When to Introduce SaaS Spend Management with Cledara co-founder and COO, Brad Van Leeuwen
Highlights from the Metrics that Measure Up Podcast with Brad Van Leewen
Welcome to The Metrics That Measure Up newsletter! Today’s newsletter continues the focus on our series of conversations and the associated insights and discussions from industry experts in the field of SaaS spend management. Recently, we had the pleasure of hosting, Brad Van Leewen the co-founder and COO of Cledara on the Metrics That Measure Up podcast.
Evolution of Spend Management: A Closer Look
In our conversation with Brad, we discussed the evolution of spend management, both in general and within the SaaS industry. Spend management is a process through which companies can ensure the allocation of their capital to operating expenses outside of human resources maximizes business impact. As we entered 2023, spend management has become more relevant than ever, particularly for B2B SaaS founders, CFOs, and go-to-market executives who are once again prioritizing operating margins and profit.
Brad highlighted two key factors contributing to the increasing importance of SaaS spend management. Firstly, accessibility to spend management tools has improved across all categories of software, enabling companies of all sizes to leverage these tools to compete in the global market. Secondly, the rise of cloud technology has empowered employees to choose the software they prefer for their work on a distributed basis, creating the need and thus an opportunity for better and more modern software solutions, including spend management tools.
Implementing a Spend Management Program: Insights from a CFO Perspective
In the early stages of a company's life, the primary focus is on core activities such as software development, early customer identification, customer feedback, and of course, proving the revenue model. However, as the company grows and scales, there comes a point where processes and controls need to be established to ensure efficient operations, including expense controls and SaaS spend management.
Typically, when a company reaches around 20 to 30 employees, it becomes important to consider a general spend management tool to handle the increasing expenses. This tool allows for more cards and greater flexibility beyond relying solely on the founder's credit card. As the company continues to grow, especially around the 50-employee mark, implementing a comprehensive spend management program becomes essential to maintain control and visibility over all expenses, particularly in relation to SaaS spend.
Controlling SaaS Spend in Fast-Growing Companies: The Role of Cledara
Cledara specializes in providing end-to-end solutions for spend management. Their platform offers a seamless journey for businesses, from software selection and approval processes to payment, renewals, and ongoing management. Cledara's unique capabilities include real-time detection of all software being used across the company, even in decentralized work environments.
By providing visibility into software usage and spend, Cledara empowers employees to make informed decisions while ensuring control and preventing excessive expenditures. With their extensive data on software usage patterns from thousands of companies, Cledara can assist in software selection based on specific company characteristics, enabling data-driven decisions.
Vendor Negotiations and Impact on Vendors
As spend management becomes more prevalent, SaaS vendors may begin to encounter scenarios where customers introduce spend management partners during renewal negotiations. While this may seem concerning, Brad explained that having a robust spend management process in place benefits vendors, as with customers, they will often be required to highlight the utilization, user satisfaction, and value their solutions are delivering to customers. Using the insights on spend across categories and by all suppliers regardless of purchasing process used to acquire the SaaS tool, companies can now negotiate with vendors more effectively and efficiently, by identifying opportunities to increase product utilization, reducing operating expenses and thus improving operating margins.
CFOs, with the support of spend management tools like Cledara, can navigate negotiations by leveraging data and implementing standardized processes. This streamlines decision-making and accelerates the overall buying and renewal process, benefitting both vendors and customers.
Learn More:
As SaaS spend management utilization becomes more prevalent across the SaaS industry, companies will find it much easier to optimize their capital allocation, control expenses, and empower employees to choose the software that best suits their needs. If you want to learn more you can listen to the full episode by clicking here!
Stay tuned for more updates and interviews with industry experts in the rapidly evolving SaaS spend management category!
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