Firms are wasting hundreds of hours every year just renewing software purchases

Business leaders are becoming heavily bogged down in managing software contracts, wasting hundreds of hours per year, according to new research.

Analysis from Vertice shows firms are wasting 26 hours per month in meetings simply to buy or renew SaaS products; equivalent to 385 hours every year.

This means employees in charge of buying, managing, and renewing SaaS contracts at work - from Salesforce and Canva to Xero - are spending more than half of their working year doing so.

The analysis of 1,000 businesses globally found that senior finance and tech leaders are losing the most time to these lengthy purchase and renewals processes, with 30% of contract holders at manager level and 29% at director level.

"It is particularly concerning that the burden of contract management is hitting those in senior level positions the hardest," said Eldar Tuvey, CEO and founder of Vertice.

"Finance and tech leaders need the time to focus on high-value strategic initiatives rather than being stuck in endless meetings and email chains to buy and renew software."

On average, companies have 126 SaaS contracts active at any one time, and are renewing an average of five every month. Each of these requires meetings, emails, informal chats, demos, Zoom calls, and back-and-forth negotiations, as well as involvement and sign-off from legal, IT security, and finance teams.

And those 126 SaaS contracts don't include 'shadow IT' - the use of software, services, and devices that haven't been authorized. Eight-in-ten workers admit to using shadow IT, which means there are many more contracts on the table that require management, the study noted.

Purchasing a single piece of software is taking employees an average of 100 days, Vertice said, while renewing a SaaS license takes an average of 60 days end-to-end. Three bids are tabled for every new piece of software while there are 2.8 meetings per process on average, 8.6 emails for a renewal, and 5.2 emails for every new purchase.

Meanwhile, SaaS contracts take approximately seven days to be checked by legal teams, with internal decision makers making slow progress thanks to unexpected delays, emergency stops and even U-turns.

"With the majority of enterprises focused on cutting costs and increasing efficiency, our research shows that the task of managing SaaS and cloud spend poses a serious threat to business productivity," Tuvey said.

"We’re calling on businesses to recognize the hidden cost of SaaS and the toll that contract management can have on employees. Companies looking for productivity gains should look to reinvent their software management processes and take advantage of technology that makes buying and renewing software more streamlined and efficient."