How to Take Control of your Employee’s Fuel Reimbursements

One of your teams discovers a SaaS tool and makes a quick purchase using the company credit card, thinking this software solution will simplify processes and increase efficiency. It seems straightforward at this point—a hassle-free process.

However, this purchase workflow shadows the IT and legal departments. None of them are involved in the decision-making process. As a result, the chosen product never undergoes the risk assessment for security threats and legal regulations. What appears as an elementary and frictionless process becomes a breeding ground for chaos and potential operational disruptions.

This blog post is for procurement teams that wish to understand the SaaS procurement process and streamline the purchases for efficiency. We will discuss the challenges with the traditional approach and how you can overcome these to create a secure and cost-effective tech stack.

What is SaaS Procurement?

SaaS procurement is the acquisition and management of cloud-based software solutions through a subscription model.

As a member of the procurement team, you assess organizational software needs, evaluate vendors, negotiate contracts, and oversee the entire lifecycle. You aim to ensure cost-effectiveness, compliance, and optimal performance of SaaS applications.

Challenges With Traditional SaaS Procurement Process 

The most significant loophole in traditional SaaS procurement processes is the lack of proper approval workflow. Employees purchase suitable SaaS tools by themselves based on self-assessment. While this approach is flexible and saves time, it leads to operational bottlenecks in the long run.

Here is an overview of what happens when the relevant stakeholders aren’t involved in the SaaS procurement process:

Absence of Procurement Team

When teams proceed without involving the procurement team, they introduce several challenges, impacting the following aspects:

1. Cost-Optimization: Without a centralized team overseeing SaaS subscriptions, different departments independently select similar plans, leading to redundant expenses. For example, two teams might unknowingly invest in the same SaaS product for $ 12/month/user plans. However, when consolidated under an enterprise plan, they could get added security features more cost-efficiently.
2. Vendor Management: Vendor management becomes fragmented without a procurement team, as various teams engage with multiple vendors independently. Hence, It becomes challenging to negotiate favorable terms, track performance, and ensure consistent service levels across the organization. This absence of centralized management hinders the organization's ability to leverage its purchasing power effectively.
3. Inconsistent User Experiences: Different teams choose diverse tools for similar tasks, resulting in variations in workflows and collaboration. This lack of standardization hinders overall efficiency and employees' ability to work seamlessly across different projects.
4. Renewal Management: The decentralized approach of SaaS procurement makes it challenging to track and manage subscription renewals effectively. Unintended renewals for underutilized or obsolete SaaS subscriptions ensue, leading to unnecessary costs and potential inefficiencies in resource allocation.

Absence of Legal Team

Legal professionals evaluate and ensure that the chosen SaaS solution adheres to data protection and privacy laws. Also, they help craft and review contracts to protect the enterprise’s interests.

The absence of legal scrutiny leads to inadequate safeguards, exposing sensitive information to security breaches. Moreover, without their input, contracts with SaaS vendors lack clarity, leaving room for misunderstandings, disputes, or unfavorable terms. There's a high risk of violating laws, regulations, or contractual obligations, leading to legal consequences and financial penalties.

Absence of IT Team (Also Known as Shadow IT)

IT professionals assess the security measures of SaaS products. The absence of IT involvement results in security compromise and operational inefficiencies. Let's say the sales team, without prior knowledge of the IT team, independently procures a SaaS product for inbound leads, integrating it swiftly into their workflow. This incident is also known as shadow IT.

But after a few weeks, a technical issue arises. Unaware of the product's existence, the IT department struggles to provide immediate support or resolve the issues promptly. It disrupts the sales team's workflow and raises broader concerns for the organization, exposing the company to potential data breaches or regulatory non-compliance. Moreover, fixing this issue involves potential legal ramifications and additional unplanned costs for IT intervention.

6-Step SaaS Procurement Process 

Each relevant stakeholder reviews and gets an overview of the purchase cycle — this is what a collaborative SaaS procurement process looks like.

1. Identify Need

This step involves identifying the specific software needs of the organization. Departments communicate their requirements to ensure the chosen SaaS solution aligns with overall business objectives. They fill out custom forms that become the procurement team's base to select the right vendor. 

2. Vendor Selection

The procurement team researches and evaluates various SaaS vendors to find a solution that meets the identified needs. At this stage, it aims to find the best vendor that offers functionality and security at reasonable pricing. Factors such as vendor reputation, integration capabilities, and contractual flexibility shape the selection process.

3. Approval Process

Relevant stakeholders, including IT, legal, and finance, review the selected vendor and approve the procurement. This collaborative approach ensures that the desired SaaS solution complies with legal standards, aligns with IT strategy, and fits within the budget.

However, this collaborative approach can quickly become a root cause for internal resentment if you don’t lay out proper approval workflows. A lack of workflow makes departments wait for weeks, while none of the stakeholders has visibility over the process. There is unnecessary back-and-forth communication, and eventually, teams move to the traditional, flexible, yet risky SaaS procurement process.

If delays and friction in approval workflows disrupt your SaaS procurement process, centralized SaaS procurement software helps teams collaborate with minimal friction.

You can create proper approval workflows that define who needs to approve what. You get a no-code workflow builder, where you add if-then rules and make the desired workflow. You can have multiple workflows for different kinds of purchases, including parallel approvals as well.

For instance, a purchase request goes to the line manager, then the finance team, and after that, for a combined legal and IT review. You can have intricate workflows as required to suit your hierarchical structures.

With proper workflows laid out in a procurement automation platform, you simplify approvals. Moreover, a centralized dashboard makes it easier for each stakeholder to get an overview of the process without getting stuck in long email threads. 

4. Purchase and Deployment 

After approval, the procurement team finalizes contractual agreements with the chosen SaaS vendor. They negotiate on pricing models, licensing terms, and any customization requirements unique to the enterprise's needs.

Also, the procurement team ensures that the purchase aligns with the organization's budgetary constraints and financial policies. This step involves securing the best possible pricing and managing payment structures through one-time transactions or recurring subscription models. Further, the procurement team develops and finalizes contractual agreements with the vendor. This step involves clarifying terms and conditions, specifying service-level agreements, and addressing legal or compliance-related aspects.

With the procurement formalities completed, the deployment phase starts. Firstly, the SaaS solution has to be configured to align with the specific needs and processes of the company. This step ensures that the SaaS solution seamlessly fits within the organizational framework.

Secondly, the deployment team collaborates with IT and relevant departments to ensure that the SaaS tool integrates effectively with other applications to have a unified data ecosystem. Moreover, they establish and maintain robust access controls by defining user roles, permissions, and authentication mechanisms to safeguard sensitive data and maintain compliance.

5. Onboarding and Training

Once deployed, the onboarding and training phase ensures employees use the new SaaS tool effectively. This step is crucial for optimizing usage and ensuring that the software contributes to increased productivity. 

Training sessions, documentation, and support materials are provided to familiarize end-users with the features and functionalities. This step minimizes the learning curve and maximizes user adoption.

6. Monitor and Renew

Once users are onboarded and the SaaS solution is integrated into the organization's workflow, the focus shifts to post-onboarding and ongoing management. This stage involves the following:

• Encouraging ongoing user engagement and collecting feedback, where regular communication channels help gather insights into user experiences and identify areas for improvement.
  
• Monitoring the SaaS solution's performance to identify and address issues promptly. The IT and support teams collaborate to resolve technical glitches, ensuring uninterrupted functionality and a positive user experience.
  
• Assessing functionality, user satisfaction, and alignment with business objectives to make renewal decisions. Simultaneously, compliance with legal and regulatory standards remains a significant consideration to avoid potential risks.

Collaborative Effort for Efficient SaaS Procurement

While SaaS procurement seems like a small piece of the puzzle, choosing and implementing it requires attention to detail to avoid operational and financial shocks. Each team needs to work together and help create a secure and cost-effective tech stack for the organization. 

However, collaborative efforts demand a centralized platform to overcome two core challenges — delay and friction. We have shared the top nine procure-to-pay software for enterprises for you to find solutions that transform the SaaS procurement process.

The finance landscape is undergoing a seismic shift in an era of unstinted technological advancement. Back in 2018, a PWC report found that amongst the top 12 challenges that financial organisations faced, 4 of them were technology-related. It wasn't about deciding whether to implement digital transformation technologies but more about understanding the enterprise value these investments would add.

According to Deloitte, adopting the right digital transformation strategies can increase market value by up to $1.25 trillion across Fortune 500 companies. But how can organisations implement these strategies successfully?

The CFO's Perspective on Digital Transformation

Digital transformation is no longer just a buzzword; it is a mandate for modern businesses, and the CFO plays a central role in this paradigm shift. Gone are the days when the Chief Financial Officer (CFO) position revolved solely around balance sheets, budgeting, and compliance. The modern CFO is now tasked with leading the charge in the digital transformation of the finance department.

With its vision of becoming a global technology and innovation hub in the UAE, the need for digital transformation is even more compelling.

Why is digital transformation so vital for a CFO?

• Real-Time Financial Insights: Real-time access to financial data can be an invaluable asset in combating expense fraud. Digital transformation allows CFOs to detect irregularities promptly, leading to timely intervention and reducing the financial losses associated with fraud.
• Enhanced Reporting: CFOs can generate comprehensive financial reports more quickly and accurately, aiding in transparency and stakeholder communication.
• Cost Reduction: Automating financial processes can lead to cost savings, such as reduced labour and operational costs.
• Strategic Planning: Digital tools help CFOs analyse financial data and create insights to make strategic decisions and adapt to changing market conditions.
• Compliance and Risk Management: Digital solutions assist in maintaining compliance with changing regulations and mitigating financial risks.

What is the best digital transformation tool for you?

As a CFO, your journey towards a comprehensive digital transformation should be guided by specific features that enhance financial efficiency and help combat one of the most prevalent issues—expense fraud. Here's what you should look for in a digital transformation tool to achieve these goals:

1. Full Control Over Budget Allocation and Spend Visibility:

Access to complete control over budget allocation and clear visibility into how those budgets are spent is the foundation of sound financial management. Your chosen digital transformation tool should empower you to allocate resources efficiently and make data-driven decisions.

2. Real-Time Closure with ERP Integration:

Moving from traditional month-end closures to real-time closures is a game-changer. This transition ensures you have real-time insights into your company's expenditure, allowing you to address financial challenges swiftly. An essential component of this is seamless integration with your ERP system, which provides instant access to financial data.

3. Elimination of Petty Cash Usage:

Digitization of financial processes is a fundamental aspect of modern financial management. To achieve this, focus on strategies to eliminate petty cash usage as much as possible. Consider solutions that offer alternatives, such as merchant-specific cards, fuel cards, and PRO cards, which reduce inefficiency and enhance security.‎

4. Advanced Expense Fraud Detection:

Expense fraud is an all-too-common challenge faced by many companies. Leveraging digitization to combat this issue is essential. Look for a solution equipped with world-class Optical Character Recognition (OCR) technology to identify duplicate receipts and suspicious transactions. The goal is to ensure transactions are monitored in real-time and in an automated manner, such that financial compliance is continuously maintained.

5. Improved Audit Process for Accounting Teams:

Ensuring an enhanced audit process is a vital component of your CFO responsibilities. You must seek a digital transformation tool with two critical features for this. First, accounting automation powered by ERP integration streamlines financial processes and reduces the potential for human error. Second, the tool should provide 100% visibility into all receipts across the company, creating a comprehensive audit trail and reducing the likelihood of discrepancies.

6. Insights and Forecasting:

To thrive in a rapidly changing business environment, a CFO must have a finger on the pulse of their company's finances. A 360-degree digital transformation solution offers complete real-time visibility into all company expenditures. This feature allows you to provide timely, data-driven insights and forecasts, enabling proactive decision-making.

7. Multi-Subsidiary Expense Tracking:

In the UAE, as businesses achieve a reasonable size, they often evolve into multi-subsidiary or multi-branch entities. Given this common trajectory, it's imperative that the chosen digital transformation tool supports multi-subsidiary expense tracking. This ensures that financial data from all parts of the organization is aggregated and analyzed effectively. Not only does it provide a holistic view of the company's financial health, but it also enables consistent monitoring and control of expenses across the entire organization.

To illustrate the power of these digital transformation features, let's look at real-life business examples from the UAE:

1. Dubai Blockchain Mandate: Dubai is on a mission to become the world's inaugural blockchain-powered city. The Dubai Blockchain Mandate, led by the Smart Dubai Office, lays out a clear path for integrating blockchain technology across the city. By embracing blockchain technology, Dubai has the potential to realize annual savings of 5.5 billion dirhams in document processing alone, equivalent to the value of one Burj Khalifa every year.

2. Dubai Government Services: The government is committed to digitizing its services, the rate of which in 2023 stands at 99.5%. Currently, 87% of all government service transactions are digital. Furthermore, the government has also developed over 100 smartphone apps with cybersecurity and data law compliance.

The digital transformation process is an ongoing journey that entails mobilising the entire workforce and instilling a change-oriented mindset with no pre-defined endpoint that might extend well beyond your current leadership. It serves as the fundamental framework for an organisation's survival in an era marked by disruptions. Achieving success in this context involves formulating a strategy around making purposeful investments in the digital realm. It requires the prudent allocation of resources toward innovative technologies that can drive the organisation's strategic initiatives.

Ultimately, the successful execution of digital transformation mandates the ability to communicate to stakeholders that every digital initiative undertaken is a deliberate move to enhance the organisation's prospects for sustained success.

We're thrilled to announce that Pluto closed US$6M in Seed funding in February, led by Global Founders Capital.

With GFC being the lead investors, we've had participation from several of the world's leading investment firms and entrepreneurs. Soma Capital, Graph Ventures, Adapt Ventures, Ramp, Thejo Kote (Founder of Airbase), Shaan Puri, and William Hockey (Co-founder of Plaid) were some of the few who participated.

With our Seed round, we aim to get closer to achieving our mission; to streamline company expenses for MENA businesses. 

The problem

Company spending in the MENA region is problematic, time-consuming, and frustrating. Managing company spending in MENA today is difficult, time-consuming, and frustrating, as today, companies only get a single debit or credit card.

OTPs

Today, employees all share one company credit card, which usually leads to an OTP being sent to the CFO, financial leader, or founder of the company. Most bank OTPs last from 2 to 10 minutes before they’re expired. So, if an employee doesn’t get the OTP in time, they won’t be able to complete the transaction.

Overspending

When a company credit card is issued, you cannot control spending. This means there is no way to set limits on the card to avoid being overcharged by recurring subscriptions or employees going over budget.

No visibility

You cannot get real-time visibility or instant reports on business expenses with company credit cards. This makes making informed decisions about allocating resources in real-time more challenging.

Petty cash

Banks have no ideal solution for petty cash management. Companies typically maintain a cash vault at their offices, distribute loose cash to employees, and spend countless hours collecting and matching invoices.

The solution

Introducing Pluto Card: a corporate card & spend management platform that allows MENA companies to simplify and control their business expenses.

With Pluto's software, managers can issue their employees virtual cards with spend and control limits, cards that get canceled after a one-time purchase, and cards with a recurring daily, weekly, or monthly budget.

Employees can request expenses from their managers and submit reimbursement requests by dragging and dropping receipts onto the software. This happens in real-time, where managers can view employee requests as they happen, see what is being spent and where, and gain insight into instantaneous expense reports, helping them make informed decisions.

Pretty straightforward.

Want to see Pluto in action? Sign up and get a private demo here.

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