Zylo

It's high time to stop overpaying for SaaS. Learn how to translate Zylo's usage and benchmark data into leverage for securing the best possible price on your SaaS renewals. Join our session and maximize your savings!Speaker: Dylan Margonari, Sr. SaaS Services Manager at Zylo

It's high time to stop overpaying for SaaS. Learn how to translate Zylo's usage and benchmark data into leverage for securing the best possible price on your SaaS renewals. Join our session and maximize your savings!

The Benchmark Advantage: Optimize SaaS Renewals and Save Big

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SaaS is the future of software, the foundation of the hybrid workplace and the cornerstone of employee effectiveness.If you are an IT, Software Asset Management, or Procurement professional or executive looking to harness the power of your SaaS,&nbsp;optimize your investments, save money, and grow your business, check out these sessions from SaaSMe - the Enterprise SaaS Management Event powered by Zylo.

SaaSMe - The SaaS Management Event

Dylan Margonari: Welcome to the breakout session. This one, we'll be talking about the benchmark advantage and how to optimize SaaS renewals and save big. My name's Dylan Margonari. I'm a senior SaaS manager here at Zylo. I've been in procurement for the last six years, and I've been a SaaS manager here at Zylo for the last three. I've been working with customers to stand up the renewal management program as well as help negotiate their renewals.Dylan Margonari: Session agenda today, first topic we'll dive into is really setting the stage of why renewals are such a headache in the first place, and then we'll dive into really laying the framework and defining a programmatic renewal management process, before we dive into the more nitty- gritty topic of what everyone's here to learn about is the power of usage and benchmark data for renewals. Then we'll actually dive right into the Zylo tool and we'll jump into a demo, and I'll show you the and greatest features of our benchmarking tool. And then finally, we'll end the session with a few customer stories and how they were able to say big by leveraging benchmarks.Dylan Margonari: So why are renewals such a headache? We got three main focus areas here, first of which is there's a lot of them. On average, we're seeing 200 renewals per year, and for larger organizations, it's well over that. And also, 86% of the spend is tied up in existing contracts. So if you don't have an idea of where those contracts are housed or have those contracts on hand at all, it's going to be really challenging to know when they're coming up for renewal and manage them on a weekly, monthly, quarterly, annual basis. Second point there, vendors are raising prices.Dylan Margonari: So, on routine, on average, we're seeing between 10 and 15% increases on a renewal that's remaining flat, meaning license counts remaining the same, you're purchasing the exact same features and products as you were utilizing last year, but they're just tacking on additional cost of 10 to 15%. And then we have the macro side of things, which definitely impacts pricing. It's upwards of 30 to 40% increases last year during the macro economy when we saw headwinds everywhere for anyone in the tech realm. And then the final point there, it's really easy to overspend. Gartner projects 25% overspending in the SaaS category for a few reasons. It's really easy to get your fingertips on a SaaS software licensing tool. It's basically as easy going to a website, punching in your credit card information for the licenses they need, and boom, your tool's right there at your fingertips and you're ready to utilize it. Didn't go through any rigor, any process approvals or anything like that of that nature. So it's just really easy to get these tools if you don't have a process that your employees are following on a daily basis.Dylan Margonari: So now let's dive into how we stand up a programmatic renewal management process. So, on the left there, before we even get to the Zylo renewal alerts, it's really important to understand your inventory, so your entire SaaS portfolio, and discovering every single tool that's being utilized in your organization today, which can be a very big challenge. And obviously, here at Zylo, this is where we, our expertise is in, is really discovering and making sure our customers are aware of everything SaaS related. So once you have that inventory of SaaS tools, now you got to really understand and source all of the contract detail for all of those SaaS applications, so you can understand costs, license count, end dates, auto- renewal clauses, cancellation timings, things of that nature, so that you can prepare for it and be ready to act and be proactive before the renewal comes. So once you have that renewal calendar built within Zylo, you can go ahead and set up Zylo renewal alerts. Set them up for all applications 120 days in advance so that you can set that alert and forget about it, and Zylo will do all the work on the backend, making sure that you get a notification 120 days in advance that, " Hey, you got Asana coming up 120 days. Let's start proactively looking into this renewal and understanding what we need to purchase." So that's what's going to take place, between 120, 90 days in advance is reaching out to your application owners, your business owners of each and every tool and really understanding, " Hey, one, do we still need this tool? Are we getting the value that we expected? Are we getting the adoption from our users, so on and so forth?" And then also running a license management workflow to reclaim any underutilized licenses from folks who have purchased a license, but they're not utilizing it. So let's reclaim that and save dollars on the renewal.Dylan Margonari: And then the third point there, 120, 90 days advance is really understanding if there's any redundancy tools within your stack. So, if you have two project management tools, really looking into both of them and understanding do you need both or can you get by with just one and cancel the other one completely, and hopefully reclaim some money there. So after you understand all this information, drill down into everything with your application and business owners, you're going to want to initiate that conversation with the vendor, typically 90 days in advance. If you can do it earlier than that, great. You want to start these renewals as early as possible. That's the biggest piece of recommendation that I would give anyone on this session today.Dylan Margonari: So once you kick off that conversation with the vendor, you're going to want to obtain a quote for that renewal. And then once you have that quote, if you have the benchmarking tool within Zylo, go ahead right into that tool, punch in the tool, the license type, the volumes. We'll dive into that during the demo, but understand, is that price point fair compared to other cohorts or other customers similar size to you? Are you high, are you low? Are you right in the middle, average price point? This is going to be a very, very nice data point for you to go into the negotiation with the vendor, which typically happens between that 90 and 60- day point before the expiration of the subscription. Definitely leverage that benchmarking data, especially if you're on the high end, you're overpaying for a tool, based on your size and the volume, the license type that you're purchasing. Leverage that, push back on the vendor and try to save that money.Dylan Margonari: And then finally, once you come to a final agreement with the vendor, pushing it through your approval process, and then hopefully executing that renewal by the renewal date. So now we'll dive into the power of usage insights and benchmark data for the renewals. First item here is the portion of the benchmarking tool, called Benchmark Popular Applications. So there's two main use case for the popular applications, and typically this process, or we would recommend as a best practice of kicking off this review six months to 12 months in advance of the renewal. So those two use cases are net new purchases or, if you're transitioning away from a current tool in your stack to something different. So what popular application benchmark is, is you'll be able to search within our tool, based on category, subcategory, functionality of a tool. And Zylo will spit back the top five applications that we're seeing in any of those categories or functionalities. So it's a really useful insight and a really useful tool for, if you're looking for a new project management tool. This is the first time you're purchasing it, you just don't know where to start, and you want to understand what's the best in breed within that functionality.Dylan Margonari: So starting point here with Zylo, then you can go off and evaluate those five vendors and choose the best one that meet all of your requirements. The second use case there was transitioning from an old tool to a new tool. So, in an example here, I'll use NetSuite. This is obviously a huge tool, typically requires six to nine months implementation or stand- up time for any tools within this category. So again, starting this process ahead of time and utilizing popular applications to understand, " Okay, we don't want NetSuite anymore, we want to look at something different, what else is out there?" So obviously utilizing that piece of the product to understand the market and where to go from.Dylan Margonari: And then once you've had an evaluation period with these new vendors, obtaining a quote, and then benchmarking that quote. So using the price benchmarking feature to get a pulse on budget. And any finance folks on this call will definitely attest to this, that they will love you if you can give them a heads- up of what a new tool is going to cost or what a change from an old tool to a new tool, what that difference is going to be. Are we going to save money? So definitely leverage both of these features if you're in any of those scenarios of looking for a new tool or transitioning away from an old tool.Dylan Margonari: Next... here is conducting a usage review. So I know we touched on this in the timeline slide previously, but this typically happens 90 to 100 days prior to a renewal. This is typically when you're reaching out to the application owners, the business owners to understand, "Hey, do we still need the tool," and really understand the license count that they require for the upcoming renewal? Is it going to stay the same, is it going to reduce? Is it going to expand? The great thing with Zylo is we have this, we're able to capture this utilization metrics via a few different channels. Usage Connect, which I know it's probably covered in a different session of SaaSMe, but we have Usage Connect, direct integration, and then the third one is SSO. So utilizing that, those metrics to understand, " Hey, if we purchased 300 licenses last year, are we actually seeing 300 licenses still being utilized?" Leveraging this data to run a license workflow to hopefully reclaim any inactive users before moving forward with renewal. At the end of the day, this is going to help us save money and really just clean up your entire SaaS portfolio from an application standpoint. And, one, make finance happy, because we're saving money. Also lighten the load from IT perspective so that they have a clear visibility of who's actually utilizing the tool on a daily basis.Dylan Margonari: Finally, the last piece here is benchmark pricing. So this typically happens 60, 90 days in advance or whenever you get a renewal or quote, for that matter, for any application. Leveraging this part of the benchmark feature, it's a goldmine to any procurement or financial mind. So it just gives you that data at your fingertips and allows you to leverage the data and make sure you're not getting, or you are getting favorable pricing for all the tools that you're purchasing, and just gives you that data point to push back and feel confident when you're pushing back against vendors who are overcharging you on any license or subscription. Awesome.Dylan Margonari: So let's actually dive into Zylo and give you a quick demo and rundown of what benchmark looks like. I just navigated over to Zylo. Obviously, we got the new UI here. Looking great here. So, to get to benchmarks, you're going to be in the analytics section, and then you'll want to move down to benchmarks. So I'm going to trim down the screen just so we get more real estate here. The first section of benchmarks is portfolio benchmarks. We didn't cover this on any of the previous slides, but want to give an overview to this section. And it's just giving you a high- level overview to your SaaS stack. So it's going to spit back, on average, based on similar size cohorts or other customers purchasing Zylo, where are you shaping up from an annual spend perspective? Total number of applications, new applications added in the last 90 days, and expense spend. So it's just going to give you, again, an overview of how you stack up against other customers that are similar size and similar nature to you.Dylan Margonari: Now, for the other section here, popular applications, which we touched on already, I'm going to go through a quick example. So on the far right- hand side, you'll see filters. Again, you'll be able to leverage and filter based on category, subcategory, functionality. These are all based off of a taxonomy that Zylo assigns to any application out of the box, and it can be adjusted or changed by any of the customers, how they see it may fit. But, for this example, we'll use functionality and we'll use an example of project management tools.Dylan Margonari: So let's say you're currently utilizing Jira as your project management tool and you're having issues with it. You don't really love the UI and you're planning to explore other project management tools before your next renewal. This is the best way to leverage this portion of the tool, popular applications. We punched in project management and it spit out five different options here. So you can see we got Propel PLM, ASEAN cloud, Jira, which you're already on, is in the top there, Jama, and Asana. So now you have a better understanding of what the market has to offer and the best of breed within this space, and allow you to go evaluate some of these other tools and, hopefully, make a better decision for the next project management tool that you're moving on to. Now, the last section here is price benchmarks, which I'll admit, as a procurement professional, this is a gold mine to me. I use it on daily basis for all of my negotiation customers. It just gives you this data point at your fingertips and allows you to negotiate the best possible price for any renewal.Dylan Margonari: So, for this example, I am going to go with Asana. We'll move it down to enterprise licensing. We'll say we're at 200 licenses and we're paying 500 per license, per year. We're going to click configure. Zylo will do its magic on the backend, and boom, we got this data point, $ 500 per user, per year, for 200 enterprise licenses is over the average price point.Dylan Margonari: Okay, so that's a great data point, but what price point should we push for? So we'll just play around with this number. We'll type in 450, configure. Getting closer, but we're not, we're still on the above average side. So let's type in 400. We're on the bottom side of the average. We're below average there. So this could be a great target for us to push for during that negotiation with Asana. Awesome. So let's dive back into our slideshow.Dylan Margonari: To wrap things up, I definitely want to go through some customer use cases, some customer wins, and how they really leverage benchmarks to save big bucks during their renewals or net new purchases. So the first one on the left here, this was one that I was actually involved with. But one of our customers was purchasing a financial planning tool. It was a net new purchase. The initial offer came in 20% over market, and it did take multiple rounds of negotiation, but we did leverage benchmarking data. That's where we got the 20% over- market figure there. But, at the end of the day, I want to say this went through three or four rounds of negotiation.Dylan Margonari: Our final result, we actually pushed them below that 20% and we got to 25% reduction, which resulted in 140K in cost avoidance for this net new purchase, for their financial planning tool. The middle one there, we have a few examples for one of our customers, SADA. So they were able to secure 15% discount on a messaging and collaboration tool. They also were able to negotiate a 20K savings on a new contract, with an application tracking system. And then finally, they netted 58K in savings on a contract for diagramming and content creation tool.Dylan Margonari: So a number of successes here from SADA. They're loving benchmarking, and they're saving a bunch of bucks here, too. Redis, another one of our customers. We have three examples here. They were able to save 58K on a Salesforce renewal for 36- month term. So big one there. Salesforce can be a trickier one to negotiate with, but when you have benchmark data at your fingertips, it makes it definitely a lot easier. Also, they negotiated a 20% discount on a Freshworks contract.Dylan Margonari: And then in total, they were able to reduce their spending by 11%, 674K through FY22 to FY23. So a lot of money that was generated through usage insights and benchmarking by all of these customers here. Definitely, if you're not leveraging benchmarking today and you are a current customer of Zylo, and you're interested in this, you'll be able to spin up a conversation with your strategic account executive to dive deeper into a demo, if necessary, or if you're just interested in benchmarking, in general, they can help guide you in that conversation.Dylan Margonari: So we'll round things off with some key takeaways. So, first and foremost, put a process in place to efficiently manage your renewals. Like I said, there's so many renewals out there for any organization. It's impossible to manage these without visibility into contract renewal dates. And so, by putting in a process, end- to- end process, it's going to allow you to be more efficient as well as help you manage and save dollars during these renewal conversations. Start the renewal process as early as possible. I know I have 90, 120 days in advance of your renewal date, but if you're able to start it earlier than that, it's going to help you give you more time to leverage different negotiation tactics, maybe even explore an early renewal that could be fruitful and different incentives or discounting.Dylan Margonari: If you only hear one thing through this conversation, please take that away of starting these renewal conversations as early as possible. Take advantage of Zylo usage insights and workflows, right size your renewals. The days are gone where we're just purchasing based off of, " Hey, Johnny said we need 50 licenses." Now we have that data at our fingertips to drill into those 50 licenses, understand how many of those licenses are actually active, being utilized, and are required. So definitely leverage this, send out workflows, right size your renewals before they come up, and so you feel comfortable with that license count at the end of the day.Dylan Margonari: And then finally, make more intelligent decisions based off of benchmarking data. So again, if you're looking for a new tool, leverage that popular application data to understand what are the best- in- breed applications out there to start your evaluation process, and then leverage price benchmarking. Anytime you have a quote- in- hand renewal, net new purchase, really make sure and hold that vendor honest to make sure you're getting the most favorable pricing possible for any SaaS application that you're purchasing.Dylan Margonari: Well, that's it for me. I appreciate the time. And again, if you're interested in benchmarking, the benchmark feature in Zylo, please reach out to your strategic account executive and they'll help guide you through that process. Thank you.