What is SaaS Management?

Key takeaways: What you need to know about SaaS management

• SaaS Management refers to the tracking, controlling, and optimizing of all software applications being subscribed to within a business.
• It eliminates wasted spending by identifying unused or underutilized subscriptions, and preventing unwanted auto-renewals.
• It provides finance, procurement and IT teams with complete visibility and control over their SaaS stack and spend.
• It enables data-driven procurement with negotiation support and real-time pricing benchmarks.
• It provides automated license tracking and renewal workflows.
• It allows for continuous spend optimization.

SaaS Management defined

SaaS management refers to the process of identifying, managing, and governing the software applications that exist within an organization’s technology portfolio.

When software goes unmanaged, it can lead to:

• Security and compliance risks due to shadow IT and unvetted tools
• Uncontrolled spend
• Significant financial waste – often millions of dollars each year – as a result of unused and underutilized licenses, duplicate tools, and applications with overlapping functionality  

This is why organizations must invest in effective SaaS management. In fact, with the right SaaS management platform, companies can gain total visibility and control of their software stack, eliminate waste, identify cost savings opportunities, and reduce risk.

Why SaaS management matters more than ever

With software now accounting for 12.5% of an organization’s total expenditure and list prices rising by 11% each year, the financial impact of poor SaaS oversight is becoming harder to ignore.

As a result, managing these SaaS applications has never been more critical for maintaining both operational efficiency and cost control.

Here’s the problem, though. With the average organization now using 132 software applications – a figure that is rising 11% year-on-year –  the process of managing these subscriptions is becoming increasingly time-consuming and burdensome.

For one thing, it becomes near impossible to maintain visibility into what’s being used, by whom, and at what cost, meaning that companies often end up paying for:

• Unused licenses – 21% of all software applications go entirely unused within the average organization.
• Software with overlapping features – Fragmented purchasing often leads to multiple tools that serve the same purpose.
• More than one of the same tool – A common example being project management platforms which are typically used by multiple departments across a business.

Then there’s the fact that 89% of software contracts contain auto-renewal clauses, making it all too easy for subscriptions to renew unnoticed – and often at a higher price.

By identifying instances of maverick spending and shadow IT, automating license tracking and renewal workflows, and surfacing insights around usage and spend, SaaS management platforms provide finance and procurement teams with total visibility and control of their software stack, while helping to reduce costs, mitigate risk, and make data-driven purchasing decisions.

How SaaS management platforms solve finance and procurement’s biggest problems

SaaS management platforms have evolved significantly in recent years, with the leading providers going beyond just software visibility and renewal tracking, and now offering advanced automation, benchmarking, and procurement capabilities.

At their core, however, they still seek to resolve some of the most pertinent challenges faced by finance, procurement, and IT leaders. These include:

• Lack of visibility and unmanaged shadow IT – The best SaaS management platforms will automatically identify and catalog all software applications in use across an organization, including unsanctioned tools and shadow IT. This creates a centralized repository of your entire tech stack, giving the relevant stakeholders complete visibility into usage, ownership, and spend – eliminating blind spots and reducing risk.
• Missed renewals – By centralizing contract information and alerting users to upcoming renewal deadlines, SaaS management platforms can help you avoid unexpected, costly auto-renewals and missed cancellation windows. Knowing exactly when your contract is up for renewal can also lead to better negotiation outcomes and more favorable contract terms.

Companies that start negotiations 90+ days ahead of renewals achieve 49% greater savings on average than leaving it until the standard 30-day window

• Uncontrolled SaaS spend – With spend optimization capabilities, these platforms will also help you manage your SaaS spend, by continuously monitoring usage, flagging wasted costs, and providing actionable insights to rightsize licenses and eliminate redundant tools.
• Lack of pricing benchmarks – Advanced SaaS management solutions will provide you with real-time pricing benchmarks and contract data, tailored to your unique circumstances. Using this intel as leverage, you can secure more favorable terms and pricing on any contract. Peer benchmarking data is also invaluable for informing vendor selection, highlighting the tools that similar companies are investing in.
• Inefficient procurement and negotiation processes – The best software management platforms won’t just provide you with the data; they will also handle negotiations on your behalf, leveraging their own procurement expertise and vendor knowledge to help you secure better terms and maximize the value of each contract, saving you a substantial amount of time, freeing you up to focus on more strategic initiatives.
• Slow or inconsistent approval workflows – The most advanced platforms will also streamline SaaS procurement processes by automating approval workflows and standardizing purchase requisitions. This ensures each and every software request is properly reviewed and approved by the right stakeholders, reducing delays, minimizing unauthorized spend, and ensuring compliance with company policies.‍
• Lack of data to guide purchasing decisions – The right tool will provide detailed analytics on application usage across your entire tech stack, helping you pinpoint unused or underutilized subscriptions, in turn helping to inform future software investments.

A checklist of what finance and procurement leaders need from SaaS management platforms

• SaaS application discovery
• A centralized repository of all applications, users, contracts, and costs
• License usage analytics
• Spend optimization capabilities
• Renewal tracking
• Automated, customizable procurement workflows with in-workflow insights
• Vendor benchmarking data
• Negotiation support or services

Best practices for successful SaaS management implementation

1. Assess current SaaS usage

Start by taking full stock of your current SaaS tech stack. Conduct a comprehensive audit of existing applications in use across your business. Identify usage patterns, making note of any redundant apps or underutilized licenses, as these are key wasted spend areas.

2. Establish clear objectives and KPIs

Once you’ve baselined your SaaS usage, you can define clear goals for your SaaS management strategy. These should align with your broader business aims and key procurement KPIs to ensure your strategy supports overall organizational success. For instance, you might want to reduce SaaS spend by 15% across the next year as part of a wider cost-saving initiative.

3. Choose the right SaaS management platform

Utilizing a SaaS management platform (SMP) can significantly reduce the burden of managing the ever-increasing number of software applications in use across your business, but as with any purchase, it’s important that you’re making the right decision. While we have a dedicated section on this below, you should be evaluating tools based on features, scalability, and integration capabilities.

4. Centralize SaaS procurement

Implement a centralized system for acquiring SaaS applications. Friction during the procurement cycle is a leading cause of shadow IT and unauthorized purchases. A dedicated purchase requisition process where all SaaS requests are submitted and approved streamlines the process, helping remove unnecessary roadblocks to new software.

5. Monitor and optimize usage

SaaS management is an ongoing process. Once your strategy is in place, continue to regularly review usage so you can achieve full-stack observability and identify opportunities for further optimization, such as adjusting licenses or removing redundant apps. For example, you might be able to reduce spending on a particular tool if only a few team members use it. SaaS operations management platforms can help here, offering metrics like number of active users or logins per month.

6. Ensure compliance and security

Maintaining compliance with relevant regulations and standards is essential. Part of this involves maintaining top-spec SaaS security posture management to protect sensitive data. Consider implementing single sign-on (SSO) and multi-factor authentication (MFA) tools like Okta or Entra ID to provide secure access to your SaaS applications.

7. Educate and support employees

Any SaaS management strategy requires a concerted effort across your organization to remain effective. Ensure employees are educated on best practices, such as how to request new SaaS applications. Ongoing support with quarterly training sessions can keep staff updated as your software footprint and management strategy continues to evolve.

Choosing the right SaaS Management platform provider

When evaluating SaaS management platforms, it’s important to consider the following:

• Platform capabilities – The ideal SaaS management platform should do more than just track software usage. It should provide robust tools for streamlining procurement processes, optimizing spend, and managing software contracts, including renewals. When evaluating potential platforms, consider the full range of their capabilities in areas such as spend management, application discovery, and license tracking. Additionally, assess how customizable the platform’s workflows are to ensure it can scale with your company’s growth and adapt to evolving needs.
• Quality and relevance of data – The depth and accuracy of a platform’s data are critical for making informed decisions. Real-time vendor intel helps in benchmarking software pricing, optimizing usage, and negotiating more lucrative contract terms. Opt for a platform that provides tailored insights, as opposed to generic, out-of-the-box data, that align with your organization's specific needs and usage patterns. This will empower your team to make more strategic, data-driven procurement decisions.
• Negotiation support – Not all SaaS management providers offer negotiation support as standard. In our experience, the best outcomes come from the providers that negotiate on your behalf, as they can leverage not only benchmarking data, but also their own internal expertise and vendor knowledge.
• Savings guarantees – If a SaaS management platform promises cost optimization, it’s essential to know whether they offer any savings guarantees. This assurance ensures that the platform is committed to delivering a clear ROI, particularly in the form of reduced software spend. A savings guarantee also offers peace of mind, knowing that the provider has a vested interest in driving measurable value from your SaaS contracts and agreements.
• Scalability and flexibility – As your organization grows, your SaaS management platform should scale accordingly. The platform should be able to handle more complex workflows, and potentially a wider range of software vendors.

Drive strategic value with Vertice’s SaaS Management Software

Vertice not only has the capabilities to optimize your software spending for maximum cost savings and streamline your procurement processes for greater efficiency, but we also handle negotiations on your behalf, leveraging our extensive benchmarking data to ensure the very best deal on any contract.

By partnering with Vertice, you ultimately gain the hours back in your day to focus on more strategic initiatives, leaving us to handle the rest, while retaining full oversight of your software and contracts.

See for yourself how we helped one company save 115 hours on contract negotiations in the space of a few months, or how we saved another $155,000 on a single contract through our white glove service.

Alternatively, take a self-guided tour of our platform to get a better idea of how we can help you simplify your procurement efforts.