How to Evaluate Software Vendors: SaaS Vendor Evaluation

There’s typically an abundance of software options within any category, often with similar features but unique pricing models, and each with key considerations, like distinct onboarding processes, the breadth of the tool’s integrations, and the quality of support.

So, if you’re unsure of what to prioritize or how to compare different platforms, you'll struggle to understand which software vendor best meets your needs.

In this article, we discuss how to evaluate software during the SaaS procurement process and share tips on implementing these strategies for your business.

Extensiv saved $133K after using Vendr to complete 37 deals, and Orum has saved $160K on software spend across 59 deals. How much will you save your business?

If you’re ready to negotiate your next SaaS purchase, we’re ready to help. 

Get started with Vendr free today. 

What is software vendor evaluation?

Software vendor evaluation is the process of assessing SaaS tools to determine which ones are best suited for your needs. 

A strong evaluation goes beyond simply considering the per-user price and a list of features. It should provide accurate insights into which product best serves your operations and meets your business goals.

Where software vendor evaluation often goes wrong

Without a structured evaluation process during supplier selection, it’s easy to miss key details. 

For example, some buyers might focus on a single feature or be swayed by the promise of a great deal from a SaaS salesperson, neglecting other key factors such as specific integration needs or the quality of customer support.

Below, we look at some of the most important considerations to factor into your thinking as you compare suppliers.

7 crucial vendor evaluation criteria

Consider these seven vendor selection criteria during the software vendor selection process. 

1. Functionality

While many competing SaaS tools appear similar on a surface level, there are nuances that can make a significant difference.

For example, some project management tools offer advanced task assignment and collaboration features. However, not all provide robust notification customization options. This can result in teams receiving irrelevant notifications, cluttering their inboxes and reducing overall productivity. 

Identifying these subtle yet impactful differences is crucial to selecting a tool that truly meets your expectations.

2. Usability/learning curve

If your team will use this tool on a daily basis, you’ll probably need it to be highly accessible. If this is the case, you should prioritize an intuitive interface, easy-to-use features, and a small learning curve. 

However, if you’re working with a highly tech-oriented team, you may be able to sacrifice this user-friendliness for more extensive functionality and customizability.

3. Integration capabilities

Choose new SaaS vendors that can integrate with the tools you’re already using or plan to use. 

Some tools may offer ready-made integrations, for example, or the option to set up automations with tools like Zapier. 

Others may offer API access, giving you needed integration capabilities but requiring a web developer to implement. 

4. Cost & pricing models

Cost can be tricky to evaluate due to different pricing models.

Some software solutions offer flat-rate prices per user while others may implement usage-based pricing instead.

Some products may also have initial setup fees, or have features only available through add-on purchases. Consider the total cost of each vendor you’re evaluating based on the features you need, the total number of users, and usage. 

You also want to assess options for redundancy. Some features you’re considering within a plan may not be needed as they’re already offered with other solutions in your tech stack. 

Finally, consider how pricing may change in line with your business goals over the medium and long term.

Use Vendr’s Buyer Guides to leverage community insights, discount levers, and pricing benchmarks to better understand potential pricing options. 

5. Scalability

Your needs now will likely be different than your needs a few years down the line. Growth adaptability is important. Consider whether your chosen software can accommodate more users, offer more advanced features, or allow for increased usage as your business grows over time. 

6. Vendor customer support

Customer support is often overlooked, but should be a critical consideration. Ask sales representatives about customer support guarantees, including guaranteed response times, hours of availability, and whether support is available through email, phone, and/or live chat.

Use online customer reviews to help assess the quality of a vendor’s customer support and leverage Vendr’s product knowledge and community insights. 

7. Security and compliance features 

New software may pose additional security risks when you integrate it with other products containing key information like customer data. 

Some products have security practices listed on their websites, including specific features like encryption or two-factor authentication. Others may list security compliance certifications. Vendor compliance with general security features, along with industry-specific regulatory requirements, is critical. 

To facilitate compliance, consider adding compliance management software to your tech stack. 

How to evaluate software vendors in 2024: The Vendr expert framework

Using an intentional, systemized process to evaluate SaaS vendors will help you effectively and accurately compare competing products. Since there’s so much information and so many criteria to keep in mind, Vendr’s four-step software evaluation framework can help you keep track of what matters for improved and informed decision-making. 

1. Define requirements

Before you get in the weeds of comparing different vendors, start by defining what you need from the product in question. 

Make a list of the following:

• How many users will use the platform
• Estimated budget
• Desired user experience 
• Must-have features, including specific functionality needed
• Key integrations you want 
• Anticipated usage 
• Customer service options 
• Expected security standards or certifications 

Consider your immediate needs and anticipated long-term needs. While you want to find a solution that works right now, consider your future business growth to factor in scalability, too. 

2. Shortlist options

Narrow down your options, creating a shortlist of SaaS vendors and specific products to research further. We typically recommend considering at least three products, though some companies have the bandwidth to review up to five. 

There are a few good ways to do this. You can ask your network for product recommendations, or check out software review sites and look at the top options in the product category. 

First, use each product’s online pricing information to understand the costs of plans, bundles, and individual features. However, this pricing information is often limited, so use Vendr to get detailed pricing data, including on hidden fees and additional costs.  

You can also use Vendr to get sku-level pricing benchmarks for products you’re considering, even factoring in negotiation levers like contract length or size to see how it may impact your bottom line.

3. Conduct evaluations

Once you have your shortlist of three to five tools, start conducting more in-depth evaluations to get as much information as possible. 

The evaluation period should include:

• Asking for request for proposals (RFPs) 
• Signing up for free product trials to test out the interface
• Booking product demos 
• Booking sales presentations 
• Reading customer reviews
• Reviewing case studies and testimonials 
• Asking about key deliverables 
• Getting final, detailed pricing 
• Getting clarification regarding onboarding requirements, potentially including non-disclosure agreements (NDAs)

Use comparison charts to track key details for each vendor. We have a free vendor evaluation template that we’ll share in the next section to get you started.

4. Compare the data 

After completing the evaluations, assess your findings. Compare platforms and consider your priorities. One product may come in slightly over budget, for example, but has features that other vendors couldn’t match. It may be cost-effective enough to find room for it in your budget. 

Consult with other team members if needed. Decision-makers, for example, may want to ask for the opinion of end-users with experience using similar tools or consult with other executives regarding budget or software redundancy. 

If you still have questions at this stage, get the information you need. Ask the sales team, read customer reviews, and use Vendr to benchmark pricing and negotiation data across your preferred vendors. 

Free software vendor evaluation template

Vendr’s free software vendor evaluation template can help you collect the information you need to compare different platforms and make an informed, strategic decision. 

Download our free vendor evaluation template.  

Navigate software procurement & expense management with Vendr

Without a well-defined end-to-end procurement process, vendor evaluation and subsequent negotiations can be a complex and drawn-out process where you have limited insight into fair pricing.

Vendr provides essential assistance through all aspects of procurement operations with the following benefits:

• Streamlined procurement processes. Set up customized approval workflows with key stakeholders, including simultaneous approval options and managing procurement requests, to streamline negotiations.
  
  
• Expert contract negotiations. Vendr provides expert advice for negotiating the best deals and ensuring fair pricing for buyers.
  
  
• Comprehensive vendor evaluation. Vendr’s transparent pricing data and community insights can help you gain more information about vendor negotiations, saving you time in the process. 

Vendr has helped customers with growth-enabling cost savings. 

Extensiv saved $133K after using Vendr to complete 37 deals, and Orum has saved $160K on software spend across 59 deals. How much will you save your business?

If you’re ready to find your next SaaS purchase, we’re ready to help. 

‍Get started with Vendr free today.