SaaS applications let employees across various departments complete processes at ease and increase the workforce’s productivity. As Gartner reports, the dramatic boom in the SaaS industry does not seem to change course any time soon.
The rapid increase in SaaS applications, on the other hand, imposes various risks and challenges. Managing what was once a small set of apps has become impossible now. Today, an average company uses twenty times more SaaS apps than it did five years ago. For big companies, the growth is even huge.
The overall spending on SaaS also has increased tremendously. SaaS apps altogether cost industries a vast sum of money these days. Apart from the cost, whenever a new employee joins or goes out of the organization, the IT teams require a lot of time and effort for the onboarding/offboarding processes. There also exists risks of shadow IT and security threats in this trend.
SaaS spend optimization refers to deducting costs and money spent on SaaS apps and the act of managing contracts, usage, and compliance. Considering the usage and wastage in the SaaS apps, organizations need to control the SaaS spending and make sure that their budget is used effectively and necessarily wasted. Optimizing SaaS spend is an active SaaS management process that may reduce the number of SaaS apps or licenses and right-size contracts in a company.
Approaching SaaS Spend Optimization
To optimize SaaS spending in the best way possible, we need to evaluate and prioritize all of the SaaS apps. As opposed to mass cutting on all SaaS apps, a complex engagement with the usage of apps by the employees and an understanding of the hidden costs and charges is essential for SaaS spend optimization.
Visibility is Key
The key aim is to procure as much data on the SaaS apps as possible. Having deep insights and data on the SaaS apps allows for proper visibility of the trends in the SaaS stack. Adequate visibility is important for facilitating effective optimization and understanding SaaS spend optimization. The collection of maximum data on the various levels in the organization environment is, thus, necessary.
- Identification of the SaaS Stack
- Collect contract data
- Collect usage data
- Collect user data.
Regular monitoring of SaaS apps is integral for optimizing SaaS spend. This helps IT teams gain control over their SaaS stack. Without a centralized system of record, different teams in an organization might not be able to collaborate effectively. One group in an organization might be using a service provided by a provider, and another group in the same organization might be using the same service provided by a different provider. In such cases, these groups will not be able to collaborate effectively.
Renewal policies for apps may differ from one to another; therefore, it is advised for the IT teams to cross-check renewal dates and subscription plans. In addition, the absence of timely renewals may create breaks in the work periods.
A proper SaaS management tool centralizes all the SaaS apps and allows managing and controlling all of these under the same window. This will help reduce the workload and increase the productivity of the IT team. In addition, a good SaaS management platform provides insights into app usage and timely alerts when nearing the renewal dates.
Centralized monitoring helps in reducing the workload for IT teams. Onboarding/ offboarding time-consuming processes can be done in a single click through a proper SaaS management tool. These tools also track renewal dates and subscription data, thereby helping IT teams not to lose track of their SaaS apps.
Shadow IT is when IT systems and software are used and managed without the knowledge or approval from IT teams or stakeholders. Businesses of all sizes are bound to experience this. Shadow IT possesses risks and threats to the security of the organization. Therefore, it is important to have an authorized product list and to make sure no unauthorized software is being used in the organization. Shadow IT also occurs when duplicates of the same software license exist across the organization. Overlapping products are also considered Shadow IT.
A significant part of an organization’s budget is unnecessarily wasted due to Shadow IT. Overlapping products and duplicate software licenses cost a huge sum for the organization. Controlling shadow IT can help effectively optimize SaaS applications.
Optimizing SaaS spend involves analysis and understanding of the total SaaS stack. While reducing the costs of the SaaS environment, Optimizing SaaS spend also enables more productivity and insights into the organization’s work trends.
It also helps in reducing ineffective collaboration. Redundancy and overlapping applications lead to wastage of the budget spent. Proper optimization of SaaS spend improves the workforce’s productivity and reduces workload, at the same time reducing wastage of money. Therefore, optimization of SaaS spend is important to businesses of all shapes and sizes.