Everything you need to know about SaaS management
Aimee Manning | NOV 07, 2022
For the average business, the use of SaaS has become integral not only for growth, but also for survival. Why? Largely because of the flexibility and cost savings that SaaS allows for.
But this increasing dependence on enterprise software doesn’t come without its challenges.
In fact, as more tools come to market and as more purchases are made without knowledge or approval of the finance, IT or procurement teams, SaaS spend can very quickly escalate.
As can the risk of security and compliance issues.
So, what’s the solution? How can you keep on top of your ever-growing SaaS stack, while keeping costs to a minimum and preventing shadow IT?
In short, with effective SaaS management.
Throughout this guide, we will explain exactly what SaaS management is and what it entails. More specifically, we’ll detail the steps you need to take to gain total visibility of your software portfolio and optimize your spend.
What is SaaS management?
SaaS management is the process of identifying, managing, and governing the software applications that exist within an organization’s technology portfolio.
When software goes unmanaged, it not only puts the business at risk of data breaches and security issues, but it can also lead to a substantial amount of wasted spend as a result of redundant and duplicate SaaS apps, not to mention unused licenses.
The importance of SaaS management
There’s no denying that cloud-based software applications offer substantial benefits to businesses, including lower costs and greater flexibility to scale. But the accessibility of software has ultimately transformed the way that companies purchase these applications. Or more specifically, the way that employees purchase them.
Ultimately, with increased autonomy comes decentralized purchasing. Something that’s causing huge issues for IT, procurement and finance teams alike.
Challenges that include:
- Lack of visibility into the software being used across the organization
- Wasted SaaS spend caused by duplicate, redundant, unused and costly licenses
- Increased security and compliance risks, including shadow IT and data exposure
The question, therefore, is how can you prevent these challenges?
How to build and implement a SaaS management strategy
Understanding the importance of SaaS management is just the first step. To achieve both oversight and control of your SaaS stack, you will need to take a number of steps.
Discover your software
In order to effectively manage your SaaS portfolio and optimize your spend, you need to know which software applications exist within your organization. More specifically, you need to discover and catalog them.
For many organizations, this is easier said than done. After all, companies with more than 1,000 employees use an average of 177 different SaaS applications, which is a substantial amount of tools to get on top.
So, how do you do it? How exactly do you identify these tools?
In short, by using a combination of these different SaaS discovery methods:
- Browser extension — By implementing a browser plugin on company devices, you can detect the software that is being used throughout your organization.
- Single Sign On (SSO) — SSO tools can provide you with user names, device times, access times and usage.
- CASB platforms — Cloud Access Security Broker (CASB) platforms can be used as another source for discovering SaaS apps.
- Financial systems — Your company’s financial data is one of the more reliable approaches for identifying subscriptions.
- Manual spreadsheet — Keeping track of software usage manually can help to paint a picture of the software being used across the organization, but as with anything manual, it is prone to human error.
When it comes to SaaS discovery, it’s not just about identifying the software applications that are being subscribed to though. It’s also about capturing the relevant information about each app.
Information such as the:
- Number of SaaS licenses for each application
- Cost per application
- Start date
- End date
- Termination notification length
- Total contract value
- Total quantity of licenses
- Billing frequency
- Additional line-item details, for example unit price per license, license allocation etc
- Data handling and regulatory compliance
Develop a SaaS system of record
To gain full visibility of your technology portfolio, all information needs to be accessible from a single place.
In other words, you need what is known as a SaaS system of record — a central location that contains all details regarding the SaaS applications in use across your organization.
Why’s this so important?
Well, aside from having full oversight of your SaaS stack, it also enables you to:
- Stay on top of impending software renewals, giving you enough time to terminate your contract or leverage better contract terms
- Track SaaS spend
- Avoid SaaS overlap
Creating a SaaS system of record isn’t just a one-time activity though. It needs to be maintained and updated. In real-time, ideally — a process that is best automated.
Optimize your SaaS stack
Only once you have total oversight of the software in use (or not) across your organization can you begin to optimize your SaaS stack.
But what does this entail?
First up, you need to carry out application rationalization. In other words, you need to analyze the utilization and value of each software application, to ultimately identify whether it should be kept, replaced, retired, or consolidated.
This is far more than a quick audit though. It requires you to take a closer look at your SaaS stack and justify the use of each application.
Which is all the more important given that as much as 38% of enterprise software is either unused or rarely used.
By rationalizing each application, you can:
- Benefit from cost savings
- Identify software with more than one subscription (or excess licenses)
- Identify software that has overlapping functionality
- Ensure all software is data compliant
- Improve employee effectiveness by eliminating app overload
But what does application rationalization consist of?
- Compiling an application inventory
- Understanding company usage and business value
- Gaining insights from the application users
- Identifying what can be eliminated, consolidated, or replaced
Learn more about conducting application rationalization here.
Centralized SaaS purchasing
When SaaS purchasing is decentralized, the risk of maverick spending and shadow IT increases exponentially.
The only way to prevent this and gain total control of your SaaS stack is by establishing and maintaining a standardized, centralized policy for procuring software.
The best way to do this?
When you have total visibility of the software being subscribed to across the business from a single place, as well as an automated procurement process, you can:
- Keep your SaaS spend under control
- Identify opportunities for cost savings
- Ensure total application compliance
- Track and monitor SaaS renewal cycles
- More easily navigate the approvals process
Effective renewal management
Another benefit of automated SaaS management is that it allows you to keep on top of your SaaS renewals.
Sure, manual tracking can certainly work when you’re managing only a handful of software applications, but given that the average organization uses hundreds of tools — contributing to what can only be described as a Frankenstack — it can become incredibly easy to lose oversight, miss renewal dates, and end up paying for both expensive and unwanted subscriptions and licenses.
Reduce your SaaS spend & secure better contract terms with Vertice
With so much money being wasted on SaaS, not to mention soaring inflation rates, it’s never been more important to look for ways to streamline your tech stack and reduce your spend.
But what are your options? Aside from identifying duplicate, redundant and unused SaaS, that is?
Well, perhaps the first place to start is by reducing the cost of your SaaS subscriptions. Most of the time, the prices listed on a vendor’s website aren’t set in stone. There is almost always room for negotiation. The problem, however, is that many software buyers aren’t aware of this, meaning that 90% are paying 20-30% more on average than they could be.
So, what’s the solution?
More specifically, it’s knowing just how willing the vendor is to offer a discount and how much other companies are paying for the same subscription.
At Vertice, we can provide you with this leverage and ensure you’re getting the best possible deal on any subscription. Why not see for yourself how much we can save you with our free cost savings analysis tool.