4 Ways to Drive Enterprise SaaS Cost Savings

Eric Christopher

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We interact with a lot of teams across the spectrum of technology acquisition and management here at Zylo. From procurement, sourcing, and vendor management teams to CIOs, enterprise architects, and software asset managers, there’s a wide range of disciplines interested in reducing the potential risks from explosive SaaS growth and optimizing the value of their SaaS portfolio investment.

Here are four ways to leverage cost savings and improve the value of your SaaS investments.

Eliminate Duplicate or Redundant SaaS Applications

SaaS applications for business teams are incredibly easy to purchase and easy to deploy – but also easy to forget. Coupled with the fact that SaaS ownership is frequently in the hands of teams or employees – and not centrally managed by IT – there’s also the potential for duplication or redundancy across the organization. According to IDC, more than 50% of all technology spending by businesses falls under line of business budgets, not IT.

When Zylo initially works with new customers, they often find they’ve underestimated their application inventory by two to three times. Much of this is comprised of duplicate applications, as well those with overlapping functionality. Cutting this application “fat” and eliminating applications frequently leads to significant cost savings.

To identify SaaS duplication, technology managers must engage in a discovery process to identify what applications are present across the organization. A SaaS management platform can speed this process.

After every application has been identified and placed in a central system of record, value-focused teams can begin the collaborative process of eliminating applications that are no longer needed, consolidating applications to reduce overall spend (more on this later), and standardizing applications for specific business functions.

Proactively Manage SaaS Renewals with a Renewal Calendar

Mismanaged renewals are another contributing factor to the proliferation of SaaS. Automatic renewals have the upsides of continuity and convenience, but missing a renewal date effectively locks the business into a new billing cycle — whether the application is needed or not. Preventing an unneeded renewal presents a significant opportunity to recoup value. On average, Zylo customers experience sixty SaaS renewal periods every month.

To avoid the cost of missed renewals, we recommend using the system of record established in the discovery process to build a proactive renewal calendar. Just as each application should have its functional category, owner, cost center, and value listed in the system of record, its renewal notification period and renewal date should also be noted.

By planning dates in advance and prioritizing application renewal decision-making by value and impact to the organization, technology managers can ensure that automatic renewals are proactive, not reactive, and that value is preserved.

Reprovision or Eliminate Underutilized Licenses

How many SaaS licenses in your organization go unused or underused? Measuring your SaaS tech stack with a focus on utilization, then managing applications based on that data is another way to reap more value. Zylo customer data has shown that 35 to 40 percent of all SaaS licenses are under-utilized.

Imagine the following scenario: Your organization has a large enterprise-wide SaaS application like a CRM. The tool’s contract affords a finite number of seats to deploy to users. How can technology managers ensure that provisioned users are using their seats in a way that maximizes their value?

For many organizations, this is where a SaaS management tool comes in handy, especially if it features direct integrations into multiple applications.

By measuring logins and other activity, teams responsible for optimizing SaaS can deploy workflows to identify underutilized seats and, if necessary, reprovision them to users who will use them more actively. If there is not a group of users who can make use of unused seats, the contract can be right-sized at renewal.

Focus on Leveraging Enterprise License Agreements

The converse of not enough users for an application is finding that multiple users have deployed multiple discrete instances of an application throughout the enterprise without a unifying license agreement in place. A proven way to recover value from existing SaaS spend is to consolidate these disparate instances under a single enterprise license agreement (ELA).

Not only are SaaS vendors more likely to provide a better overall per-user rate with an ELA, but it provides additional options such as multi-year discounts, caps on price increases, and clauses specific to security and governance, further protecting the organization.

To learn more about Zylo’s recommendations for SaaS management and value optimization, and about Zylo’s SaaS management solution itself, contact us to schedule a demo.  

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About the Author

Eric Christopher

Eric Christopher is CEO and Co-Founder of Zylo, the leading SaaS management platform. After 14 years of buying and selling software, Eric knew there had to be a better way to manage cloud applications within a company. Eric started his career in sales at ExactTarget from 2002 to 2010. He spent the next six years in Chicago leading sales teams at Shoutlet and Sprout Social Inc., and founded Zylo in 2016.