Data Centralization: 7 Steps to Onboard SaaS into Your System of Record

Effective SaaS Management begins with a foundational step: creating a single source of truth. Organizations can achieve comprehensive visibility into their software ecosystem by using a SaaS Management Platform (SMP) as their SaaS system of record. This centralized data approach enables accurate inventory management, reduces operational inefficiencies, and empowers data-driven decision-making.

Onboarding your applications to an SMP is essential to building a scalable SaaS Management program. It marks the first milestone in Phase One of the Enterprise SaaS Management Framework, laying the groundwork for optimized license utilization, streamlined renewals, and enhanced governance.

According to Zylo’s 2025 SaaS Management Index, decentralized purchasing creates blind spots, with IT managing only 26% of SaaS spending and 16% of applications. Onboarding apps into an SMP eliminates these gaps by consolidating information into a centralized system. This step ensures every application is accounted for, enabling organizations to unlock the full potential of their SaaS investments.

What Is Data Centralization?

In the context of SaaS Management, data centralization refers to consolidating application data into a single, unified platform to gain complete visibility and control over your organization’s software ecosystem. By onboarding SaaS applications into a SaaS Management Platform (SMP), businesses can establish a centralized source of truth, ensuring that all critical information—such as usage metrics, license details, and renewal schedules—is stored in one accessible location.

This process simplifies the management of your SaaS portfolio by eliminating data silos, which often occur due to decentralized purchasing and fragmented ownership. For example, many organizations struggle to track SaaS usage effectively, with only 47.3% of licenses actively utilized on average. A centralized data approach improves visibility and drives cost efficiency by identifying unused or redundant licenses.

By onboarding applications into your SMP, your organization transitions from scattered, manual tracking methods to an automated, scalable system of record. This step ensures that your data remains up-to-date and actionable, setting the foundation for strategic decision-making and streamlined SaaS Management processes.

The Challenge of Decentralized and Fragmented SaaS Data

As organizations embrace SaaS to drive innovation, many are discovering the drawbacks of fragmented and decentralized software management. Without a centralized system of record, critical data becomes scattered across departments, creating inefficiencies, risks, and missed opportunities for optimization.

Increasing SaaS Spend, Sprawl, and Risks

SaaS adoption has skyrocketed—but so has unchecked spending and risks. This is due in large part to decentralized purchasing across the organization. IT’s software ownership continues to dwindle, with only 26% of SaaS spending and 16% of applications being under their purview. 

Let’s break down the impact on the average organization:

• SaaS sprawl. Today, the average organization has 275 SaaS apps in its portfolio. In addition, 7 new apps are added each month on average, or 91 annually. That means, left unmanaged, your portfolio could grow 33%, exacerbating SaaS sprawl.
• Spending. As your portfolio grows, so too does your spending. We saw this happen in 2024, where organizations spent $49M on SaaS, a 9.3% increase.
• Security risks. Lack of visibility into all SaaS also increases exposure to security risks from unvetted applications. More than half (51%) of apps have a “Poor” or “Low” security risk score, based on our partner Netskope’s Cloud Confidence Index.

Poor Decision-Making

When SaaS data is incomplete or inaccessible, decision-making suffers. Fragmented information prevents organizations from understanding their true software needs or negotiating effectively with vendors. For instance, with an average of 247 SaaS renewals annually—nearly one every business day—poorly managed renewal processes can result in higher costs and suboptimal contracts.

Collaboration and Data Silos

Fragmentation also impacts cross-functional collaboration. Data silos between IT, Procurement, and department leaders hinder alignment and reduce the organization’s ability to maximize the value of its SaaS investments. For example, without centralized data, IT may not have the insights needed to optimize usage, while Procurement may struggle to identify cost-saving opportunities during renewals.

The Importance of Data Centralization

Centralized data is a cornerstone of effective SaaS Management. By consolidating information into a single source of truth, organizations unlock significant advantages in security, collaboration, decision-making, and overall efficiency.

Enhancing Data Quality and Integrity

A SaaS Management Platform ensures data accuracy and consistency by automating the collection and organization of information. Manual methods, like spreadsheets, are prone to errors and quickly become outdated. Centralized data improves integrity by creating a continuously updated record that reflects the real-time state of your SaaS ecosystem.

Strengthening Data Security

Decentralized SaaS purchasing increases the risk of shadow IT, leaving organizations vulnerable to data breaches and compliance violations. By centralizing data, businesses can monitor and manage their applications more effectively, address security gaps, and mitigate risks.

Promoting Accessibility and Collaboration

When data remains siloed across departments, collaboration becomes a challenge. Centralized data fosters cross-functional alignment by ensuring that IT, Procurement, Software Asset Management (SAM), and department leaders have access to the same insights. This shared visibility enables teams to work together more effectively, whether optimizing licenses or preparing for renewals.

Boosting Efficiency in Data Analysis

A unified data source eliminates the need for time-consuming manual reconciliations, allowing teams to focus on actionable insights. Centralized data streamlines analysis by providing a holistic view of your SaaS portfolio, making it easier to identify usage trends, cost-saving opportunities, and areas for improvement.

Driving Effective, Data-Driven Decisions

Reliable data underpins strategic decision-making. With a comprehensive view of SaaS usage, spending, and risks, organizations can make informed choices about licensing, renewals, and vendor negotiations. This proactive approach ensures that resources are allocated where they deliver the most value.

Enabling Operational Agility and Adaptability

Centralized data supports adaptability by providing a clear, real-time picture of your SaaS environment. Whether scaling operations or responding to new business needs, organizations can pivot quickly and confidently when their data is accessible and reliable.

7 Steps for Onboarding SaaS Apps into Your System of Record

Onboarding SaaS applications into your system of record is a multi-step process that creates a centralized foundation for effective management. Organizations can streamline this process using a SaaS Management Platform (SMP), which replaces outdated methods like spreadsheets and legacy Software Asset Management (SAM) tools.

Step 1: Establish a SaaS System of Record

An SMP serves as your single source of truth, providing a comprehensive, real-time view of your SaaS ecosystem. Unlike spreadsheets or legacy SAM tools, which require significant manual effort and often fail to capture shadow IT, an SMP continuously automates discovery and updates. Zylo’s AI-powered platform leverages enriched data to deliver unmatched visibility and insights.

Step 2: Identify Tier One Applications

Tier-one applications are often core, enterprise-wide solutions that drive critical business processes. They include apps centrally managed by IT, those with the highest spending, or platforms integral to multiple departments. Examples include Google Workspace, Microsoft 365, and Salesforce.

Why Prioritize Tier One Apps?

Starting with Tier One apps ensures your SaaS Management efforts deliver immediate value. These applications typically have the largest user bases and highest costs, making them prime targets for license optimization and usage tracking. Additionally, success with Tier One apps establishes a solid foundation for scaling to Tier Two and Three applications.

Step 3: Assign Application Owners

Assigning clear ownership for each application ensures accountability. Owners are responsible for overseeing usage, contract management, and renewal processes, helping to eliminate inefficiencies and avoid duplication.

How to Find and Assign Owners

You can determine application ownership by identifying the teams or individuals who rely most on a tool. For example, a department head may oversee a marketing automation platform, while IT might own identity management tools.

Set Up Owners as Users in Your SMP

Owners should be added as users in your SMP, granting them access to relevant insights and data. This allows them to actively manage the application within the system of record.

Train App Owners

Training owners on how to use the SMP is essential for long-term success. Focus on providing clear guidance on tasks like monitoring usage, managing contracts, and setting up renewal alerts.

Step 4: Connect Usage Integrations

Usage integrations are essential to understanding how applications are being utilized and who is using them. This enables organizations to optimize licenses and identify underused tools. Without these insights, decision-making is often based on incomplete or outdated information.

Types of Usage Integrations

Usage integrations vary by application but typically include user activity, license utilization, and cost data. Zylo’s Usage Connect differentiates itself by delivering deeper insights through advanced integrations, empowering organizations to maximize their software investments.

Step 5: Add Key Application Data

An SMP automates much of the data collection process, but some information will need to be manually added by individuals.

Application Metadata

Metadata includes foundational details such as annual spend, SSO status, and business criticality.

Contracts

Storing the contract information in your SMP, such as autorenewal clauses and termination dates, ensures easy access during renewals and negotiations.

Usage Data

Tracking usage metrics allows for accurate license optimization and highlights opportunities for cost savings.

Owners

Clearly define ownership roles:

• Application Owners oversee app-specific tasks and processes.
• Business Owners ensure alignment with department objectives.
• IT Owners manage technical integrations and security.
  

Step 6: Set Up Alerts

Automated alerts in an SMP keep your SaaS ecosystem proactive and organized.

Renewal Milestone Alerts

Renewal alerts—120, 90, and 60 days out—ensure sufficient time to renegotiate contracts or optimize license counts.

New Software Purchase Alerts

Alerts for new software purchases allow for immediate onboarding into your system of record, reducing the risk of shadow IT.

Step 7: Onboard Tier Two and Three Applications

After onboarding Tier One applications, follow the same process for Tier Two and Three apps. While Tier Two apps are typically departmental solutions, Tier Three includes long-tail applications used for niche purposes. By incorporating all tiers, your organization achieves complete SaaS visibility and management.

The Impact of a Centralized SaaS System of Record

Implementing a centralized SaaS system of record delivers measurable benefits that extend beyond software management, transforming how organizations operate and collaborate.

Improved Visibility and Control

A centralized system eliminates blind spots caused by decentralized purchasing and shadow IT. With real-time insights into applications, spend, and utilization, organizations can maintain full visibility and better control over their SaaS ecosystem. This clarity is essential for making informed decisions and maximizing the value of your software investments.

Cost Savings and Optimization

Centralized data provides a clear picture of underutilized or redundant licenses, allowing organizations to reclaim and reallocate resources effectively. Additionally, centralized visibility empowers Procurement to negotiate better renewal terms and consolidate tools, driving substantial cost savings.

Streamlined Processes Across Teams

Collaboration improves when IT, Procurement, SAM, and department leaders have access to a shared source of truth. Centralizing SaaS data simplifies critical workflows such as renewals, license optimization, and application rationalization, enabling teams to work in unison and achieve aligned outcomes.

Strengthened Security and Compliance

Centralized SaaS Management enhances security by identifying and addressing risky applications. By ensuring that all apps align with organizational policies and compliance requirements, businesses mitigate potential vulnerabilities and safeguard sensitive information.

Scalability for Future Growth

As your organization evolves, a centralized SaaS system of record provides the foundation for scalability. It enables adaptability to changing business needs, simplifies onboarding of new applications, and supports the seamless integration of future technologies.

Future-Proofing Your SaaS Management

Data centralization doesn’t just address today’s challenges—it prepares your organization for the future. With a SaaS Management Platform, you gain access to advanced capabilities like AI-driven analytics and predictive insights that inform strategic decisions. As automation continues to evolve, centralized data positions your organization to leverage new technologies and stay ahead in an increasingly competitive SaaS environment.

Common Pitfalls When Centralizing SaaS Data and How to Overcome Them

While centralizing SaaS data offers immense benefits, there are challenges organizations must navigate during implementation. Being aware of common pitfalls can help ensure a smoother process and maximize the value of your SaaS Management Platform.

Lack of Executive Buy-In

Without support from leadership, SaaS centralization efforts can stall. Executive buy-in is critical to align cross-functional teams and secure the resources needed for success. Focus on presenting a compelling business case, highlighting cost savings and operational efficiency as primary outcomes.

Neglecting Shadow IT

Many organizations underestimate the scale of shadow IT, with decentralized purchasing leading to untracked applications. An SMP like Zylo uncovers these blind spots, ensuring every application is accounted for and brought into your system of record.

Delayed Renewal Preparation

Renewals are a critical opportunity to optimize SaaS investments. Organizations often miss this window due to poor planning or fragmented data. Setting up automated renewal alerts in your SMP helps ensure proactive contract renegotiation and cost-saving adjustments.

Incomplete or Inaccurate Data Integration

Relying on manual methods or fragmented systems to populate your SMP can lead to errors. Use the automated discovery features of an SMP to ensure accurate and comprehensive data integration, saving time and reducing risk.

Transform SaaS Management with Centralized Data

Onboarding SaaS applications into your system of record is the first step toward achieving data centralization and unlocking the full potential of your software investments. By leveraging a SaaS Management Platform, your organization can streamline operations, enhance collaboration, and confidently make data-driven decisions. Starting with Tier One applications and progressing to Tiers Two and Three ensures a scalable approach to creating a comprehensive, centralized source of truth.

Ready to see how centralized data can revolutionize your SaaS Management? Schedule a personalized demo with Zylo to explore how our platform empowers organizations to optimize licenses, streamline renewals, and eliminate inefficiencies.