Finding new software that promises to make your job easier and deliver on business objectives can feel like all your Christmases have come at once. But to borrow a phrase, SaaS isn’t just for Christmas – in fact, our data shows that once businesses buy software, it’s with them for the long term.
That means you need to exercise some caution before you commit to buying or risk wasting money and running into problems further down the line.
The unfortunate news is that the majority of businesses state that less than half of their software is actually adding value. Once the honeymoon period wears off, business goals and team structures change, or better tools come to market, the software you were once so excited about can lose a lot of its shine.
At best, subscriptions roll over, wasting money while tools sit unused. At worst, forgotten SaaS can cause dangerous breaches in data compliance, damage team collaboration and culture across your business, and even hinder you from scaling.
The answer isn’t to say no to all new SaaS.
Startups and scale-ups rely on software to help automate and improve efficiency – both critical for teams operating on lean budgets, especially in times of economic uncertainty. Instead, you need to implement processes to ensure that you’re properly evaluating new software, and only investing in tools that will continue to drive value into the future.
What those processes look like depends on your business size, structure, priorities, and culture. But there are 10 steps we suggest you take before saying yes to new software:
1. Check what software you already have
Duplicate and similar SaaS is one of the biggest budget drains for scaling businesses. If you don’t have a centralized evaluation process, it’s unlikely you have visibility over all the tools being used by your business – and could end up paying for functionality you already have in an existing subscription or similar tool. Check with other teams and get a full inventory of your software before you commit to new tools.
2. Consider software scalability
Some tools are built specifically with the needs of startups in mind, others for scaleups, and others for enterprise businesses. If you’re growing, don’t just buy software for the stage you’re at now. Instead, check that tools can support more users, international customers, higher transaction volumes, and all the other things that will change as you scale. Otherwise, you’ll have to rip and replace software before you know it. That’s expensive and disruptive for the teams that rely on it.
3. Hack your existing tech stack
Growth is rarely smooth for scaling businesses. You might have outgrown your startup's software, but not be ready for more expensive, heavyweight enterprise tools. Often, it’s possible to find workarounds by patching solutions together or supplementing software with internal processes. It’s a short-term solution that can buy time and prevent the complications that arise from buying software you’re not ready for.
4. Get Finance and IT buy-in
Unapproved software frequently causes problems for IT and Finance teams. If IT hasn’t been part of the evaluation process, unexpected integration problems with existing tools may surface, and cause backend complexity. If Finance isn't involved, it can cause problems with reconciliation, budgeting, and forecasting. Loop in these two teams early to ensure software won’t cause more problems than it solves.
5. Make sure software is compliant
Make sure the software you buy isn’t putting you at risk. Data breaches are expensive – both in terms of fines, and the reputational damage they cause. Again, looping in IT and security teams can help you assess this, and save you from scrambling to prove compliance when it comes time to apply for ISO27001 certification.
6. Budget for ongoing costs
SaaS pricing is tricky. Often, the upfront price advertised isn’t exactly the price you’ll end up paying. Adding more seats and users, upgrading functionality, or paying based on usage can mean that costs far outstrip what you originally predicted. Make sure you have a handle on potential additional costs and when they’re likely to kick in, so you can budget accordingly.
7. Schedule a usage evaluation
One of the reasons it’s so hard to demonstrate the value of software is because it’s hard to see how often it’s actually being used. If the primary owner leaves or changes teams, new, better tools are brought into the business or you have to pivot your strategy, tools can lose their utility. Make sure they’re not just forgotten about: schedule regular check-ins to ensure software is still adding value and if it’s not, cancel it.
8. Keep an eye on renewal dates
SaaS is easy to buy. It’s harder to cancel. Many software vendors make cancellation processes deliberately opaque, with long, drawn-out processes that run on into the next subscription period. Put renewal dates in your calendar and find out exactly what cancellation processes entail, leaving yourself plenty of time to offboard SaaS if it’s no longer of use.
9. Create a software handover process
What happens to software subscriptions when primary users and subscription owners leave your business? In too many cases, the answer is…nothing. Companies continue to pay for software whether it’s being used or not. Ask your People team to add a software check to the employee offboarding process, and ensure there’s a proper handover for any tools team leavers are using.
10. Document, communicate and repeat
Processes are only effective if they’re embedded across the business and followed for every new software request. Whatever your evaluation process looks like, make sure it’s documented and communicated to the whole team, and that everyone is incentivized to follow it.
Software management tools like Cledara give you better visibility over the software in your business, how much it’s costing and how often it’s used. It can help you manage software through its whole lifecycle, making it easy to build processes and ensure SaaS adds, rather than drains value. To find out more about how to buy software sustainably, download our eBook or book a demo.
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