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3 tips for procuring software-as-a-service (SaaS)

April 14, 2020 | Emily Lambert

man looking at computer screens for procurement SaaS

As more and more work goes remote, public sector organizations are adopting software-as-a-service (SaaS) solutions more readily than ever before. From collaboration tools, to online learning platforms, to eProcurement, public agencies are investing in software that will help them run business-as-usual, even as they work from home. But the data shows that some procurement teams may still be struggling to make efficient yet informed SaaS RFP decisions.

Back in January, we produced a webinar in partnership with NIGP all about buying SaaS. We took a look at some SaaS metrics compiled from 60 SaaS procurement projects, involving 400 evaluators and 260 proposals. We found that the average evaluation time on these projects was 252 days. In contrast, the average public sector RFP takes 57 days.

These longer evaluation times for SaaS point to the fact that procurement teams may be struggling to strike the balance of making quick yet informed SaaS RFP decisions. It’s understandable that this balance is hard to hit, considering the SaaS business model has really only been popularly adopted in the last 5-10 years. But in this cultural climate where SaaS is no longer a nice-to-have, public agencies can no longer afford 252-day-long project cycle times.

We get it, with its unique business model, cloud-based data storage, and security considerations, purchasing SaaS for your agency may feel like a daunting task—but it doesn’t have to be. On today’s blog, we’re outlining 3 procurement foundations that will demystify SaaS and help you make efficient and well-informed SaaS procurement decisions that will serve your constituents even in uncertain times such as these.

Get to know the SaaS business model

Whereas your agency may have previously gained access to software after multi-year binding contracts and arduous installation processes, the SaaS business model is different. SaaS employs a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. That’s why SaaS is sometimes referred to as “on-demand software.”

For procurement teams, this shift should be a cause for celebration! When a software product is purchased and ends up not being the right fit for your agency (it happens), you’re no longer roped into multi-year—even decade-long—binding contracts that leave you helpless to change. Instead, by paying a monthly or annual subscription price, you have a lot more power to switch SaaS vendors or negotiate changes that meet your needs.

Understand SaaS vs on-premise software

SaaS is synonymous with cloud-based software. Cloud infrastructure refers to the hardware and software components—such as servers, storage, a network, and virtualization software—that are needed to support the computing requirements of a cloud computing model. The opposite of cloud-based software is on-premise software, which requires a lot of IT involvement, manual updates, and significant costs for software updates and maintenance.

To get a better understanding of the benefits of SaaS vs on-premise software, think about the Microsoft Office suite. When Microsoft Office was on-premise, you had to use a compact disc to install the software, and all your saved data from Word or Excel was stored on your computer’s hard drive. Now, Microsoft Office has migrated to a SaaS model, where no installation ins required—instead, you log in to your Microsoft account on your web browser, and your data is stored in the cloud.

Don’t forget the second “S”

We’ve covered much of the “software” part of “software-as-a-service,” and when a lot of procurement teams make SaaS purchases, they stop there. But, as a procurement professional, you can’t forget the second “S”—service.

When bringing on a SaaS vendor, you want to know that you’ll be supported through prompt and high-quality service to ensure that you get a return on your investment. Vendors are also motivated to provide the service that will make you successful so that you will continue to renew your subscription.

When looking for a vendor that will provide quality SaaS customer service, consider:

  • If you’ll be assigned an Account Manager or Client Success Manager who will get to know your unique needs and challenges.
  • If there will be on-going training so that users can become experts in the product.
  • If there will be support and training when new products or updates are released.
  • If there will be in-app product walkthroughs to enable user self-teaching.
  • If there will be user conferences and meetups (once we’re done social distancing, of course!).

There are a lot of considerations to make when selecting a SaaS vendor for your public sector agency, especially when collaborating in an online environment is more critical than ever before. We hope that some of the basics we covered in this blog post enable you to make more informed and more efficient SaaS RFP decisions. If you’re searching for a SaaS solution to bring your procurement processes online during COVID-19, Bonfire is giving public agencies free access to the Bonfire Sourcing platform until July 31, 2020. Learn more here.

About the author

Bonfire Blog Author Emily Lambert

Emily Lambert | Bonfire Interactive

As the Content Marketing Strategist at Bonfire, Emily writes thought leadership for procurement teams in the public sector. Best practices content for procurement professionals doesn’t have to be a chore to get through—which is why Emily strives to strike the balance of writing educational yet engaging content that inspires sourcing experts and equips them to make the best purchasing decisions.