With more and more “to-your-door,” “have-it-now” services available than ever before, we’ve created a culture where anything is accessible at any time. Of course, this mentality has naturally seeped into our professional lives, allowing employees to download and purchase the systems they need as they need them—often without the knowledge or approval of IT.
The resulting lack of transparency between individual business units and IT can create huge security risks, improper licensing, wasted funds, and ineffective business strategies. Companies are underestimating the number of applications they use by two- and three-fold, while more than 50% of SaaS spend is being found outside of known software expense types.
CIOs are charged with uncovering this shadow IT, building relationships with buyers in each business unit, and driving the SaaS strategies behind each application. But exposing all the applications throughout a large enterprise is like finding a needle in a haystack, while consuming all your team’s time and resources.
What can the modern CIO do to stay ahead of the growing challenge of managing SaaS?
Best Practices for Managing Your SaaS Enterprise-Wide
Enterprises across multiple industries are facing many of the same challenges when it comes to managing SaaS: lack of visibility, increased security risk, application redundancy, reactive vs. proactive app renewals, etc. CIOs repair these issues by implementing foundational tactics that open up communication between IT and lines of business (LOBs) and set the organization up for future success as they become more and more cloud-minded.
(1) Discover All Applications
The first step to driving increased value in your software investments is taking inventory of all the applications in your technology stack. If you’re attempting to do this manually, start by identifying the typical areas of your largest spend. (Infrastructure as a service, business intelligence, and accounting and finance often top the list with the biggest areas of spend by application function.) From there, get ahead by asking yourself:
- Do we have a process to continually uncover new SaaS apps purchased?
- Do we have a process for mitigating risk and containing costs?
- Who owns each major application investment?
In conducting a discovery, you’re not only identifying each of the applications currently in use in your organization, but also areas of application function overlap. Because of disparate strategies and lack of collaboration, multiple departments will purchase different solutions to solve the same problem. While overlapping functions aren’t always a negative, working with the business will allow IT to determine what each application is used for within a department and help advise if there are similar solutions that could be rolled into one enterprise-wide agreement.
(2) Empower LOBs to Professionally Manage SaaS Applications
While SaaS purchasing by LOBs creates greater efficiencies and productivity for individual business units, it also puts IT in a tough spot, leaving them to ensure security for the new apps and forecast future technology budgets without proper knowledge of all the software in use across the organization. Simply taking inventory of your company’s app use and throwing policies at your stakeholders will only widen the gap.
You need a true partnership with stakeholders throughout the company that supports LOB education and empowerment. To maintain agility within the enterprise, don’t just seek to manage all purchased applications. Instead, create tiers of governance and control based on each application’s cost and impact across the business. Empower LOBs to responsibly manage small and safe technology investments in order to maintain speed and agility. Then, prioritize the central management of large, sensitive, and strategic applications.
(3) Drive Enterprise-Wide Strategies
When IT and LOBs are aligned, it makes way for greater strategic alignment: work together to keep costs and governance in check without stifling the freedom and efficiency of individual business units. Your SaaS management strategy should balance the priorities and values of the enterprise as a whole, as well as each LOB, taking into account:
- Spend management
- Utilization/license management
- Redundancy management
- Transactional volume
Remember—the goal is ROI. Regardless of who’s using what where, the priority of all departments must be to ensure each cloud investment drives ROI, whether in cost reduction, increased productivity, usability, or security.
(4) Prioritize the Professional Management of SaaS
Enterprises are moving toward a cloud-first mentality. Gartner asserts that more than 50% of all enterprise-level software adoptions are SaaS applications or other cloud-based solutions. Some mid-market and small enterprises are even further ahead, adopting cloud-first or cloud-only software.
The reality is that annual or semi-annual audits of your SaaS footprint aren’t enough, especially in an age where innovation is lightning fast and security is at risk. Now is the time to get a better handle on your existing tech stack: forecast new investments, prepare for growth, mitigate risk, and control costs.
In a time when many organizations are still determining where SaaS fits into their overall IT approach, it’s crucial for enterprises to begin driving their SaaS strategy into the future.