I.T. procurement teams need to figure out how to stay on top of their organization’s purchase and use of software, which is becoming decentralized with the trend toward cloud and SaaS products.

If your organization is like most enterprises, then you know first-hand how rapidly cloud-based technologies are being added to your technology stack, allowing your company to access internet-based computing and data storage and scale up usage as necessary. I.T. procurement teams are now tasked with connecting the dots on all software across an organization—and are often the only department that has the ability to do so. As a result, these teams are becoming the glue that holds the cloud ecosystem together for their organizations.

I.T. procurement professionals have a new challenge: to become proactive instead of reactive as procurement relates to the growing use of SaaS technology across the enterprise.
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Eric Christopher, CEO, Zylo

However, there’s something else that’s happening along with the incredible shift to software based in the cloud and often subscribed to under a software-as-a-service, or SaaS, model. SaaS enables users to access and administer software applications through a web browser instead of running it on their own infrastructure. While these software advances bring huge benefits to organizations, the decision-making process for purchasing technology is changing as well. In the past, it was much easier for I.T. procurement professionals to stay on top of decisions to purchase and use software when they were involved in the selection and purchase negotiation processes. However, that decision-making process is being decentralized to department leaders across organizations, removing I.T. procurement departments from the day-to-day involvement.

The challenge to become proactive

Now, I.T. procurement professionals have a new challenge: to become proactive instead of reactive as procurement relates to the growing use of SaaS technology across the enterprise. With the new way of decentralized decision-making, I.T. procurement teams can easily lose sight of top-line expenses, especially when subscription-based purchases are often made with a credit card or fall under a certain dollar amount that bypasses procedures for reviewing procurement. One department may have 100 SaaS products in use, for example, but I.T. may only be aware of a fraction of them.

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Another challenge for I.T. procurement teams is lack of visibility into software subscriptions that may be duplicates. What happens if the marketing department has a subscription to an email service provider, and the human resources department has a separate subscription to the same email service provider? That kind of overlap could be costing the organization double—and can be difficult to uncover if individuals or departments are paying via credit cards.

Finally, without visibility into the negotiated contract terms (or lack thereof), a company’s I.T. procurement department forfeits the ability to renegotiate terms or adjust the number of licenses based on true utilization. In renewal conversations, if the I.T. procurement department doesn’t understand who is actually using each solution—and what if any value their company is receiving—it is not in a good position to provide the best technology for their company at the best cost.

Guiding with a lack of visibility

While the benefits of SaaS are endless, the new shift also presents several challenges that have become top of mind for I.T. procurement teams, with visibility of product usage chief among them. Without proper visibility into an organization’s cloud-based systems, these teams aren’t able to act as the strategic glue that their roles require of them. If given unparalleled visibility into all SaaS spend, utilization and employee sentiment, I.T. procurement teams can be strategic advisors in the software purchasing cycle.

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Eric Christopher is CEO of Zylo, a provider of online technology used to manage cloud-based software applications. Follow him on Twitter @echristopher.

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