Managing SaaS spending in a startup finance team can be challenging. They are often required to justify every SaaS dollar spent on tools they don’t directly use. To address this issue, Hudled has developed a framework for evaluating how to reduce SaaS spending. We've categorized it into three areas:
By understanding these categories, finance teams in startups can optimize their SaaS spending and reduce unnecessary costs.
Company critical tools drive a significant portion of the company's total SaaS spend. Examples include hosting services, such as AWS and Azure, and CRM platforms, such as Salesforce and Hubspot. Consider the following when thinking about reducing spending in this area:
Important for department tools account for a moderate portion of cost. They typically are the largest costs that sit within each department. Examples of these tools are Intercom for customer success and Klavyio for marketing. Commonly, these tools have overlapping features with some of your company's critical tools. Consider the following when thinking about reducing spending in this area:
Effective for employee tools are designed to enhance productivity and represent a small portion of the total budget. These tools represent a longtail of spending, and adoption can quickly spiral out of control if not handled properly. Consider the following when thinking about reducing spending in this area:
To balance cost reduction and business performance, startups must prioritize actions with the highest potential ROI. It’s the role of finance that they manage any change management or consolidation projects pragmatically, with cost being front and centre of any decision.
SaaS management is typically overlooked for startups because it's difficult to understand where the saving opportunities exist. Luckily, Hudled can do this for you without the overhead. Get started for free with Hudled and request a SaaS audit.