You're running a growing business. To make sure everything runs smoothly and every team has the tools they need to get the job done, you start adding software one by one. 

But before you know it, you're buried under a mountain of subscriptions, managing a tech stack that’s all over the place, and watching costs spiral out of control. Sound familiar? It's a problem many businesses face. In fact, a report shows organizations waste about $18 million each year on unused SaaS licenses.

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So, what can you do about it? The answer is simple: implement a procurement strategy.
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A procurement strategy refers to the approach businesses use to acquire the right resources, products, or services in the most efficient and cost-effective way. For a SaaS business, this means carefully selecting, negotiating, and procuring SaaS tools that fit your needs without blowing your budget or wasting resources.
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To learn more about procurement strategies, what they are, and how to build an effective one, keep reading.

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What is a procurement strategy?

A procurement strategy is a plan that outlines how a business identifies, selects, and acquires the goods or services it needs. It focuses on factors like cost, quality, vendor relationships, security, compliance, and integrating the right solutions to meet organizational needs while managing overall spend.

Types of procurement strategies

A company’s vision influences its approach to automation, risk management, or procurement outsourcing. It lays the foundation for long-term procurement goals.  

Let’s take a brief look at some procurement strategies, especially for SaaS companies:  

1. Cost reduction

A recent survey we did showed that about 40% of the organizations spend over a million dollars on SaaS and the procurement process may even stretch over 60 days. Imagine how much a dedicated team with the right tools and strategies could achieve with all those resources!

This is why many businesses consider SaaS costs a primary factor in procurement. They have strategies to ensure that seemingly small costs for different SaaS solutions don’t pile up to become a huge problem in the future. 

Some of these strategies include negotiating better pricing, consolidating software purchases to avoid redundant tools, and setting clear budgets to keep track of all their spending.
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2. Green purchasing

The sustainability market has one of the highest CAGRs, about 23%, and can reach up to $26 billion by 2026. 

As Vishal Patel, VP of Producement Marketing at Ivalua, puts it, "Sustainable procurement at the organizational level involves integrating Environmental, Social & Governance (ESG) factors into procurement policies and processes and collaborating with suppliers according to sustainable strategies."

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This concept is increasingly relevant when choosing the right SaaS tool. Much of this investment is going towards green data centers to reduce the overall carbon footprint. Many organizations procuring SaaS solutions place great importance on it due to rising environmental consciousness and resulting regulations in the developed world. 
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3. Risk management
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The way any organization handles its risks can either make or break them. When it comes to SaaS tools, risks come in many forms, like security threats, compliance failures, vendor instability, and integration challenges.
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A well-thought-out risk management strategy helps organizations identify risks early on, assess their potential impact, and find ways to reduce or eliminate them. For example, businesses may choose vendors with strong security measures and relevant certifications to protect sensitive data. 
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They may also conduct thorough due diligence on a vendor's reliability and track record before making a purchase. By actively managing these risks, organizations can make smarter decisions that protect their long-term interests and avoid costly mistakes.
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4. Total quality management
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The main idea behind total quality management (TQM) is how the entire organization combines its efforts toward improving the quality of the existing products and processes. The same approach can help with procurement as it helps determine the overall effect of a particular purchase and how it’ll help in the grander scheme of things for the company. 
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For SaaS procurement, this means evaluating vendors not only on cost but also on the value they bring to the table. It involves evaluating the quality of the tools, the user experience, the support services, and how well the tools integrate with other systems. 
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The focus is on long-term success by choosing tools that fit your company’s needs now and in the future, and that help improve business processes as you grow.

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5. Vendor management and optimization
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We often hear how important spend management is and how businesses can catapult themselves to the top by maximizing their revenues and minimizing their costs. However, spend management alone can take you so far. The next step to success is effectively managing vendors and optimizing the existing processes. 
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A simple yet powerful way to do that is by ensuring invoices are paid on time and accurately. It might seem like a small detail, but it goes a long way in building trust and improving vendor relationships. Strong vendor management also leads to better contract terms, smoother negotiations, and long-term success.
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This can be a great procurement approach for businesses that have been around for a while. They are usually past their turbulent phases and can now focus on improving their processes and moving towards sustainable growth. 

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6. Digital transformation

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Gone are the days of managing procurement with clunky spreadsheets. Today, businesses need smarter tools to stay competitive. SaaS procurement platforms help by centralizing vendor management, automating tasks, and tracking budgets in real time. This not only saves time and reduces costs, but it also helps manage risks, ensure compliance, and support sustainability. Most importantly, it gives businesses better control and visibility over their operations, helping them make informed decisions and improve efficiency.
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Airmeet saved both time and money by optimizing its SaaS procurement process. Learn how!

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7 steps to creating an effective procurement strategy 
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The first step in creating a strong procurement strategy is understanding your spending. You need to know exactly where your money is going and whether each expense is truly necessary.
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Start by gaining control over your shadow IT costs and evaluating the importance of every purchase. By using a spend management tool, you can gather detailed data about your organization's expenses, giving you a better understanding of your financial picture.
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Once you have this clarity, follow the steps below to build a more effective procurement strategy.
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1. Determine business needs
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Your business doesn’t need every single tool under the sun. Too many SaaS tools can lead to SaaS sprawl. 
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Before deciding on the approach, it’s important to address the business case for any particular solution, especially for SaaS. Questions about the expected ROI, business needs, and the overall effects of a particular strategy should be answered.  

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2. Assess market conditions
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Just like it’s important to determine the business needs, you also need to check the current market situation. This technically is a part of the previous step as a market assessment is a part of the business case. 
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For SaaS procurement, a clever way to assess a tool’s compatibility with the market is to look at the pricing structures. You’ll often find multiple SaaS tools competing through the prices they offer and their delivered value.
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While there are many ways to study the market effectively, a lot of business leaders rely on the following:
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• Porter’s five forces
• A PESTEL analysis
• A SWOT analysis

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It’s important to keep in mind that market conditions can change very quickly. So, this is a continuous process and requires you to remain updated all the time. 
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3. Set clear objectives
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Many businesses set out to do everything all at once. It’s essential to create clear, concise, and realistic objectives based on importance and monitor them through KPIs or any other system that works for you.    
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4. Define Procurement Policies

You now have the objectives in your mind along with their business case and desired needs. It’s time to establish clear policies based on those objectives. One of the best ways to set up the best policies is to use an incredible methodology behind SMART goals. 
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You must have heard about it. SMART is an acronym that stands for: 

• Specific
• Measurable
• Attainable
• Relevant
• Time-bound

With the right strategy in place, you can focus on the grander scheme of things and work on things like procurement automation and reduction of procurement risks. 
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5. Outline a procurement strategy according to your needs
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There are hardly any one-size-fits-all strategies or approaches in business. The procurement approach and policies you come up with need to consider the specific intricacies of your business. It’s standard in the industry to use specific examples as a case study and base your strategies on that. SaaS procurement is no different, but you have to make sure that whatever you are doing would be the best fit for your business. 
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6. Develop a digital procurement strategy
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Digital transformation is essential for the survival of any business in the modern world. Especially when we are talking about SaaS, opting for a digital strategy no longer remains optional. 
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7. Execute, manage, and refine the strategy
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Policies or strategies we develop are not set in stone. Modern businesses are dynamic, and it’s imperative to iteratively improve everything and optimize the existing processes for continuous performance.
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Final strategy: Let Spendflo handle SaaS procurement‍

Spendflo helps you save up to 30% of your SaaS costs through unrivaled techniques that will automate your processes, curb shadow IT, and give you effective control over your IT budget. 

We offer multiple services ranging from assisted buying to vendor analysis, contract management, and automated approvals. We have helped improve our partners’ ROI to 15x through process optimization, better contract management, and tailored suggestions for better SaaS alternatives. 
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Interested in Maximizing your Margins? Get a free analysis today!