May 19, 2021

Owning the SaaS Lifecycle: Key Questions Scaling SMEs should be asking

SaaS Insights

The incredible growth of SaaS in the workplace has been wonderful for the productivity of marketing, sales and development teams. What would the modern office be without favourites like Hubspot, Salesforce or Slack? 

But the more every other part of the business comes to rely on SaaS, the more challenging keeping track of it becomes for finance teams. Subscriptions across multiple cards, lack of visibility over ownership, and contracts which renew throughout the year mean SaaS management - or the lack thereof - is becoming increasingly laborious. 

With SaaS now one of the biggest cost centres in SME budgets, finance teams need more control. That goes beyond understanding what they’re spending, to what they’re using, how they’re using it, and why. It’s worth doing: we estimate that SMEs that take control of their SaaS management can save an average of £90,000 per year. Yes, £90,000 per year.

Spend management vs SaaS management**

Unlike other parts of the business, SaaS solutions for finance teams have been limited and slow to gain traction. But one area that’s seen significant growth and development is Spend Management – a popular option for finance teams seeking a ‘catch all’ solution for spend visibility across the company. 

There’s a reason they’ve become so popular; centralising expense management so that cards, invoices and payments are all visible in one place certainly makes corporate buying easier. But Spend Management software is a horizontal approach that bundles up all elements of company spend – including travel, entertainment, and office expenses – no matter how different they are. It’s not equipped or designed to make sense of the complexities of managing SaaS costs throughout the subscription lifecycle. 

After all, the act of purchasing new SaaS, including expansion and re-subscription, is relatively straightforward. Saas is very easy to buy and implement thanks to free trials, subscription models that remove most integration costs, and plan options that allow companies to purchase bigger packages at a click of button – or automatically upgrade, sometimes without even realising. It's everything that happens before and especially after buying SaaS that's hard. And by ‘hard’ we mean complicated, expensive, sometimes wasteful and ultimately destructive to company growth. SaaS has a very complex and dynamic lifecycle - and as it becomes more ubiquitous, the imperative for Finance teams to get a hold of it increases.

The SaaS Life Cycle**

So what are the other components of the SaaS lifecycle? And what questions should fast-growing SMEs ask at each stage to prevent spiralling SaaS costs?


When team members request new software, teams need to know: 

- What SaaS do we already have in the business? Is there overlap with existing products that would make this new software redundant?

- Is this SaaS application best for companies like ours? Will it have a limited scope or can it be used across the company - especially as the company scales?

- Are we aware of other SaaS solutions that may be a better fit for a company at our stage? 

- Is it worth the price? What are the longer-term costs as we grow? 


Once the decision to purchase has been made, the ongoing considerations begin:

- Who pays for it? Does the budget owner have the ability to buy without getting a pre-approval? To what team(s) does the cost get allocated?  

- How do they pay for it? Is it all on the same company card? What’s the process for using a single company card and then reconciling expenses? Should you use multiple cards? 

- Will there be other costs that arise throughout the year? Have upgrade scenarios been explored before the purchase? Have additional licenses or upgrades been factored into modeling?


Now comes the hard part, and the most often overlooked. During the subscription period is when finance teams need the most visibility and control, but have the least. Finance teams need to be asking:

- Are we using the SaaS we’re paying for? Who’s using it, when and how much?

- How do we simplify risk management for the software? Are multiple SaaS integrations and users putting us at risk of a data breach?

- How can we keep admin to a minimum?


While purchasing a SaaS is made as easy as possible, cancelling it is often anything but. This is of course by design: software vendors have made this part of the process unnecessarily complex and opaque. Find out: 

- When is the renewal date? Is an invoice sent? And to whom? Many SaaS applications feature automatic renewals including notification periods of 30, 60 or 90 days 

- What is the cancellation process? How complex is it and what are the barriers to a straightforward cancellation?

Managing the SaaS lifecycle**

Spend Management software alone won’t help finance teams handle the increasing complexities and costs of the SaaS lifecycle. That’s why they need a holistic SaaS management solution that is designed exclusively for software. Without one, it’s near-impossible for finance teams to retain the visibility and control they need to effectively model and budget. And for growing businesses, that’s critical. 

As SME SaaS tech stacks grow, management of the software portfolio has become a major part of the finance team’s role - and a major time and resource drain. In our Hidden Costs of SaaS series, we’ll be exploring the implications of finance teams’ lack of visibility over the end-to-end SaaS journey. Stay tuned to find out how to reduce admin, cut costs and take back control. 



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