According to new research, business leaders are getting stuck in software contract management, wasting hundreds of hours a year.
Vertice analysis shows that companies are wasting 26 hours a month in meetings simply to purchase or renew SaaS products; equivalent to 385 hours each year.
This means that employees in charge of purchasing, managing and renewing SaaS contracts at work (from Salesforce and Canva to Xero) spend more than half of their work year doing so.
Analysis of 1,000 companies worldwide found that senior finance and technology leaders are losing the most time in these lengthy purchasing and renewal processes, with 30% of contract holders at the management level and a 29% at director level.
“It is particularly concerning that the burden of contract management is hitting those in senior positions the hardest,” said Eldartuvoy, CEO and founder of Vertice.
“Finance and technology leaders need time to focus on high-value strategic initiatives rather than getting stuck in endless meetings and email chains to purchase and renew software.”
On average, companies have 126 active SaaS contracts at any given time and renew an average of five each month. Each of these requires meetings, emails, informal chats, demos, Zoom calls, and back-and-forth negotiations, as well as the involvement and approval of legal, IT security, and financial teams.
And those 126 SaaS contracts do not include 'shadow IT': the use of software, services and devices that have not been authorized. Eight in ten workers admit to using shadow IT, which means there are many more contracts on the table that require management, the study notes.
Purchasing a single piece of software takes employees an average of 100 days, Vertice said, while renewing a SaaS license takes an average of 60 days end-to-end. Three offers are presented for each new software, while there are 2.8 meetings per process on average, 8.6 emails for a renewal and 5.2 emails for each new purchase.
Meanwhile, legal teams take approximately seven days to verify SaaS contracts, and internal decision-makers move slowly due to unexpected delays, emergency shutdowns, and even U-turns.
“As most companies focus on reducing costs and increasing efficiency, our research shows that the task of managing SaaS and cloud spending represents a serious threat to business productivity,” Porquey said.
“We call on businesses to recognize the hidden cost of SaaS and the cost that contract management can have on employees. Businesses seeking productivity gains should look to reinvent their software management processes and leverage technology which makes the purchase and renewal of software easier, agile and efficient.”
