Artificial Intelligence brings an armada of features, ranging from Natural Language Processing(NLP) and optical Character Recognition(OCR) to, of course, the contextualizing abilities of large language models (LLMs). 

While AI is still in its nascent stage within the procurement space, some of its key capabilities are already being fully utilized. For the State of SaaS Buying 2024 report, we surveyed 130+ leaders and dedicated an entire section to understanding how leaders are looking at AI and the challenges they’re looking to address with it. This blog expands on our learnings.

The (Broken) State of SaaS Buying and Management in 2024

Procuring and managing SaaS tools is challenging for most organizations. The issues can be summarized as follows:  

Stage 1: Procurement

• Long procurement and renewal cycles
• Opaque pricing and hidden costs
• Data scarcity

Stage 2: Spend Management

• Inefficient utilization and license management
• Integration complexity and data silos
• Lack of centralized visibility and control

Addressing these issues is a long, arduous (often manual) process that can easily get overlooked.

The AI effect

Organizations are benefiting from increased efficiency and cost savings, with tasks that used to take half a day being completed in minutes.

In an era where AI investments also pose a huge possibility of being sunk costs, SaaS procurement and spend management is growing rapidly as a space that can not only accommodate but also nurture efficient and effective processes.

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The numbers - where companies stand today

Here are some key insights that we got: 28% of respondents in the State of SaaS Buying Report, 2024,  are actively using AI in their SaaS buying and management processes.

7% of respondents mentioned that they are investing over $200k in AI to enable cost and process efficiency, and the number is only increasing—for this number has doubled in just one year.

The survey highlighted that AI is more than a buzzword in SaaS procurement; it can improve and optimize current processes.

What are these?

The most popular AI-use cases for procurement and SaaS spend management: 

License management has emerged as the most popular use case - with 20% of respondents identifying the benefits of using a data-backed approach to analyzing the usage of tools within their organization among other processes to empower quick decision-making and more efficient resource allocation. 

This was followed by contract review and approval(11%) - and for the right reasons. Contract review in environments where organizations handle both physical and digital documents can be chaotic, tiring, and most importantly - time-consuming. An OCR-powered system that can extract data from contracts, tabulate it, and explain it to anybody could potentially save an organization 100+ hours and of course, quite a few zeroes on a cheque. 

AI Chatbots have been in the picture for a long time now - an NLP powered chatbot could help procurement teams, finance teams and employees gather real-time data about their SaaS stack. Additionally, they could provide responses and context to automate their workflows. 

Learn how Spendflo is changing the DNA of SaaS spend management with AI.

What does this mean for the future?

The intersection of AI with SaaS procurement and spend management is not just a fleeting trend; it's a transformative shift that is reshaping the landscape of business operations. 

AI today stands as an indispensable ally for CFOs and procurement teams. The key decision makers realize this as well - for a closer look into how companies are looking forward to using AI in their procurement and spend management processes, and how much leaders are investing in AI - Download the State of SaaS Buying Report, 2024 now!

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