Software procurement is a crucial aspect of a company's operations, impacting various facets of its performance, efficiency, and competitiveness.
If your company is less than 300 employees you’ll have a robust finance and IT department, however you may not have a dedicated procurement professional. And if you do, they probably do not come from a competitive sales background where they stay up to date on pricing strategies and changing pricing models.
This is where fractional procurement can play a key role in saving your business money.
For example:
A software procurement firm such as Smartcost.io (and others) have large amounts of pricing data based on similar vendor contracts to your own needs. This can create pricing power and help you get the lowest licence prices fast.
You don’t have to “play the bad guy” with any vendor relationships. By having a procurement advisor play a negotiation role you can maintain full goodwill with any vendor.
You can stay focused on the solution evaluation with respect to its features, then go about your day to day. You no longer need to be caught up in endless pricing calls, compliance calls, and legal red-lines.
From an ROI perspective…
Outsource software procurement may become more profitable than sales after a certain level. For example if you’re saving 10% on each contract, this could net result in 100k savings for a 1M SaaS spending company. Factor in the time saved and strategic benefits and you’ve created equal ROI to a sales professional that scales as you grow. Let’s assume the procurement fee was $25k/year.
Here 10 more reasons why software procurement is important for a company:
Enhanced Productivity:
Automation of Processes: The right software can automate repetitive tasks, allowing employees to focus on more strategic and value-added activities.
Streamlined Workflows: Software solutions can optimize workflows, reducing bottlenecks and increasing overall efficiency.
Cost Efficiency:
Resource Optimization: Properly chosen software can lead to resource optimization by reducing manual labor and minimizing errors.
Total Cost of Ownership (TCO): Evaluating and selecting the right software can help in managing the total cost of ownership, considering not just the initial purchase cost but ongoing expenses.
Improved Decision-Making:
Data Analysis and Reporting: Many software solutions provide robust analytics and reporting tools, enabling data-driven decision-making.
Real-Time Information: Access to real-time information through software can facilitate quicker and more informed decision-making processes.
Compliance and Risk Management:
Legal Compliance: Software can assist in ensuring that the company adheres to industry regulations and legal requirements.
Security Measures: Procuring secure software helps mitigate risks related to data breaches, protecting sensitive information.
Scalability and Flexibility:
Adaptability to Growth: Scalable software solutions allow the company to adapt to changing business needs and accommodate growth.
Integration Capabilities: Procuring software that can integrate with existing systems enhances flexibility and ensures a smooth flow of information across the organization.
Competitive Advantage:
Innovation and Differentiation: Having the right software can provide a competitive edge by enabling the company to adopt innovative technologies and stand out in the market.
Faster Time to Market: Software tools that facilitate quicker product development or service delivery contribute to gaining a competitive advantage.
Employee Satisfaction and Retention:
User-Friendly Interfaces: User-friendly software interfaces enhance the overall user experience, leading to higher employee satisfaction.
Training and Skill Development: Investing in software with training resources can contribute to employee skill development and satisfaction.
Customer Experience:
CRM Systems: Customer Relationship Management (CRM) software helps in managing customer interactions and improving overall customer experience.
E-commerce Solutions: For businesses with an online presence, the right e-commerce software can enhance the customer shopping experience.
Strategic Alignment:
Alignment with Business Goals: Procuring software that aligns with the company's strategic goals ensures that technology investments contribute to the overall success of the organization.
Innovation Alignment: Choosing software that supports innovation initiatives keeps the company at the forefront of technological advancements.
Vendor Relationship Management:
Vendor Accountability: Proper software procurement involves selecting reputable vendors who offer ongoing support, updates, and maintenance.
Negotiation and Contract Management: Effective procurement involves negotiating favorable terms and managing contracts to ensure value for money.
In summary, software procurement plays a pivotal role in driving operational efficiency, reducing costs, mitigating risks, and positioning a company for success in a competitive business environment. Especially in the mid-market.
It is an integral part of strategic planning and can significantly impact various aspects of organizational performance.