SaaS Procurement: A must for modern business
We look at SaaS procurement and the new company taking this sector by storm, Sastrify.
Regardless of its size, every business relies on its software. Having a system that monitors, automates, and analyzes expenses is essential, so business leaders and staff can focus on higher-value tasks. While many spend management tools can assist in this area, they don’t cover all SaaS-related concerns.
As companies worldwide become more and more reliant on SaaS tools across their entire business, the risk of overspending and waste increases. The most common issue businesses face is overspending on CRM or cloud automation service since the change to remote services was caused by the pandemic. Some companies may like to see if more affordable SaaS tools can deliver the same features as its current suite. Most importantly, they want to not miss out on any opportunities for greater savings.
“Software is among the top three cost categories for most companies, says Jasper Masemann, Partner at HV Capital. “Managing commitments, payment, and cash flow for SaaS contracts are already some of the hardest challenges tech companies face,” he continues.
Sastrify is a new company that addresses this issue, founded in 2020; it perfectly complements spend management software. They offer a series of tools and services that are designed to help companies optimize their spending on software, helping customers through methods such as price benchmarking, negotiation support, and renewal alerts. These systems help companies make confident spending decisions and save them a fair amount of money.
This can be broken down into three stages to explain the process:
- Analyzing Current Spend:
The first step is to check over all pre-existing enterprise-level SaaS deals to see if they are priced reasonably. Sastrify has a current database of SaaS pricing that they maintain and update when needed and use to benchmark the financial bracket for the business. This informs those in charge of unnecessary overspending on the current suite of tools.
- Evaluating Service Levels:
Some companies are paying for SaaS services that are not needed, and the memberships for these can quickly be canceled, massively increasing financial savings. At this stage, evaluating existing service levels and checking if memberships are the right size is essential to identify possible areas to focus on. This way, businesses can get the features and capabilities needed at the lowest possible price.
- Negotiating Contracts:
SaaS providers are typically at an advantage during negotiations due to their experience of repeatedly running through the processes. Sastrify brings experience to any deal from the other side to use their knowledge and team to negotiate the best deal possible for the business. They know how to connect with SaaS providers and achieve mutually beneficial agreements that deliver substantial savings.
Recently the company announced that it had secured its $15mn Series A funding led by NYC-based firm FirstMark Capital, a well-known backer of industry leaders like Shopify, Pinterest, and Airbnb. This investment will help Sastrify grow internationally, so they are more able to assist companies with their SaaS needs. Adam Nelson, Managing Director at FirstMark, comments, “Companies are wasting billions of dollars and some of their most valuable employee time trying to discover, curate, and procure their technology, and Sastrify is tackling this problem by giving the power back to procurement teams through data and automation,” he continues by saying “Ultimately, we see the emergence of a modern, network-enabled, software purchasing stack with Sastrify at its core.”
According to Gartner, Enterprise software is already a $500 billion market; it is projected to grow more than 12% per year as more industries and workloads move to SaaS delivery models. This growth shows the demand in this area with the current technological focus of companies, and any savings in cost that a business can get should be taken.
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