Everything to Know About Procurement Market Intelligence

Did you know that businesses can save up to 30% on their annual software spend by leveraging procurement market intelligence? 

Making informed purchasing decisions is fundamental to maintaining a competitive edge. This is especially true when it comes to managing SaaS procurement, where problems like unapproved purchases, shadow IT, and forgotten licenses are prevalent. These can lead to significant cost overruns, security risks, and missed opportunities for optimization.

Gartner reports that the right procurement insights could make all the difference for businesses operating in the modern landscape, and three years later, we can see that they were spot-on.

In this blog post, we will explore how to leverage procurement market intelligence and how Spendflo can help you save more.  

What is procurement market intelligence?

In the simplest terms, procurement market intelligence refers to the process of gathering, analyzing, and utilizing data to make informed purchasing decisions. 

In the context of B2B SaaS procurement, it involves understanding market trends, evaluating vendor performance, and assessing the total cost of ownership (TCO) of software products. This helps businesses identify the best deals, avoid overpaying, and ensure they get the most value from their software investments.

The main benefits of procurement market intelligence for a business

A study by Deloitte revealed that companies leveraging procurement market intelligence can achieve up to 10-20% savings on their procurement costs. Apart from this, there are several other benefits for businesses, such as:

• Cost Savings: By leveraging procurement market intelligence, businesses can negotiate better prices and terms with vendors, leading to significant cost reductions.
• Risk Mitigation: Understanding market dynamics and vendor performance helps businesses avoid potential pitfalls and make more secure procurement choices.
• Informed Decision-Making: Access to comprehensive data allows procurement teams to make well-informed decisions that align with business objectives.
• Improved Vendor Relationships: Regularly evaluating vendors and understanding their market position can lead to more robust, strategic partnerships.
• Enhanced Budget Management: Accurate insights into software costs and usage patterns help businesses manage their budgets more effectively.

How to gather accurate data for procurement market intelligence

1. Evaluate vendors

Conventionally, procurement used to be all about selecting the right vendor, and this step remains quite essential. You must thoroughly evaluate potential vendors and ensure they align with your business goals. This involves looking at their market position, financial stability, and customer reviews. 

By understanding a vendor's strengths and weaknesses, businesses can make more informed decisions and choose partners that complement and support them. 

2. Do a cost-benefit analysis

A cost-benefit analysis comes next in the procurement procedure. This analysis helps businesses understand the direct and indirect costs associated with a software purchase, as well as the potential benefits. This way, procurement teams can compare diverse options and identify the solution that offers the best value for money.

3. Understand total cost of ownership (TCO)

The TCO of a software product includes not only the purchase price but also ongoing maintenance, support, and upgrade costs. Understanding the TCO helps businesses anticipate long-term expenses, evaluate the ROI, and avoid unexpected financial burdens.

Many business transactions initially appear attractive but can become less appealing due to hidden conditions or unexpected fees.

For example, let’s say a software solution solves your problem and is also available at a too-good-to-be-true price. However, it might have high maintenance and support fees in the long run, making it the most expensive option. 

On the other hand, a product with a higher upfront cost but lower ongoing expenses might offer better value eventually. 

4. Ensure seamless collaboration to avoid shadow IT

SaaS procurement today is trickier to handle and manage because it is easy to buy different licenses. Furthermore, many tools have auto-renewals enabled as well, which further creates problems for the business.  

Without proper collaboration, you’d often waste your budget on two separate tools of the same kind across different teams. Imagine spending money on a subscription to Slack and Teams simultaneously. While this specific situation is unlikely because these particular tools would stand out too much, it’s a fact that organizations today are spending more than ever on SaaS tools they don’t need. 

5. Uncover user sentiment

User sentiment analysis involves gathering feedback from current software users. This can provide valuable insights into the product's strengths, weaknesses, and overall satisfaction level. User reviews, ratings, and case studies are excellent sources of this information.

6. Avoid buyer remorse

Buyer remorse can be a costly mistake in software procurement. Many tools stipulate multiple clauses in the contract to prevent you from opting out or at least make it as difficult as possible. To avoid this, businesses should conduct thorough due diligence before purchasing. This includes evaluating the software’s features, compatibility with existing systems, and scalability.

7. Understand price hike trends

Software vendors often adjust their pricing, which can impact your budget. By monitoring price hike trends, businesses can anticipate future costs and negotiate better terms during the procurement process.

How Spendflo helps you make informed renewal choices based on data

SaaS procurement and renewal solution Spendflo provides a comprehensive suite of tools designed to streamline the software procurement process and help businesses save on SaaS expenses. 

Here’s how it can assist you in your procurement journey:

Assisted Buying

Spendflo’s Assisted Buying feature provides expert guidance throughout the procurement process. From identifying the best vendors to negotiating favorable terms, Spendflo handles everything and ensures you maintain your competitive edge.

Intake-to-Procure

The Intake-to-Procure process simplifies the procurement workflow from the initial request to the final purchase. We ensure that all procurement activities are aligned with your business’s goals and budget constraints.

Procurement Analytics

Spendflo’s cutting-edge Procurement Analytics provides deep insights into your software spending patterns. By analyzing this data, you can identify areas where you are overspending, track usage, and optimize your software portfolio to ensure maximum value.

With Spendflo, businesses can navigate the complex landscape of SaaS procurement with confidence and ensure that they get the best value for their investments. To learn more, schedule a demo now!