The average startup has quite a few SaaS subscriptions. Today, growth businesses use cloud software to supplement almost every part of their stack, automate tasks and operate more efficiently. Our research shows that on average, startups pay for 45 subscriptions – and that number only gets bigger as they scale.
It’s no wonder the SaaS market is booming. Globally, software as a service is predicted to see significant growth - to $374 billion by 2026. But when startups spend so much on SaaS – for many, it’s their second-biggest expense behind headcount – they need to be sure they’re seeing a solid return on investment. That’s not easy without good software management platforms in place.
A lot of startups know this and are already looking for solutions to help. 65% of Finance and IT leaders admit there’s room for improvement in their current SaaS management processes. But SaaS management platforms aren’t one size fits all. Some focus on spend management, others on user management, and others still on vendor management. So, what are the key features and functionalities of SaaS management platforms that will ensure you’re getting the most from your software investment?
What’s the difference between SaaS management and spend management?
More often than not, growing software spend is the trigger point that tells startups it’s time to start thinking more strategically about the SaaS they buy. For that reason, many start their search with spend management solutions.
Spend management software helps businesses track and control non-payroll costs. It can be used to manage everything from employee expenses, marketing spend, travel, lunch…you get the picture. There is a range of really useful spend management tools on the market, like Ramp or Brex that address this opportunity.
Software is different. The buying of software is the easy part since you can simply use any credit card. But being able to keep oversight of software costs isn’t the same as getting value from it. For one thing, spend management software can only track the price of the subscription – not the many other ways that poorly managed SaaS can cost businesses money. We’ve talked before about the ‘hidden costs’ of SaaS that many businesses don’t even know they’re incurring, including:
- Duplicate subscriptions
- Unused subscriptions
- Wasted manual hours
- Unexpected subscription renewals
- Compliance fines
And there are other challenges, too. Besides overspending, a lack of proper software management can also negatively impact company culture and cause security risks. Implementing spend management software won’t tackle those issues and is, at best, a partial solution for the SaaS chaos startups say they’re experiencing.
Instead, startups should look for SaaS management tools that can work alongside existing spend management platforms. SaaS management helps reduce the risk of uncontrolled tools or technologies, improve the value of software and increase the effectiveness of the teams that rely on it to drive success. Here are the key features and functionalities to look out for at each stage of the software lifecycle:
Key Features of SaaS management software
1. Discover
One of the reasons SaaS is so popular is because it makes it easy for people to find the software that’s best for them, rather than having no choice. But that can quickly result in businesses buying software they don’t really need, or already have a similar version of.
A good software management platform will aid decision-making by giving visibility over the tools already in the business, helping teams get access to them, and making recommendations about best-fit solutions.
Key features include:
A centralized SaaS dashboard
A single source of truth where the entire business can see all subscriptions currently in the business.
Approvals control
A lightweight procurement process that makes it easy for teams to request software and managers to approve them.
2. Buy
SaaS is typically low cost, but spend swells when subscriptions renew automatically, or tiered pricing kicks in. That causes headaches for the finance team attempting to reconcile and forecast budgets – especially if employees have bought with their own cards and expensed subscriptions back.
Look for software management platforms that make it easy to pay for subscriptions in a compliant way, as well as reduce and control spending.
Key features include:
Virtual cards
Unique virtual cards with a set spending limit for every single subscription.
Cashback
A rewards program that gives you points for your software spend.
Analytics
Real-time reporting on subscriptions and users, and the ability to identify savings and project budgets.
3. Manage
As businesses scale, it’s important to ensure that SaaS–and their recurring subscriptions–continue to drive value. There are a lot of different aspects to that, all of which need processes built around them.
Software management platforms also help automate recurring tasks, make it easy to onboard and offboard new users, and keep the business secure and compliant.
Key features include:
Invoice Automation
Automatic capture of SaaS invoices from emails and matching to payments.
Accounting integrations
Direct integrations with essential accounting and financial software.
Built-in risk management
Software purchasing workflows with embedded compliance measures and certification.
4. Cancel
Part of the reason SaaS stays inside businesses so long is that it’s hard to cancel. Offboarding processes are opaque and complex, meaning businesses are often surprised with expensive auto-renewals, or let subscriptions roll on while tools lie unused.
Software management platforms streamline renewal and cancelation processes, allowing businesses to control cash flow and save money.
Key features include:
Renewal reminders
Automated renewal reminders that warn when free trial or subscription periods are approaching.
One-click cancelation
Streamlined cancelation and offboarding processes from a centralized SaaS dashboard.
SaaS management is a holistic process, and a good SaaS management platform gives businesses the tools to manage it from end to end. It can help businesses regain control and visibility over saas subscriptions, spend and usage, so they don’t just save money, but streamline their operations.
To find out how Cledara can help you take control of your SaaS subscriptions, book a 15-min demo now.
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