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As SaaS becomes a larger portion of enterprise tech stacks, many IT leaders recognize the challenge to manage and optimize their SaaS portfolio in an ongoing, continual cycle. A key aspect of that is shadow IT discovery.
SaaS discovery and evaluation conducted in an ongoing manner can produce unique advantages that allow business technology leaders to be better informed and more cost-effective with their application inventory in real time.
Increased SaaS Spend Increases Shadow IT
Analyst Gartner predicts that in 2022 overall SaaS spending will climb 18% and that cloud market share will capture around 35% of the $482 billion overall technology market.
The increase in overall spending is leading to greater SaaS application quantity among large firms. Our data shows over 600 apps on average. Identity management provider Okta recently noted that large business customers have increased the number of SaaS apps in their stacks by 68% over the last four years, now using 129 apps per customer on average. According to Zylo customer data, on average, about one-third of application inventory is integrated with an identity management solution.
Shadow IT Grows from Democratized SaaS Purchasing
More than 70% of technology spending now occurs outside of IT budgets according to the 2022 SaaS Management Index. While the democratization of SaaS purchasing and management has provided business units more control of decision-making for needed technology, the potential downside for IT teams is a lack of enterprise-wide visibility into this shadow IT.
Compounding the potential risks of shadow IT for larger organizations is the continual, unmanaged addition of unknown apps into the SaaS inventory. Based on Zylo customer data and feedback, it’s estimated that eight unique applications enter the inventory of the average organization every month. Given this fact, it’s not surprising that businesses often underestimate the actual number of apps used by the business by two to three times.
Business technology managers must be enabled to discover the full scope of applications that are currently being used by the business at the time of adoption.
SaaS Management Relies on Continual Shadow IT Discovery
For many technology managers, discovering and recording SaaS applications throughout the business is a spreadsheet-driven process. Zylo’s solves the macro-level issue of shadow IT by discovering all SaaS applications purchased and implemented within the business and creating a continually updated system of record. This visibility reveals apps that may undermine security, financial or governance best practices.
Zylo’s cloud-based application discovery also allows users to categorize the application by tagging its function or use area, as well as cost center. Associating SaaS application spend with respective business units in one platform creates an enterprise-wide view for managing critical SaaS applications across the organization. With Zylo’s Views feature, individual business units can take ownership of their respective app inventory.
Because new SaaS applications are continually being added to the enterprise technology stack, application discovery must also be a continually updated. With Zylo, businesses can engage in an ongoing process, where discovery is regularly refreshed and new incoming applications are categorized, assigned ownership and assigned to cost centers in real time.
Harness the Benefits of Shadow IT Discovery
At its highest level, continual discovery of new applications helps organizations discover what technology, apps and software their teams use.
From a security perspective, continual discovery quickly and regularly reveals SaaS apps that may have not been vetted against organizational policies and best practices for security, data or customer privacy. Applications that violate these best practices can then be promptly integrated or decommissioned.
For sourcing or vendor management teams tasked with maximizing value from enterprise-wise technology budgets, an ongoing discovery process highlights new SaaS purchases in real-time, allowing the applications to be associated to cost centers.
The increased speed of discovery and identification also allows redundant, duplicative, or non-standard apps to be identified. Then, IT teams can take appropriate actions to decrease time to value for each application.
For any team concerned with technology budget (not only sourcing or vendor management teams), continual discovery enables accurate SaaS budget forecasting by providing up-to-date cost information.
How to Create Shadow IT Discovery Processes
Answer the following questions to take concrete steps towards building a SaaS management strategy that features continual discovery.
Step 1: Evaluate current approach for creating app visibility, if any.
- How are SaaS applications currently discovered?
- When discovered, where is application categorization, ownership, cost center and performance data stored?
- How frequently is this information updated across the organization?
Step 2: Identify stakeholders essential for collaboration and validation.
- Who owns top-line responsibility for technology management?
- Who will be the designated owner of a central system of record when built?
- What business unit or team is responsible for deploying best practices for security and data best practices?
- How much ownership over managing the SaaS applications do teams or employees currently have?
Step 3: Identify KPIs that will make data actionable.
- What data will SaaS inventory decisions be based on?
- Do different teams or cost centers need different evaluation data?
- What data is critical to be updated on a regular basis?
- How frequently should data be refreshed?
Take the first step toward continual shadow IT discovery and real-time decision-making for SaaS Management: Create a centralized, collaborative SaaS system of record. Request a demo to understand how Zylo delivers continual discovery and data updates for improved SaaS management decision-making.
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