BENCHMARKED REPORT 2025

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INTRODUCTION

SaaS costs have never been more out of control. Annual SaaS spend per employee has surged by 31% in just two years. According to benchmarked data, 90% of companies overpay for software by an average of 26%.

This guide explains why SaaS costs spiral, and how your business can take immediate action to cut overspending, enhance visibility, and improve procurement efficiency.

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CHAPTER 1: WHY SAAS SPEND IS SPIRALING OUT OF CONTROL

External Cost Drivers

1. SaaS Inflation

• SaaS inflation consistently outpaces CPI.
• 58% of vendors increased prices in the past 6 months.
• Many vendors reduce value while raising costs.

2. SaaS Shrinkflation

• Vendors offer less functionality or fewer features for the same or higher prices.
• 27% of companies experienced shrinkflation in 2025.
• Shrinkflation appears as unbundled features, reduced discounts, and price restructuring.

3. Vendor Pricing Tactics

• Over half of vendors increased prices in 2025.
• 55% don’t publish pricing, making negotiations harder.
• Contracts often lack flexibility for headcount changes.
• AI-based pricing models are emerging but risky without control.

Internal Cost Drivers

1. Inefficient Procurement

• Poor workflows lead to delays, policy avoidance, and maverick spend.
• Decentralized contract ownership results in bad deals.

2. Late Renewals

• Companies starting renewals <30 days before expiry receive 30% less in discounts than those starting 90+ days ahead.

3. Lack of Tech Visibility

• 21% of tools go unused, 45% are underutilized.
• Overlapping apps (e.g., multiple project management tools) inflate costs.
• M&As and siloed buying processes drive duplication.

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CHAPTER 2: HOW TO FIX IT

Negotiation Strategies

1. Start Early

• Begin renewal talks 90+ days in advance.
• Gather usage metrics, competitor quotes, and benchmarks.

2. Use Pricing Benchmarks

• Only 45% of vendors publish pricing.
• Real-time benchmarks are essential.
• Benchmarked provides intel on 16,000+ vendors with detailed, actionable data.

3. Strategic Flexibility

• Multi-year deals aren’t always best.
• Align contract terms with your growth trajectory.
• Focus on right-fit solutions, not just lowest price.

Improve Internal Procurement Processes

1. Approval Times

• Understand delays by department (e.g., HR: 18 days, IT: 7 days).
• Streamline by adjusting intake and running concurrent approvals.

2. Smart Intake

• Balance usability and information gathering.
• A single, well-designed intake process reduces rogue spend.

3. Automate

• Most procurement is still manual.
• Automation reduces errors and frees time for strategic work.

Tech Stack Visibility

1. Track Utilization

• Stop using spreadsheets. Adopt real-time, automated tools.
• Accurate usage data supports smarter buying and renewals.

2. Eliminate Duplicates

• Identify overlapping tools.
• Consolidate to increase ROI and reduce waste.

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CHAPTER 3: HOW BENCHMARKED HELPS

benchmarked is set to optimize every aspect of SaaS spend.

With our full done-for-you cost optimization service we:

• Cut software spend by up to 20%
• Improve procurement cycle speed
• Reduce contractual and renewal risks
• Align software investments with business goals

What You Get:

• Contract benchmarking & negotiation support
• Usage analytics and optimization insights
• Procurement automation tools
• Tech stack rationalization and visibility

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Learn how benchmarked can help you:

• Control and streamline procurement
• Eliminate hidden SaaS waste
• Leverage data-driven negotiation for maximum ROI

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