Breaking Down Phase One of the Enterprise SaaS Management Framework

A SaaS Management strategy and program is essential for organizations to mitigate the financial, security, and operational risks of subscription-based software. Because it’s a newer business practice, many IT, Software Asset Management, and Procurement leaders often struggle to get started. Zylo’s SaaS experts suggest following the Enterprise SaaS Management Framework, beginning with Phase One. 

What Is the Enterprise SaaS Management Framework?

Zylo’s proprietary Enterprise SaaS Management Framework is the operating model for SaaS Management. It helps organizations understand how to:

• Maximize the value of their software
• Enable timely data-driven decision making
• Create accountability between IT, Software Asset Management (SAM), Procurement, and business teams

The framework consists of four key elements

• Disciplines – An area of activity
• Capabilities – Functional activities that can be performed as part of a Disciplines
• Tactics and Actions – The necessary steps required to execute each Capability
• Key Performance Indicators – Metrics to measure outcomes and progress within each Capability

Phase One: 6 Steps to Establish a Foundation for SaaS Management

While it’s tempting to address all of your applications at once, it’s not realistic. That’s because companies today have hundreds of applications – 269 on average. 

Instead of trying to boil the ocean, it’s best to take a phased approach. Start small, then build and optimize from there. Follow these steps to create a strong foundation for long-term SaaS Management success.

Step #1: Build an Enterprise SaaS System of Record

A SaaS system of record is the central, authoritative data source for all of the SaaS deployed across an organization. And it’s the cornerstone and starting point of your entire SaaS Management program. 

No matter your goals, you need to have reliable, up-to-date, continuous discovery of all SaaS — no matter who purchased it and how it was purchased. After all, data is greater than opinion and should drive all your business decisions.

To begin building your system of record, you’ll need to have a SaaS Management Platform (SMP) in place. From there, initiate the discovery process by connecting your financial data sources. An SMP like Zylo provides always-on discovery using AI to uncover all the SaaS apps in your environment.

Step #2: Strategic Portfolio Management

During the discovery process, you’ll likely find hundreds of apps. A strategic portfolio management approach is required to understand each application’s importance to your business. Typically, they are categorized into three tiers.

• Tier One – Essential, enterprise-wide “birthright” apps that are centrally managed by IT, core strategic solutions, or those that involve the highest spend.
• Tier Two – Applications critical to business processes that are supported rather than owned/managed by IT. Multiple departments may use them and often integrate with Tier One apps.
• Tier Three – Applications adopted by individual employees and/or departments for specific needs and use cases. They don’t directly integrate with core systems and do not require IT support.

Start with your Tier One applications. Often, they’re some of the largest applications in use across your company and managed. In addition, they are managed by a single team typically tightly aligned to SaaS Management success.

Once you’ve generated outcomes on your Tier One applications, it’s easier to mature your program and expand to your Tier Two and Three applications.

Learn how Trenton Cycholl, VP, Digital Business at ModMed, approaches Tier One applications in the following clip from the SaaSMe Unfiltered Podcast. 

Step #3: Application Onboarding

You’ve established a SaaS system of record and know what your Tier One applications are. Next, it’s time to onboard those applications into your SaaS Management Platform. 

What this means is that you’re adding and centralizing all the relevant information about each Tier One application. Often, that includes contract SKUs and entitlements, application owners, license utilization—and other data important to your business.

Once all the data is in your SMP, it’s also important to set up alerts to monitor and manage your inventory proactively. This may include the detection of new app purchases and/or upcoming renewals.

Step #4: Run License Workflows

Examine usage data and identify inactive users for your Tier One applications. From there, determine which are the best candidates to reclaim licenses for. Typically, that’s apps with low utilization and/or upcoming renewal date.

Use your SaaS Management Platform to automate this process for you. For example, Zylo’s Workflows automatically notifies users who haven’t used their licenses within a certain period of time.  

At minimum, you should run a license reclamation workflow at least 90 days before each renewal. Ideally, license reclamation should happen on a regular basis throughout the year.

Step #5: Showcase Cost Savings & Inefficiencies to Executives

Demonstrating the value of your SaaS Management program is critical to ongoing prioritization and commitment across the business. You can do this by highlighting the potential cost savings and inefficiencies.

Use an executive SaaS Management dashboard to provide visibility into all key performance metrics and show progress toward your goals.

Step #6: Establish System of Record Management

Your data is only as good as your upkeep. The final step is to update your existing onboarding processes to ensure new apps are properly brought into the organization and the user/owner data remains current. For instance, you may want to add a step to your renewal process to confirm the app owner 120 days ahead of the renewal date.

In addition, this is a good time to provide additional departments access to your system of record. This is essential to support ongoing SaaS visibility and management. When all stakeholders work from a single, central source of truth and insights, it enables more effective cross-functional collaboration and holistic SaaS Management.

Get Started with The Definitive Guide to SaaS Management

SaaS Management is a relatively new category and practice, so it’s okay if you’re not completely sure how it works. Instead, let us be your guide on your SaaS Management journey! 

Since pioneering SaaS Management 8+ years ago, Zylo has helped hundreds of customers successfully implement a SaaS Management solution and program. The No-BS SaaS Management Playbook distills our experience, offering a step-by-step approach to building an effective, programmatic practice — and avoiding the most common pitfalls we’ve seen. 

Download the playbook to take a deeper dive into Phase One of the framework and start your program off on the right foot.