-effectiveness of potential solutions. Consider long-term expenses, including scalability and additional features.
- Vendor Evaluation: Research and assess various SaaS vendors based on their security controls such as security measures like SSO, audit logs and MFA or compliances such as HIPAA, GDPR and more. Check vendor track records, customer reviews, and references.
- Negotiation and Contract Phase: Engage legal and procurement teams to review contracts thoroughly. Ensure clarity on terms, service level agreements (SLAs), data ownership, exit strategies, and compliance.
- Pilot Testing and Trials: Implement pilot programs or trials with shortlisted vendors to evaluate functionalities, user experience, and compatibility. Gather feedback from relevant departments and end-users.
- Integration and Compatibility: Ensure swift integration with existing systems and workflows. Verify compatibility with other tools or platforms used within the organization.
- Training and Implementation Plan: Develop a comprehensive plan for implementation, data migration, and user training. Ensure seamless adoption across the organization.
- Continuous Monitoring: To eliminate third-party risks within your organization, continuously monitor your SaaS environment, SaaS configuration checks and review user access.
- Renewal Management: Define procedures for renewal, negotiation, and potential termination of contracts.
- Vendor Relationship Management: Foster a strong relationship with the chosen vendor for ongoing support, updates, and potential customization. Establish communication channels for issue resolution and regular reviews.
Benefits of SaaS Procurement
The SaaS Procurement process offers several advantages to organizations, including scalability, cost efficiency, accessibility, updates, rapid implementation, scalable security measures, and a streamlined decision process.
- Scalability is a key benefit of SaaS solutions, as they allow businesses to easily adjust resources, features, and capacity to meet ever-evolving needs and demands. This flexibility is particularly beneficial for growing companies or those experiencing changes in demand.
- SaaS tools operate on a subscription-based model, making it more cost-efficient than traditional software purchases. The lower initial investment and predictable recurring payments eliminate the need for in-house infrastructure maintenance, resulting in cost savings. Furthermore, with a rigorous procurement process, organizations may achieve the best-aligned solution with its best-aligned package, resulting in 100% utilization of the purchased solution.
- SaaS applications are accessible from any location with internet access, promoting remote work and collaboration. The SaaS providers manage updates and maintenance, ensuring that users always have access to the latest features and security patches without additional effort from the end user or the organization.
- SaaS solutions generally have quicker deployment times compared to on-premises software. The faster deployment times allow organizations to integrate new tools into their operations, enabling more rapid adoption and time-to-value.
- Most SaaS providers invest heavily in security measures, offering robust protection against cyber threats. They often implement industry-standard security protocols such as SSO logins, MFA, encryption, and regular audits, providing a higher level of security than many organizations could achieve independently.
- SaaS procurement can simplify the purchasing process for software solutions. It often involves straightforward subscription-based models, reducing complex negotiations and minimizing the burden of hardware/software compatibility issues.