Let’s walk through a typical Monday morning work routine of a startup employee: maybe they log on and check Slack first for anything critical, then open up Superhuman to triage their inbox before jumping into a project.
Important messages out of the way, they open up Asana to grab that Dropbox link they need to get started on a project. They have a few questions, so they record a quick Loom video to send over to their colleague. After a couple of hours of work, they get pinged with a calendar notification and jump on Zoom for the week’s standup.
That’s six SaaS products before Noon. (Seven, if you count the SSO they used to log in.)
It’s time for IT professionals and SaaS Management pros to get on top of SaaS licenses with specific insight into how employees are using their tools (and when they’re not).
Why Manage SaaS Licenses?
As employees’ dependence on SaaS to do their jobs grows, the amount companies spend on SaaS is growing in lockstep.
The example above was just the tip of the iceberg—an average company maintains 323 SaaS applications at once. SaaS Management has become a dance between keeping employees productive while keeping Saas spend in check at the same time.
First up: employee effectiveness. Forrester found that two out of three Gen Z and Millennial knowledge workers say autonomy in choosing the apps and devices they use for work is a top priority. That’s half the current workforce, and over 70% in ten years’ time. (Before you say anything, over half of Gen X workers agree.)
It makes sense that empowering knowledge workers with the best tools is a major focus for many organizations (along with security and compliance, naturally).
But what about SaaS spend?
According to Coupa (a spend management leader, Zylo partner and customer), IT is consistently among the top three highest spend categories in most organizations. It typically makes up 15-20% of the total budget. More than that, SaaS makes up nearly half of all cloud spend and the average company spends $5,800 per employee on SaaS. Not a super high price to pay for productivity, right? The problem is nearly 4 out of 10 SaaS licenses go unused for any 30 day period. For a company with 1,000 employees, that’s $2.32M in wasted SaaS spend each and every year.
So what’s the answer? You could cut SaaS spend in half by cutting out a hefty chunk of your applications, but you might eat the difference in productivity costs. You could let employees sign up for any app they need to stay productive—but then you’ll end up with a higher-than-average SaaS bill.
That’s why getting granular with how employees are using your company’s SaaS tools is so important.
Understand SaaS License Usage and Employee Effectiveness
The first step is to understand which SaaS licenses you have across the entire organization—and then determine which apps are actually being consistently used.
You can’t just pull everything into a Google Sheet, either—on average, a company adds eight new applications and retires four every month. You need a continuous, frictionless process for taking stock of your SaaS licenses—and optimizing accordingly, week after week and month after month.
You can’t even rely on your own IT records, since IT owns less and less SaaS spend. Typically, IT only owns 27% of SaaS spend and 23% of SaaS applications in an organization. (That number is trending down year over year, too.) In contrast, business units now own two-thirds of SaaS spend.
So what can you rely on for getting usage insights for your SaaS tools?
We’ll come right out and say we recommend a SaaS Management platform. With a SaaS Management tool, you can discover and monitor all of your spend and usage for your company’s SaaS applications. You can find every SaaS application, not just those purchased (or managed) by IT.
But that’s just the start. Zylo Insights also surfaces personalized, prioritized, and actionable usage and portfolio optimization recommendations to drive rightsizing and savings initiatives. In a single view, see all license optimization recommendations, prioritized by greatest return, so you can drill in to make appropriate corrections.
Get Proactive: Optimize SaaS Usage and Spend
Now that you understand what actions can have the biggest impact on your SaaS portfolio, it’s time to take action.
Zylo Usage Insights surfaces opportunities to optimize your SaaS spend on an ongoing basis (while still maintaining a high level of employee autonomy). Zylo gives you the option to request a license from employees when there’s inactivity. The employee then gets a push notification to return their license or keep using it. (Hey, maybe they’ve been out a few weeks that month.)
With both the big picture and priority actions like this, you can manage SaaS licenses with business outcomes in mind:
- Save time: No need to manually review usage each month—Zylo handles the license usage analysis for you, delivering customized recommendations based on application-specific and deep feature-usage data.
- Save money: Easily downgrade or deprovision underutilized user licenses—and enter vendor negotiations informed with real-time usage data when it’s time to renew.
- Improve employee experience: Make it easy for employees to give back licenses they no longer need or are no longer using. (And give them the ability to choose new apps with a catalog.)
How are you accounting for employee experience and SaaS spend at the same time?
See Usage Insights in action and request a demo today.