Thinking about cancelling a SaaS contract? Consider these factors first.

If you’ve been in procurement or IT for any length of time, you’ve probably experienced the following scenario: an awesome company in an interesting industry recruits you. You go in for an interview and learn about their challenges, which likely involve a lack of oversight for various software tools. You accept the position, and find yourself immediately swamped with dozens of software platforms – often with no background, contracts, or governance.

Does any of this sound familiar? It’s definitely not a fun position to be in. You’re now tasked with finding as much relevant information as possible, and creating an assessment of what should stay and what should go.

And you’ve got dual masters here: in order to please management, you’ll need to reduce costs, create governance policies, and maintain some amount of uniform information on all providers. To please employees, you’ll need to support (and fund) tools that help them get their work done in the most efficient manner possible.

In researching and creating your plan, you’ll probably find various SaaS platforms that are increasing your costs. These instances may look like very straightforward cancellations – and SaaS providers do expect some level of churn (the industry term for cancellations). According to the 2016 Pacific Crest Private SaaS Company Survey [gated], SaaS respondents reported a 10% median annual churn rate.

Before deciding to cancel (and facing the wrath of employees), how can you make as objective an assessment as possible? Do your best create a 360-degree view of the SaaS platform, using these tips:

Understand the functional requirements of the business vs. what’s available and easily accessible in the SaaS tool. If there’s an internal business owner of the SaaS in question, consider yourself lucky. That person (and their team) will be a great resource during this process. Sit down with the appropriate team members to understand what their needs are, and if those needs are being met with the current SaaS solution. Are they getting at least 80% of required functions, or only 20%? Have the goals (and associated needs) changed over time? Are they satisfied with what they have, or interested in trying other tools in the market? Is there new functionality in the existing SaaS tool that might support unmet needs? These conversations will give you key diagnostics for that SaaS platform.

Gather records on what the business has paid so far, and what others in the market are charging. Get access to contracts (so you’ll know what you agreed to) and payment history (to assess what you’ve actually paid). Collect a little market intelligence – maybe through peers or online research – on what other similar SaaS platforms on charging. If you’re paying really high rates compared to similar competitors, take a look at your contract. What are the penalty fees for an early exit? You might find those penalty fees are worth the savings of engaging with a lower-cost SaaS provider. And if you get this far down the path, engage the internal business owner to see which options they’d prefer investigating. A SaaS provider that is motivated to win your business may be willing to offer a credit or discount to soften the blow of the penalty fee – in exchange for a signed contract.

Take prospective SaaS platforms for an extensive test drive. Let’s say you’re headed straight for a new SaaS platform. Department heads are on board with changing, and there’s significant cost savings to be had. Before you sign on the dotted line, request access to the SaaS platform so your team can try it out. Many SaaS platforms offer a free trial, which might require some configuration to mimic your team’s current activities. Ask for one if there’s no trial available, and make sure your team tests it as vigorously as possible. The last thing you want is to sign a multi-year contract for SaaS that doesn’t check all the boxes.

Now, there’s no guarantee that you’ll have every data point available, but taking these steps will help you make an informed decision – which is the best you can do.