Procurement & SaaS – Exploring the Synergistic Relationship between the Two

saas procurement

Over the past decade, there has been a sharp rise in the number of firms relying on digitization to carry out their sourcing and procurement tasks efficiently. Procurement SaaS enables companies to stay updated on company payments and purchases.

According to the Mordor Intelligence market report, the procurement software market is poised to register a CAGR of 10.2% during the forecast period of 2019-2027. Software companies are increasing their focus on in-demand technologies and exploring innovative ways to cater to their client’s demands. This blog explores SaaS procurement software, steps in SaaS procurement, and the top 10 procurement SaaS solutions. 

What is SaaS Procurement?

As organizations grow their SaaS adoption and usage, the implementation of SaaS procurement solutions becomes crucial because upgrading from ad hoc buying processes to modern subscription management leads to significant improvements in overall spending reduction and control.

SaaS procurement refers to the process of choosing the right SaaS tools and SaaS vendors for your organization, assessing their compliance and security standards and implementing them properly. 

The SaaS procurement process in a company assesses and chooses SaaS vendors and tools. This requires different skills and knowledge compared to traditional procurement. Procurement SaaS solutions help manage and execute their SaaS procurement by providing tools that help find and evaluate SaaS vendors, manage contracts, measure ROI, and track your spending.

Outsourcing SaaS procurement lets companies focus on other parts of their business. One of the reasons SaaS procurement has become important to many organizations is that the software has replaced hardware and human capital in the key functions of the company. 

The process of SaaS procurement has become more commonplace as SaaS apps have overtaken on-premise solutions. A successful SaaS procurement process ensures organizations find the right tools for their needs and properly vet the subscriptions before implementing them in day-to-day operations.

What are procurement saas solutions?

A SaaS procurement solution or SaaS vendor management platform is a service platform or tool that assists users in managing SaaS app contracts, licenses, negotiations, renewals, and more. The best SaaS procurement solutions help companies save time during the negotiation process, manage SaaS spending effectively, and potentially secure more cost-friendly contracts for their technology investments.

What is SaaS Procurement Software?

Software as a service (SaaS) procurement software is an online solution that helps businesses streamline the purchasing process. The software integrates with existing systems and allows users to purchase products and services, monitor supplier performance, and track budgets. This software provides tools required for efficient spending management without requiring additional hardware or software. 

Organizations engaged in SaaS procurement must undertake a thorough assessment of the vendor selection process to ensure it aligns with their goals. The objectives include – 

  • Researching and evaluating software options 
  • Negotiating terms and pricing 
  • Gathering approval from IT, finance, procurement, and other departments

Once these steps have been completed successfully, the organization can purchase a subscription fee to access the software rather than outright purchase a license. 

Steps in SaaS Procurement Process

The SaaS procurement process is different compared to the conventional procurement process. The traditional procurement process is initiated when a purchase requisition is created and ends with invoice payment. These steps are executed in sequential order, with triggers for each step being the completion of the previous step. The SaaS procurement process on the other hand varies depending on the organization and its needs. The following steps are typically involved in SaaS procurement – 

Identify the need

Before starting the procurement process, the need for SaaS service should be identified. This could be something as simple as knowing that the organization needs a new tool to improve its workflow, to something more complex like replacing the entire product suite. The needs could also include improving specific areas and determining the features and capabilities that are needed for the software to meet the requirements of the organization. 

Researching options

Once the business needs have been identified, the next step is to research and compare different SaaS options to find the best fit for the organization. Updated information about vendors and products in the market must be gathered for evaluating potential vendors. Sometimes taking the unconventional path and exploring new options that haven’t been considered before also pays off in finding the right vendor for your business. While evaluating the market, some sophisticated buyers will run an RFP process, mapping tools, their strengths and weaknesses. At this stage you will be defining business requirements, engaging the market using methods like RFP, RFQ, RFI, etc, and selecting potential SaaS vendors. 

Zeroing in on the vendor

Once all the evaluations have been completed, the right SaaS vendor is chosen. The chosen vendor is given a detailed proposal and has the opportunity to offer feedback. Organizations may also allow teams to weigh in on the features even before gathering input from the vendor. Before choosing the vendor, you need to explore many SaaS solutions and analyze and compare their features, costs, customer service, and other significant factors. Commercial negotiations and contracting fall under this stage. 

Negotiate the contract

After the vendor has been chosen, the negotiation process begins. Once you have chosen a suitable SaaS solution and vendor, the next step is to ensure that the SaaS tool is implemented properly and the vendor relationship is maintained effectively.

The negotiation phase involves managing contracts, administering contracts, executing contracts, and managing SaaS vendor relationships. Contract negotiation involves a discussion of specific features and benefits of the service, as well as the price. In case the price is fixed, negotiation of features alone may be done. For larger contracts, the price may vary significantly based on the terms agreed in the contract. 

Efficient contract negotiation can make all the difference to the organization. The RPO from the subscription could end up being a valuable investment that you can make. On the flip side, a bad contract negotiation could lock you into an ongoing payment that you don’t want to pay and leaves a bitter taste in your mouth. The best contract negotiation can set the tone for the entire duration of the relationship and experience with the SaaS vendor in the future. 

Implement the SaaS service

Once the contract negotiation is completed and the contract is signed, the next step is implementing the SaaS service. Any additional queries that may arise during negotiations can be solved in this phase. During the implementation phase, teams must evaluate the effectiveness of the service and whether it is value for money. 

Monitor and manage the service

The procurement process does not end with implementation. You need to constantly monitor and manage the process. Efficient monitoring includes keeping an eye on the contract terms to ensure that tasks are as per the terms in the contract. Monitoring is required to ensure that the service is meeting the needs of the organization. Whenever there are any major changes or updates to the product, the procurement process will need to be repeated. 

Decide whether to terminate or renew the contract

When the service has been live for a while and tested by the team completely, there will come a time when you have to decide whether to renew or terminate the contract. The decision to renew or terminate the contract will be based on the performance of the service as well as the budget, and needs of the organization. A formal review process that is followed across the organization is a must in the SaaS procurement process. 

4 Reasons Why Procurement Leaders Choose SaaS Procurement

The proliferation of SaaS solutions in procurement has prompted procurement leaders to shift their focus to the benefits of SaaS and other cloud-based applications. Here are some reasons why procurement leaders choose procurement SaaS solutions – 

1. Lower per-solution cost

The main reason why SaaS procurement solutions are chosen by procurement leaders is the relatively low cost compared to on-premise software. While organizations are spending heavily on cloud applications, the costs are usually spread among many different solutions across departments.

SaaS models are typically based on subscriptions, so you pay only for the usage or users. If the company uses a cloud cost containment solution to track license utilization and they discover that the product is not being utilized as intended, then they can easily remove or reprovision licenses to reduce costs. For procurement teams, the cost benefits of SaaS and cloud-based solutions are crucial to consider as they weigh the pros and cons of each new software solution.

2. Simple implementation

A decade ago, software implementations were marred by failed deployments, where a software installation and rollout would take years or fail altogether. And the cost of these failed deployments was exorbitant. With SaaS solutions, there is a much lower risk that the product does not perform as per expectations.

Procurement and IT teams no longer need to be tied to a single application implementation for months or years, they’d rather work directly with the vendor’s services team for the implementation in order to be as hands-off as possible. The SaaS model allows them to focus their attention on third-party integrations and internal interconnectivity needs so that systems can share necessary data. 

3. Ability to test before purchase

When using on-premise software, procurement teams would spend a significant amount of time evaluating new software by sitting through demos or even visiting a vendor’s location to see the solution closely. But only after the implementation process was complete and the software was installed could they verify if it actually met their expectations.

There were no try-and-buy options available. Almost all SaaS products offer a free trial that offers a test drive of the software via a sandbox or in their own organization’s environment. This enables the buyers to evaluate the software and ensure that it works seamlessly with other applications before committing to the purchase. 

4. Seamless scalability

Organizational growth translates to scaling up of process operations. The software that runs the processes must also scale proportional to business growth. When this doesn’t happen, there is chaos, and processes are delayed frequently. Procurement teams are well aware of this issue that arises when they use on-premise software. Not only were these solutions a huge hassle for IT teams to configure the components and infrastructure for growth, but they also had to be manually installed for every employee whenever there was a software update.

This is never the case with SaaS products, whenever there is a need for adding more users to the software, the department head can easily add users or licenses themselves. The need for IT support is minimal in SaaS procurement. With new subscription-based applications being added on a rapid basis to organizations, procurement leaders are able to spend more time on larger, and more strategic initiatives. 

Should you Outsource SaaS Procurement?

SaaS procurement requires a lot of time and effort, especially as organizations scale. While you could create a team to handle these subscriptions internally, many businesses that use SaaS apps could choose to get help from a SaaS procurement platform to ease the day-to-day operations of their finance, IT, and procurement departments.

The right procurement SaaS solution can create a seamless procurement process for the entire company and for all the processes like onboarding, purchasing, data security, and even renewal monitoring. Outsourcing SaaS procurement might seem like the best option for companies. Here are 5 reasons why organizations may choose to outsource procurement – 

Reduced Risk

It could help reduce the risk of entering into bad contracts with vendors. The procurement software streamlines the vendor vetting process so that it becomes easy to make informed decisions on choosing vendors. Vendor assessment requires a close examination of the financial records, growth potential, and reputation of the vendors. Investing in an external SaaS procurement solution can also help with contract negotiations, as well as the subsequent management and monitoring of vendor services. 

Business growth opportunity cost

Implementing the SaaS procurement solution enables businesses to focus on more important parts of the business. This means that the procurement process can be managed more efficiently and the vendor selection process can be accelerated. 

Cost management

A SaaS procurement solution takes care of the contract review, negotiation, and management tasks so that the team can focus on other tasks that add value to the business. An experienced service provider ensures that all these tasks are completed efficiently, and costs are maintained to the minimum. 

Faster deployment

A SaaS procurement solution allows your company to test and deploy SaaS apps faster. Fast deployment of SaaS apps ensures that you reach your targets faster and also leads to a better ROI. 

Saves time

SaaS deployment is never complete, with new tools popping up frequently, auto-renewals, and re-negotiations to think about. Outsourcing SaaS solutions to an expert team leaves you and your IT team, and your in-house experts time to focus on core business activities. 

Lower costs

SaaS procurement can be expensive, especially if the employees aren’t well-versed in the process. Bringing on a solution with access to huge data pools and extensive experience will give you the leverage you require with SaaS vendors on costs, which enables you to get SaaS tools and licenses at ideal price points with minimal risk. 

Increase flexibility and scalability

Leveraging a SaaS procurement solution means someone procures, deployed, and most importantly negotiates agreements with vendors and manages your SaaS licenses for the company. Outsourcing SaaS procurement can improve the flexibility and scalability of not just SaaS tools but the whole organization as a whole.

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Common Mistakes in SaaS Procurement

SaaS procurement holds immense potential benefits for organizations, but it also comes with a unique set of challenges. There are some common mistakes that organizations make while investing in software as a service. 

Moving too fast or too slow

The SaaS procurement process maintains a delicate balance between speed and accuracy. While moving too slowly may lead to missed opportunities, being too fast can result in careless mistakes. An optimal timeline should be established for the SaaS procurement process. 

Not pushing for a pre-purchase test

Numerous vendors offer a pre-purchase test that allows organizations to evaluate the software’s fit before finalizing the procedure. It is important to not shy away from requesting this trial as it can prevent costly mistakes and save resources over the long term. 

Ignoring hidden costs

SaaS solutions entail various potential costs, both upfront and hidden. These may include expenses related to training, implementation, data migration, and more. Identifying these hidden costs is essential to ensure the success of SaaS procurement.  

Top 10 SaaS Procurement Solutions for 2024

Choosing the best procurement SaaS solution requires you to know the top procurement SaaS companies for 2024. We have curated a list of top workflow solutions that offer SaaS procurement solutions. 

  1. Cflow 
  2. Zylo
  3. Productiv
  4. BetterCloud
  5. CloudEagle
  6. Vendr
  7. Zuri
  8. Spendflo
  9. Tropic
  10. Sastrify


As more companies adopt procurement SaaS solutions, they need to explore various options by researching and comparing different software options. The choice of the SaaS procurement solution decides the success of procurement automation. Your search for a trusted workflow automation solution that offers customized workflows for various tasks in the procurement cycle ends at Cflow.

Cflow is a no-code BPM automation solution that can automate key workflows easily and effectively. The visual form builder in Cflow can build procurement workflows within minutes.

To explore Cflow, sign up for the free trial. 

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