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SaaS usage is growing faster than a viral TikTok video. (OK, not quite. But it’s growing really, really fast, OK?)
Every 30 days, a typical company adds at least eight new applications to its environment—and three applications exit active use. That’s a lot of turnover and a lot of room for expensive confusion. It’s also partially why up to 12% of SaaS applications in a large organization are the result of a duplicate purchase.
Q: How can IT teams keep these numbers in check for their own organization?
A: With a SaaS sourcing optimization tool.
Why you need a SaaS sourcing optimization tool
What, exactly, is an optimization tool for sourcing SaaS? It’s one of the descriptions we have for a SaaS Management Platform (SMP). These tools help you reduce the negative impact of shadow IT and employee-driven procurement, reduce security risks, and limit the number of strategic endeavors that get disrupted.
First up, a SaaS sourcing optimization tool will help you limit the chaos of employee driven procurement.
IT continues to own less SaaS spend and manage less of the organization’s apps. According to the 2022 SaaS Management Index, IT now owns 27% of SaaS spend and 23% of apps. That’s a 35% decrease in spend and 9% decrease in quantity over last year. In turn, business units continue to own more SaaS spend. Individual lines of business now own 66% of SaaS spend—a 22% increase over last year.
With direct control or at least visibility into this spend, SaaS sourcing is far from optimized.
This decentralized sourcing approach can lead to security risks, too. Shadow IT continues to grow both in terms of spend and quantity. This means employees are more likely to go and get the tools they need on their own—without IT being able to jump in and put the right procurement process in place or even require single sign on (SSO) for security purposes.
Application Catalog: What it is and what it does
In a phrase, Zylo’s App Catalog lets employees find out which tools are already being used in your organization and source their own tools with a curated, pre-vetted list of approved software specific to your business.
Drive Awareness of Business Tools
The biggest challenge many companies face in software governance is creating visibility and transparency to what software is available to employees, and “get out of the way of them getting access to it,” so employees can quickly acquire the tools they need to effectively perform their work.
Give users direct visibility into a curated selection of pre-vetted cloud software and SaaS applications and eliminate “Who owns what?” tool requests.
If an app is searched for but not found in the company’s App Catalog instance, apps present in the catalog with similar functionality will be recommended.
Fast-track Employee Onboarding
App Catalog provides a cost-effective and efficient way for new hires to not only gain access to basic tools required for their roles but also provides them the option to self-select tools that can help them be more productive in their work.
With a single source for approved SaaS applications, App Catalog gives employees the tools they need to do their jobs on day one.
Give Users Clear Lines of Communication
With a one-stop-shop for business applications, users know who owns what and can learn more about how an application is used in their business so they can make informed requests for application access, reducing friction and time to value.
Admins are able to add information about each application they publish to the catalog, including any prerequisites or steps needed to gain access to an application, what roles can access specific applications, references to internal subject-matter experts, and links to web pages for best practices or how-to instructions for company-specific application use cases.
Within the App Catalog, employees can find info about an application they may need, including its categorization, designated function, whom to contact with questions about the app or to request access, and any other relevant details.
Change your procurement approach with a SaaS sourcing optimization tool
A SaaS optimization tool doesn’t just help you get organized with what you have in place already—it also sets you up for a more strategic, informed procurement approach across the organization.
Here are a few ideas to get you started:
- Develop a strategy for SaaS procurement. Sourcing SaaS tools isn’t the time to let employees (entirely) run the show. Build a strategy (that works for your specific org) by setting expectations, setting a standard intake process, discovering existing apps, determining thresholds and building relationships with business owners. (Read more right here.)
- Build visibility into total SaaS spend through the procurement process. Procurement often lacks visibility into existing spend, making optimization difficult. By making sure the buying committee knows what’s being spent (and where) you make sure they can spend their dollars more effectively and efficiently.
- Proactively manage renewals. Optimizing your SaaS procurement isn’t just about looking backward—it’s about getting proactive with your upcoming sourcing and spend. A big part of that is optimizing your renewals to create more budget in procurement for necessary tools.
- Consider partnering with a SaaS discovery and management provider like Zylo. Working with Zylo is proven to ease the burden of SaaS management and make it easier for you to control costs and risks—while still providing employees with access to the SaaS applications that make them effective.
Want to learn a bit more? Talk to us.
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