Do you know about all the Software-as-a-Service (SaaS) applications in use throughout your enterprise? How about who is using SaaS and how they are using it? Do you know why it matters?
A straw poll of the attendees of our August webinar with The ITAM Review discovered that only 20 percent of the respondents had a SaaS management tool-set in place. You may not be all that surprised. After all, since most SaaS subscriptions are based on the number of users, the license compliance risk for SaaS applications should be virtually nil, right? So, why is it important to manage and optimize SaaS applications?
A compelling business case for implementing a SaaS management solution can be summed up in two words: “shadow” and “sprawl.” Enterprises are adopting more and more SaaS solutions because they are easy to use and deploy, usually more cost-effective and, more to the point, easy to buy. Shadow SaaS refers to applications in use that IT knows nothing about. Out-of-control SaaS use is known as SaaS sprawl. While the use of SaaS applications helps enterprises be more agile and efficient, SaaS use presents significant challenges, particularly for IT, Procurement and Finance.
IT – Access and Control
Research by Cisco estimates 15 times more SaaS applications are being used in an enterprise than IT knows about. Individuals purchase subscriptions on their personal or company credit card, not knowing whether the enterprise already has a subscription in place. Or, free SaaS tools like Trello or Dropbox™ are easily accessed and adopted by departments, or even by single individuals within organizations who use their personal log-in information to work on the enterprise’s data and tasks. IT is often totally in the dark about all of it.
The IT team can’t control access and security when these “Shadow SaaS” applications are used across the enterprise.
SaaS management tools allow the IT department to learn what SaaS applications have been purchased by whom. The tools also provide integrations with single-sign-on and other technologies to provide visibility into all the SaaS accounts across the enterprise. Data is easily gathered to identify where SaaS redundancy and functionality exist, who is using the tools, when they are used and the length of each session to determine if the tool is used enough to be worth the cost. Most importantly, IT can control access to the SaaS applications by employees who have left the company to ensure their access is denied the minute they are no longer employed.
Procurement – Cost Savings and Efficiencies
One reason SaaS applications are so popular is they show great value and are easy to buy and deploy by virtually anyone in the company. Check out the September 2018 statistic from Gartner: Cloud application services (SaaS) is forecast to grow from 72.2 in 2018 to $85.1 billion in 2019. As software vendors shift their business models from on-premises licensed software to public cloud-based offerings, this trend will continue.
But that’s a double-edged sword. On one side, teams can be up and running fast. On the other side, different departments, or even teams in different countries, may sign up with the same SaaS vendor for the same application (subscription redundancies). In addition to bypassing standard procurement policies, SaaS purchasing often results in unnecessary duplication, over-licensing and under-use. In fact, Gartner research estimates 30 percent of SaaS licenses in organizations are unused or underutilized.
For Procurement teams, there are great opportunities to become more “strategic” in the process. A SaaS Management tool should provide an easy view of all the SaaS applications purchased, along with all associated usage data throughout the enterprise. With the comprehensive view of all SaaS in use throughout the enterprise, Procurement can discover ways to:
- Right-size contracts by leveraging actual usage data when negotiating and customizing contracts
- Reduce SaaS Spend by procuring/renewing only the applications and features used to maximize ROI
- Manage SaaS Renewals by tracking contract terms, license fees and important dates
- Identify SaaS Use in real time with data that shows who is using what cloud applications, how often they are used, and what features are accessed
Finance – Forecasting and Budgeting
Typically, SaaS purchasing, and usage data is siloed in the departments using the SaaS tools, if it is even available. It can take Finance teams a lot of time and effort to pull all the information together to get a global view of SaaS spend. And that assumes they know what SaaS applications are in use and where to get the data.
Forecasting the cost of the enterprise’s SaaS use is impossible when Finance doesn’t even know about a subscription to an application, who is using it, or if there are actually multiple subscriptions to the same applications. On the other hand, the Finance team may know about a subscription to a SaaS application, but there’s no data to determine if it’s really being used by employees. So, they budget to keep paying the subscription when they shouldn’t.
For Finance teams, a SaaS Management tool can provide a wealth of information in a singular, detailed view to help them accurately budget and forecast SaaS spend across the enterprise, including:
- Track SaaS expenditures across departments, by vendor or by other key business metrics
- Monitor SaaS Usage via real-time data about the use of all cloud applications throughout the enterprise
- Generate Accurate Reporting by scheduling the frequency of reports, tracking annual spend and ensuring every SaaS vendor is accounted for
At the end of the day, the end goal is to understand all the IT landscape, including SaaS, cloud-based subscriptions.
The use of SaaS applications will continue to grow as enterprises seek easier, more efficient ways to perform key business tasks. SaaS Management tools provide visibility into important use and spend data to ensure maximum value is realized from SaaS applications.
Next: Refocus your Vision to Manage SaaS
Want to know more about SaaS Optimization Best Practices? Watch the recording of our “SaaS Optimization Best Practice: Old Dog, New Tricks” webinar with the UK-based ITAM Review >>
Did you know that Flexera SaaS Manager can help you rein in your SaaS sprawl and runaway spend on more than 32,000 SaaS applications?