Issue #2: The end of software negotiation

In Issue #1 of Buy Better, we discussed how the internet has fallen short in helping us make smarter purchasing decisions.

It’s flooded us with information—and left us exhausted by decision fatigue.

But category by category, companies are solving this problem.

In this issue, we’re focusing on the software space:

If you’ve ever had to purchase enterprise software, you know it can be quite a hassle. Even if you’ve already identified the software you want, the journey often looks something like this:

1. Visit the vendor’s site (e.g., SAP, Oracle, etc.).

2. Navigate to the pricing page. You’ll either notice there isn’t one, or, when you find it, it just says “talk to us.” No pricing.

3. Book a demo. Whether you want to or not, this is often the next step.

4. Attend the demo. On the demo call, you might not even get a full product walkthrough. There’s also a slim chance you’ll get a price.

5. Follow-up calls. Meeting after meeting, the sales team digs into your problems to figure out how much to charge you.

6. The pricing chat. Finally! But is the price negotiable?

7. Negotiation. Back and forth.

8. Contract sent and redlines. More back and forth.

9. Signed. Finally.

Exhausted? You’re not alone. And remember, this was assuming you weren’t trying to compare similar offerings from multiple vendors!

After all those meetings, it’s still unclear (1) whether you’re getting the vendor’s most competitive pricing and (2) how the vendor’s pricing and product compare to the competition.

It’s a total schlep.

Source: Vendr.com

Several companies have taken this challenge head on by building software to arm you with pricing intelligence and automate away the hurdles of software procurement.

Here’s how they do it:

• Benchmarks: these platforms aggregate and analyze pricing data from a wide array of companies, giving you insights into how much different organizations are paying for similar software. With access to this vast dataset, they help you understand the market rate for the software you’re interested in—helping you avoid overpaying.

• Contract analysis: ever feel overwhelmed trying to make sense of legalese in vendor contracts? These tools offer contract analysis that identifies key terms, conditions, and potential pitfalls, helping you secure favorable terms while avoiding costly surprises.

• Negotiation-as-a-service: instead of going back and forth with a vendor’s sales team, these platforms do the heavy lifting for you. They leverage their industry knowledge and negotiation expertise to secure the best price and terms on your behalf.

• Consolidation: many organizations unknowingly pay for redundant or overlapping software tools. These platforms analyze your current software stack and highlight opportunities to consolidate tools, saving you money and streamlining your processes.

• Intake Management: managing requests for new software tools across departments can be chaotic. These platforms provide a centralized intake system, ensuring all software requests are funneled through the proper channels and meet internal requirements before moving forward.

• Approval Workflows: say goodbye to manual approval chains. These platforms streamline the approval process by automatically routing purchase requests to the right stakeholders, expediting the decision-making process.

• Renewal Management: never miss a renewal date again. These tools track contract expiration dates and provide reminders well in advance, giving you ample time to reassess contracts, negotiate better terms, or cancel unused subscriptions.

• Vendor Management: keeping track of vendor relationships is challenging. These platforms help you manage all of your vendor interactions, including contract terms, performance metrics, and support tickets—all in one place.

Vendr and Tropic are the two dominant players in this space. While Vendr has gone deep on SaaS procurement, Tropic has chosen to pair their SaaS pricing intelligence with a horizontal spend management platform. Meanwhile, Ramp leans even further into spend management, but still provides valuable insights on how to consolidate software purchases and find savings.

Here’s an overview of each:

Vendr is a SaaS marketplace and procurement platform focused on eliminating friction in the buying process. It helps companies purchase software faster by giving them real-time pricing intelligence and handling negotiations for them. Vendr also offers renewal management, ensuring businesses don’t overpay or get locked into unnecessary long-term contracts.

Tropic provides a similar suite of services, offering companies access to market pricing data, software procurement expertise, and contract negotiation support. They’ve also built an intake-to-procure solution to help companies control not only their software spend, but also contractor services, hardware, and any other major purchases they make. (we’ll be examining intake-to-procure solutions in a future issue)

While Ramp is best known as a corporate card and spend management platform, it also has a powerful procurement solution. Ramp focuses on optimizing software spend by identifying cost-saving opportunities, automating approvals, and providing visibility into software utilization. It’s particularly strong for businesses looking to consolidate finance and procurement workflows.

In conclusion, all three of these solutions are bound to increase your visibility into software spend and help you identify savings. We were not compensated or prompted to write this about any of the companies mentioned, but we believe these tools can make a difference.

If you liked this issue and want to get monthly tips to help you buy better, hit “Subscribe now” below.

Want a similar product to take indirect spend off your plate? Check out Response.