The world of white-collar work has changed more in the last three years than the last 30.
In a flash, teams have embraced remote work – some entirely, others hybrid. And this has led to a surge in software spending to facilitate collaboration.
According to Gartner, global IT spend is expected to hit $4.6 trillion in 2023, up 5.1% from last year. This accounts for a massive amount of company revenue – 18% on average.
But there’s a problem.
US companies waste $30 billion a year on unused software
Read that again: US companies waste $30 billion a year on unused software.
It’s staggering.
Even in the best of times, that would be a disaster. These are far from the best of times.
Inflation is soaring and a recession is looming.
In the last few months alone, we’ve seen mass layoffs from:
Amazon – 18,000 people
Meta – 11,000 people
Salesforce – 8,000 people
HP – 6,000 people
And more.
But as companies look to save by cutting payroll costs, reducing office space, and shrinking advertising budgets, the amount wasted on unused software gets forgotten.
Why?
One word: Visibility
The good, the bad, and the ugly of intake management
Most procurement teams are very skilled. But they lack the resources they need in one key area: the ability to source their goals.
Here’s what I mean. You’ve got goals. You’ve got a role that needs to hit those goals.
One of the goals we hear all the time from procurement folks is preventing duplicate software being brought into the company. Many a procurement pro has tried. And they have universally failed. (Triggering to read, I know)
Can you guess what this leads to? (*Cough* Unused software *Cough*)
Can we agree this is a huge problem for SaaS sprawl, rogue spend etc….?
I’m going to assume you said yes.
So if we agree it’s a problem, let’s look at the three approaches teams have traditionally taken to address this, from best to worst.
The good: Intake management software
Just like Slack did for email and Zoom did for meetings, intake management software has revolutionized the way procurement teams work.
It simplifies the entire buying process, from initial request to approval, with smart buying rules to identify duplicates right from the start. ⬅️ ⬅️ It Just so happens Opstream sits here. Funny how that worked out…
Anyway….
Because everything is centralized and prioritized in one platform, every stakeholder knows the status of every request.
It’s nothing short of magical. (Direct quote)
The bad: Microsoft Excel or Google Sheets
When procurement teams decide to start taking intake management seriously, spreadsheets are usually the first place they turn.
Everyone should try this first.
Not because it works. It doesn’t.
They should try it to see just how awful it really is at solving the actual problem.
We call this the Spreadsheet Path of Pain ™.
If you’re at the start of your procurement journey and choosing this path of pain, there are two main approaches to using spreadsheets:
Input each software request manually (Gross)
Use a tool like Zapier to integrate spreadsheets with an intake form that automatically populates portions of the data
The problem with this is that you need to update the progress of each request manually. And as with all manual work, things easily slip through the net.
Nothing to see here. What else is out there?
The ugly: Nothing at all
The third and least advisable approach is no management at all.
After all, why do something when you could do nothing!
Looking for the fastest way to create disaster?
Go wild and give teams access to the company card with no controls in place. Not only will any chance of controlling software spend be thrown out the window, you will get a front row seat to the main event.
I’ll step down from my high horse now…
If this sounds like a comedy skit, it isn’t. Companies are actually running procurement this way.
RIP Finance department. 🪦
Poor intake management stops you from hitting your goals
Imagine you’ve just received an intake request. Great, your time to shine.
The business is interested in acquiring Zoom for their team and want you to handle the buying process. Yay, they’re following policy!
But if your intake management process is loosey goosey, (technical term) this can lead to two major issues that stop you from hitting your new goals.
Two HUGE goals we’ve seen this year are Software Duplication and ESG requirements.
Let’s break them both down using our example of procuring Zoom.
Software duplication – It’s a goal. We’ve established that.
But you have no easy way of knowing if another team is already using Zoom.
Bear with me, if you will, and imagine a world where you do have visibility into apps inside your company. Congrats!
But you still don’t know if there is another product serving a similar purpose, like Microsoft Teams or Google Meet. SaaS sprawl ensues and the number of tools in your organization spirals out of control.
Bummer.
But what about…
Environmental, social, and governance (ESG) – This is a more recent goal for procurement.
Using our Zoom example, what is their ESG score? How do they stack up against company alignment on sustainability?
Easy enough task right? Find their ESG reports. But have you tried to find this information?
Surprise! You can’t! Sorry for your loss.
Surprise #2: Opstream Can!
Otherwise, there is no easy way of seeing this before making a purchase.
So how do you know if you’ll hit your own ESG goals? Welcome to the big leagues, slugger. You can’t.
Don’t worry, though. All hope is not lost.
Two 100% free ways to stay on top of your procurement goals
We’ve talked about the problems and pitfalls stemming from poor intake processes. Now let’s look at a couple of ways to help you hit your procurement goals in 2023:
Keep a log of every product your organization has purchased* – Give your team a clear overview of all the tools that are available to them and the features they offer. While this can be a daunting task to do manually, it maximizes the value and usage of each tool while minimizing duplicate requests. Remember, this has been lovingly dubbed the Spreadsheet Path of Pain ™ - you’ve been warned..
* The caveat here is that your team actually looks at the log and uses it to gauge their decision. This takes MAJOR education and training to get right.
Analyze the ESG impact of each software request at intake – As discussed, easier said than done. But the only tried and true method to hit your targets is to assess the ESG score of new software requests at the start of the intake process. Them's the breaks, kid. Otherwise, you will go through the whole process only to find that shiny new piece of software wrecked your ESG metrics.
Nobody said procurement was easy.
Final thoughts
The amount spent on software has skyrocketed in recent years. The official eye popping number is $30 billion annual waste in the US alone.
With a recession on the horizon, companies are doing everything they can to cut costs.
It’s not an exaggeration to say procurement teams have an outsized part to play.
When you’re ready to punch above your weight class, we’ve built one heck of a tool at Opstream to give you this ability.
Either way, a decision has to be made.
Manual or automated? Path of Pain or Path of Gain?
Either way, procurement teams will need nothing short of a deathgrip on the intake process to prevent tool duplication and hit their ESG goals.
Anything less risks the failure of the entire company.
And that is not an option.