Software Procurement: Why SMBs waste millions on products and how to stop it

Small and midsize businesses (SMBs) today run on an arsenal of cloud apps – CRM, collaboration, HR, finance tools, and more. But here’s the catch: most of those subscriptions go underused. 

Research shows 50% of all software licenses go unused, at a cost of approximately $45 million per month in wasted spending across organizations. 

That adds up fast. 

With Procurement‑as‑a‑Service projected to grow at ~12% annually from $10 billion today to $14 billion in five years , it’s clear this isn’t a boutique solution. It’s becoming a standard for smarter SaaS buying.

In other words, your software budget may have a hidden leak. Every unused seat or forgotten subscription is money flushed down the drain.

Why does this happen so often in SMBs?

It’s usually a mix of missteps and missing processes. For example, once an employee switches teams or leaves, their paid account is often forgotten instead of canceled.

Different departments may each subscribe to their favorite tools, so you end up paying for several overlapping apps (37% of workers even juggle three browsers to access SaaS, and 31% use two collaboration apps for the same job). 

“Shadow IT” also plays a role: unsanctioned purchases by employees can silently swell your SaaS stack (research suggests shadow apps can be about a third of all SaaS spending). 

And without strict oversight, subscriptions will auto-renew by default – many organizations lack full visibility, so redundant contracts renew without anyone noticing.

Key drivers of wasted SaaS spend in SMBs

To better understand this phenomenon, let’s see some reasons with which we can resonate, or worse, with the whole list. From my experience, the following are the powerful reasons:

Honestly, it’s no surprise. With nearly 9 million mobile apps out there, choosing the right ones for your business is a real challenge. Which apps are reliable? Which gives you the best value? And most importantly: which ones help your business grow and adapt, not just get by?

You’d think AI would make it easier, but in many ways, it’s made things harder. On top of vetting apps for core functionality and price, you’re now navigating a maze of AI claims: Does it add any value? Or is it just buzz?

What is software procurement as a service?

Going back to basics can be the smartest move. When the software world feels overwhelming, it’s often a human touch that brings clarity. That’s where procurement as a service comes in, your practical fix for software overload.

What is procurement as a service (PaaS)?

A SaaS procurement service, also called software buying as a service or outsourced IT procurement, is when you bring in an expert team to handle your software buying end-to-end.

They assess your business needs, evaluate and recommend the right tools, negotiate prices with vendors, and manage the purchase and onboarding – all so you don’t have to handle dozens of vendor conversations or risk overpaying.

Some call it software buying as a service. Others say outsourced IT procurement.

Same idea.

Instead of spending hours talking to each vendor and second-guessing every tool, you partner with people who live and breathe software buying. They’ll review what your business needs, recommend the right tools, handle negotiation, and help with rollout.

Ready to take control of your SaaS spend? Discover how Tekpon’s hands-on, expert procurement service works.

Procurement experts sit down with you, learn how your business operates, and design a leaner, smarter app stack. Then, they manage conversations with vendors to secure better deals.

Because it’s outsourced, you gain experienced negotiators without adding headcount. You get expertise without overhead.

Whether it’s CRM, project management, marketing, or security tools, a procurement service covers it all. That matters most for growing SMBs without a dedicated procurement team, as they avoid guesswork and spend smarter.

The results speak for themselves

A quality SaaS procurement service:

To sum it up, working with procurement-as-a-service means letting experts take charge of your software buying. You get smarter decisions, true savings, and a cleaner stack, all without hiring a full-time team.

Why software buying as a service is taking off

Why is this model catching on? For one, the software landscape has simply become too complicated for SMBs to navigate alone. Every year, businesses add dozens of new apps to their tech stacks. 

In this environment, squeezing savings out of software can have a big impact on the bottom line.

SMBs are adapting.

Around 60% of SMBs have centralized their purchasing decisions and started using formal processes like RFPs and competitive vendor research. That opens the door for procurement-as-a-service to shine.

There’s also a data and tech dimension.

Procurement-as-a-service firms often pair human expertise with SaaS management platforms. They can integrate usage analytics, contract management tools, and market data to make fast, informed decisions. This synergy lets them outperform what a busy internal staff could do on a spreadsheet.

Finally, it simply works. Companies are reporting tangible wins from this model. 

Vendors are negotiating earnestly too: with enterprises and SMBs alike pushing back, software companies often have a discount room available. 

Analysts note that the global procurement-as-a-service market is growing rapidly (projected to nearly double by 2032), reflecting the strong demand. 

To conclude, SMBs are embracing this outsourcing because it delivers enterprise-grade buying power at a fraction of the cost of a full-time procurement department.

How software procurement services work

Procurement services follow a clear, repeatable process. Typically, it looks something like this:

1. First, a discovery call.

A procurement advisor will meet with you, either virtually or in person, to review your current software usage and understand your goals. You’ll discuss the apps you use, who uses them, any challenges you face, and your plans.

This step is key to identifying the problems to solve and the features that matter most for your business.

2. Next comes stack analysis and research.

A team or an expert takes a look at each tool in your portfolio based on what you’ve shared. They compare it to other options, check how licenses are being used, and spot any overlaps.

For example, if your teams are using two different marketing automation tools, someone will point that out as a chance to simplify things. They also gather pricing info and benchmark data for comparison.

3. The third step is vendor negotiation.

Armed with a consolidated requirements list and market benchmarks, the procurement experts reach out to the software vendors. They negotiate on your behalf – often securing volume discounts, promo pricing, or free add-ons. 

4. Finally, there’s delivery and follow-up.

The service will present you with a curated proposal: a recommended set of tools with negotiated pricing and clear next steps.

Some services even help with the actual purchase orders or implementation. Importantly, they often revisit your stack after implementation, adjusting licenses as your team grows or usage changes. 

Partnering with a procurement-as-a-service provider is like adding an expert buying team to your company. They handle the paperwork, allowing you to focus on your business.

As your fractional procurement team, we analyze your budget and manage tasks like license renewals, ensuring you avoid overspending.

But, only humans, no AI?

AI-boosted, human-led procurement-as-a-service

Before your team negotiates deals and finalizes tools, powerful AI is already at work behind the scenes, making your human-led procurement-as-a-service smarter and faster.

AI isn’t replacing your expert team; it makes them better. AI should be used to help procurement teams instead of taking their place.

When it teams up with experienced advisors, AI can handle the heavy data tasks like spending analysis, contract reviews, and tracking usage trends, while your experts add their valuable insights and strategy to the mix.

The result?

Procurement-as-a-service teams become more precise, proactive, and impactful. They’re freed from spreadsheets and repetitive tasks, able to focus on strategic deals and meaningful cost savings.

It’s truly human expertise amplified by AI, not replaced by it.

What are the benefits of procurement support for SMBs

Outsourcing your software buying delivers several concrete advantages:

By negotiating on your behalf, procurement services find deals you’d never get on your own. Beyond sticker price, they cut waste too: identifying unused licenses or overlapping tools means you simply stop paying for them. 

Every canceled seat and re-priced contract adds up to real savings.

Procurement partners ruthlessly eliminate inefficiencies. They’ll spot apps that duplicate functions across teams and advise consolidating them.

They also recommend rightsizing – matching your seat counts to actual headcounts. You keep the tools that add value, and ditch the rest, without disrupting operations.

A professional procurement service has no loyalty to any vendor, so their advice is unbiased. Like we like to say about ourselves, we explicitly advertise being “100% independent and vendor-neutral”.

This differs from reseller pitches and internal biases, offering honest comparisons of options. The service’s buyers have extensive market knowledge and experience negotiating deals, helping you secure concessions like longer trial periods or flexible payment terms.

For SMBs lacking experienced procurement professionals, achieving this level of expertise internally can be challenging.

Procurement-as-a-service isn’t just a one-and-done deal; it usually turns into an ongoing partnership. The team will help you find ways to save costs, treating each renewal like a chance to improve.

They use software and benchmarks to predict your future spending and keep surprises at bay.

Over time, this builds a SaaS cost reduction strategy for your company: you maintain control over spend, continually right-size your subscriptions, and capitalize on market trends. 

Each of these benefits plays to the strengths SMBs lack internally (time, negotiating power, market data). 

Is procurement-as-a-service the solution for you?

How do you know if your business should try this approach? Here are some quick signs it might be a good fit:

Of course, every SMB is different. Very small firms with only 1–2 subscriptions may not need this level of support. And there is a cost to the service itself. For perspective, our basic plan starts around $3,000 per year for up to 10 tools. 

For many SMBs, that’s a fraction of what a couple of wasted licenses would cost. Ultimately, the decision comes down to whether the expected savings and peace of mind outweigh the fee.

Talk to a Procurement Advisor if you’re curious. By aligning an expert with your needs, you’ll quickly see whether the benefits justify the investment.

Final verdict: Smarter SaaS buying starts here

Every SMB wants to stretch their tech budget, but here’s the hard truth: about half of SaaS spending goes to waste.

Studies show up to 53% of licenses sit unused, costing companies an average of $21 million per year. In a tough economy, that’s money your business can’t afford to throw away.

So what’s the answer? Procurement‑as‑a‑service. It gives you the people, the process, and the purchasing power to trim the fat. These pros audit your stack, optimize usage, and negotiate smart deals, so you only pay for tools that deliver value.

Looking ahead, remember this: smarter SaaS buying starts with two things: visibility and strategy. Whether you build those in-house or team up with a specialist like Tekpon, the mission is the same: match your tools to your real needs and hold vendors accountable on pricing.

If you’re seeing unused apps pile up or just want tighter control over subscriptions, procurement support might be your answer. It has the power to save your company thousands or even millions of dollars in the long run.