Developing an approval process for SaaS purchases is crucial to ensure that new purchases align with the company’s budget and financial objectives while delivering optimal results.
Here are some steps to develop an approval process for SaaS purchases:
- Identify the budget source: The first step in developing an approval process for SaaS purchases is to identify the budget source, whether it is a recurring budget allocated to the department or a specific project budget.
- Define the approval hierarchy: Define the organizational structure and personnel responsible for approving purchases based on their respective budgets or departments. This hierarchy will define who has the authority to approve new SaaS purchases and what level of approval is required.
- Establish financial thresholds: Determine the financial thresholds for SaaS purchases that require different levels of approval. For example, any purchase under $500 may require a different approval path than purchases over $500.
- Create an approval request form: Create an approval request form that the requester must fill out when submitting a new SaaS purchase request. The form should include information such as the vendor name, subscription length, cost, functions, and service level agreements (SLAs).
- Establish a review and approval process: Create a process for reviewing and approving each purchase request, and define the expected timeline for each step of the process. Determine the response time from the level of approver and the escalation process in case of a delay.
- Evaluate SaaS contracts and terms: Carefully evaluate all SaaS contracts and terms before purchasing. Review the contract length, auto-renewal terms, pricing structure, and performance metrics to align them with the company’s budget and financial objectives.
- Monitor and track SaaS spend: Monitor and track SaaS spend regularly using a centralized SaaS management system. This system should track all purchases, renewal dates, contract terms, and usage metrics. Tracking SaaS spend will help you establish and track key performance metrics and cost controls.
Developing an approval process for SaaS purchases is critical to ensure that new purchases align with the company’s budget and financial objectives while delivering optimal results. By defining the approval hierarchy, financial thresholds, creating an approval request form, establishing a review and approval process, evaluating SaaS contracts and terms, and monitoring and tracking SaaS spend, businesses can maintain control of their SaaS budget while optimizing spending. This process can ultimately help companies make better decisions about SaaS investments, leading to more efficient operations and better financial outcomes.
