SaaS renewal best practices:
ditch spreadsheets and make savings

With the SaaS market growing year-on-year, businesses benefit from more time-saving and budgeting tools than ever. It’s wonderful, but not always win-win. 

The average company wastes 51% of licenses and $18 million annually on unchecked software. How is this happening?

• Each new application comes with a subscription plan to manage. That’s at least 50 different dates and renewal procedures to stay on top of for most medium-sized organizations. 
• Many businesses still rely on spreadsheets to collate information about app subscriptions. Such practices are prone to human error and confusion. They also cannot set renewal reminders, resulting in last-minute panic days before renewal or even missed deadlines. 
• A lack of adequate internal SaaS audit means that wasted money on ineffective apps goes unnoticed. 
• Application auto-renewals wear the perfect disguise by appearing to ‘save time’ on lengthy renewal processes. In fact, auto-renewing causes deals, discounts, and savings to be lost. 

If this sounds familiar, you’re in the right place. 

An effective SaaS renewal process will ensure your financial performance doesn’t suffer. Many companies are making significant savings every day. 

For example, a mid-sized enterprise of 650+ employees made software savings of over $128,000 using the best renewal practices. 

A small-sized enterprise of 50+ employees gained 45-50% discounts for four SaaS apps using renewal best practices. They also celebrated the time they had gained in the process. 

Savings and business success are achievable with the following SaaS renewal best practices. 

There are six key elements to seamless subscription renewal. 

1. A centralized SaaS management platform

Drag those spreadsheets to the bin and wave goodbye to an unsecured, unhelpful, confusing system. 

We can already hear the IT team breathing a sigh of relief…

But what do you use instead of spreadsheets to track your SaaS subscriptions? 

A SaaS management platform allows you visibility of all your applications in one place. By consolidating your software data, you make it easier to find and retrieve all the contract data you need when it is time for renewal or auditing. 

Features such as an overview of renewals and subscription deadlines provide a much-needed synopsis of the bigger picture. 

IT teams can feel isolated in some organizations, overseeing multiple apps with little employee input. A centralized platform removes the gap between IT and other departments. Subscription renewal becomes a joint responsibility between the app users, IT team, and finance department rather than one department making a ‘best guess’ about whether to renew a subscription or not. 

A centralized management platform also eliminates the risk of employees subscribing to apps without authorization. This pesky practice, known as Shadow IT, can account for approximately 11% of cyber incidents within your company and take up 30-40% of a company’s expenditure. 

Hidden applications drain the budget, but an effective SaaS management platform brings all subscriptions into the spotlight. 

It’s neat, it’s efficient and it’s a huge money saver. 

After taking the first step towards a successful SaaS renewal system with a centralized SaaS management platform, you must consider who is responsible for each app’s ownership. 

2. Defined ownership

Have you ever looked at your list of company apps and thought – Who made this purchase? Who actually uses this app? You’re not alone. 

It is laborious and inefficient for IT teams to manually search for owners and users when it’s time to review SaaS tool utilization and renewals. 

Critically, a lack of clarity on ownership and usage leads to ambiguous reports on app ROI. This confusion poses a significant risk that money will be wasted on apps that no longer achieve the organization’s best outcomes. 

An effective SaaS management tool can ensure licenses are assigned to employees and used purposefully. With accurate data on app usage, you can redistribute software across teams to optimize efficiency. 

Accountability is critical when it comes to the renewal of SaaS. By assigning a contact person for every subscription, accurate usage and app analysis can be used to make renewal decisions and evaluate the tool’s value to the company. 

After the initial setup of the SaaS management tool and ownership of apps, your company will soon notice an increase in efficiency. Your next step will make you feel even more time-rich. 

3. A 90-day renewal plan

A surprise gift? Great! A surprise invoice for an app that has sat unused on your system for most of the year? Much less welcome. 

It’s essential to create an internal policy to begin the subscription renewal process at least three months before the contract expires. A clear 90-day SaaS renewal plan for informed financial decisions at every stage will be very helpful.

A 90-day renewal plan will give you enough time to conduct an in-depth analysis of usage and ROI and conduct employee feedback questionnaires if necessary. Your feedback and analysis will help to determine if you need to make any changes to your subscription. You can reassess the number of licenses and subscription tiers needed and even consider if the app itself is still fit for purpose. 

When time is on your side, you can achieve even more. You will feel in control during negotiations with SaaS vendors and have more leverage to get a better deal, switch to a better plan or explore alternative solutions. 

Planning ensures you are well-prepared for the SaaS renewal process and can make informed financial decisions. Each decision contributes to company savings and, ultimately, success. 

A successful company is often a busy company. Unfortunately, a high workload can affect the best-made plans. The next factor for SaaS renewal removes the pressure of having another thing to remember. 

4. Calendar reminders

There’s no point in having a plan if the plan gets…forgotten. 

A forgotten plan could lead to an auto-renewal. Another chunk of your company’s budget might be a win for the SaaS app, but it’s a huge missed opportunity for your business. Automated renewals are one of the major causes of spend escalations in enterprises using SaaS applications. 

That’s why reminders and calendars are vital. 

Set up a renewal calendar to see your key dates at a glance and add reminders upon purchase to ensure you meet your SaaS renewal milestones. 

An early reminder helps your team start conversations with other teams and prompts action. If reminders are ignored, they can be escalated to more senior employees to increase the urgency as the subscription renewal deadline approaches. 

Save yourself the manual labor of creating a renewal calendar by using a SaaS management platform that displays the renewal dates, utilization state and subscription costs in one centralized location. 

Even better, tools with a visual monthly breakdown of your renewals help you to prepare and budget easily. 

At this stage, you have an excellent visual overview of your SaaS stack, and you’ve already gained much more control over your subscriptions. But, the next step is a critical factor in making strategic decisions for cost optimization. 

5. Analysis of SaaS subscriptions

You have your centralized platform, assigned ownership of subscriptions and a 90-day plan. What do you do when you get your first reminder that a subscription needs renewal? 

When a SaaS subscription is up for renewal, the application must undergo a thorough impact analysis. The audit requires a comprehensive approach, ensuring that time, money, and efficiency are considered. 

You could visit each app and explore individual usage data, but manually reviewing app usage is incredibly time-consuming. 

An effective SaaS management platform will allow you to see which employees use each application and how much they use them. 

Some subscription management platforms provide a SaaS audit to optimize your digital ecosystem. A good quality audit connects your identity provider with the management platform and unlocks a list of all SaaS tools that employees access through their corporate email. 

An audit can reveal: 

• Which SaaS tools are in use
• Who uses the tool
• The usage frequency
• Last login details 

This real-time license tracking exposes the organization’s actual needs and builds a picture of the overall value of the application. 

For example, think of an organization that uses three productivity tools. Now, imagine that one of these apps is used by only a handful of employees once every couple of months. Meanwhile, 75% of employees use the other two daily, and the last login was today. It’s clear which application isn’t necessary and has become more of a financial burden. 

Your thorough analysis will equip you well for the last stage of the SaaS renewal process – a headache-free negotiation.

6. A cost optimization opportunity 

Negotiations shouldn’t be quick agreements days before the renewal deadline, in which the vendor guides the discussion towards their own sales targets. 

Negotiations are an opportunity for cost optimization. 

After planning and analyzing your app subscription usage and ROI, you will arrive at your renewal negotiation with a strategic overview. Now, you’ll steer the conversation towards what you know will be most beneficial for your organization. 

One option is to ask for discounts or special terms. For example, you could ask for a custom package for your company that is explicitly tailored to your needs. To support your decision-making, some SaaS subscription management platforms provide pricing insights that highlight the pros and cons of applications. These are invaluable sources to gather intelligence about your chosen software and ensure there are no financial surprises, such as sudden cost increases, further down the line. 

It is also helpful to remind vendors that you have been a loyal, long-term, and trustworthy customer and would like to continue using their service. 

Alternatively, you may need to make the difficult decision to terminate your SaaS subscription entirely. But is it a difficult decision, really? Now that you’re equipped with an in-depth understanding of how your SaaS tools are maximizing value for your organization, culling underperforming apps becomes an easy and wise choice. 

In reality, though, your negotiation conversation may still involve some pressure from the vendor to renew. They have a job to do, after all. 

Luckily, you can avoid these renewal negotiation conversations altogether. The top-rated SaaS renewal management platforms use expert vendor negotiators who identify every opportunity to save on software and deliver financial wins for your organization. Expert negotiators capitalize on exclusive discounts and can win significant savings for your company.