The imminent study by Vertice—world's sole integrated SaaS and cloud spend management platform—revealed staggering inefficiencies within the domain of software contract management. Labelled as "Beyond the Numbers," and based on a survey of 1000 businesses globally, it exposes that businesses are squandering away as much as 385 hours in meetings annually for Software as a Service (SaaS), with the primary burden of software contracts being borne by senior figures in finance and technology fields, who collectively spend 61% of their working year on buying, managing, and renewing SaaS contracts at work.
Navigating shortcomings within the realm of software management, the research found that businesses are having redundant meetings to buy and renew software contracts, consuming 385 hours every year. With an average of 126 SaaS contracts concurrently in operation within an organisation, the matter compounds even further. These contracts stretch out over popular platforms such as Salesforce, Zoom, or Xero, and do not include the widely-accepted Shadow IT, which refers to any unauthorised use of software, services, and devices at work.
The negative impact of purchasing and renewing software contracts has been highlighted within the study, which demonstrates that acquiring a single piece of software takes an average of 100 days, whilst renewing a SaaS license takes around 60 days. To put things into perspective, Vertice pointed out that if a purchasing and renewing process were to happen continuously, 61% of a worker's working year would be dedicated to software contract management processes.
Jarring inefficiencies within the software sphere are mostly affecting senior leaders within finance and technology sectors. An analysis of companies revealed that these departments have the highest percentage of software contract owners, with 36% and 32% concentrations respectively, leaving them disproportionately burdened. Furthermore, it was discovered that around 30% of the software contract holders sat at manager level and 29% at director level.
The administrative dimensions of contract management pose another significant challenge for businesses. As each company is renewing an average of five contracts each month, this requires excessive time investment in meetings, email communications, informal chats, product demonstrations, video conferencing and negotiations. Additionally, the process often includes involvement and approvals from company’s legal, IT security, and finance teams, adding to the administrative load.
Furthermore, Vertice discovered that with every acquisition of new software, there are typically three bids submitted which require additional meeting time, communications, and product demonstrations.
Vertice’s CEO and founder, Eldar Tuvey, underlines the gravity of the findings, emphasising that the duty of managing SaaS and cloud spend significantly threatens business productivity, especially burdening senior-level professionals. "Finance and tech leaders need the time to focus on high-value strategic initiatives rather than being stuck in endless meetings and email chains to buy and renew software," Tuvey noted. He urges companies to acknowledge and tackle the hidden costs of SaaS and the toll that contract management can have on employees, suggesting a reinvention of their software management processes towards efficiency and cost-effectiveness.