There’s arguably no better time to talk about SaaS management.
Why? Because many companies are seeking to manage costs and stay lean during an expected economic downturn and proactively managing SaaS applications can reduce waste, identify savings opportunities, and increase returns on software investments.
To gain a better understanding of how managing SaaS drives improved value at large organizations, at Zylo’s Conduct Virtual event, we talked to two enterprise software experts: Paul Jellema, director of SaaS management at Nike, and John Stame, senior enterprise architect at Atlassian.
Zylo co-founder and VP of Customer Success Cory Wheeler talks about enterprise-level SaaS management with John Stame and Paul Jellema
Responsible for optimizing all subscription-based software (SaaS) at two of the biggest brands in the corporate world, both Jellema and Stame have seen firsthand the impact and efficiency behind effective SaaS management.
During our 30-minute conversation, we covered a variety of topics including:
- Why now is the time for companies to examine their approach to governing, rationalizing, and managing SaaS
- The benefits of adopting a dedicated SaaS management platform
- How shifts in the economic outlook impact how organizations approach SaaS management
Below is a summary of our conversation with Jellema and Stame with critical takeaways for anyone interested in establishing a SaaS management methodology.
Too Many Tools, Not Enough Accountability
To say that the SaaS application landscape for businesses has become more chaotic in recent years is an understatement.
Recent SaaS statistics tell us that the average company uses about 600 apps at any given time. With new products flooding the market and companies consistently churning through them, companies without a reliable SaaS management methodology are getting overwhelmed.
“About five or six years ago, there was a realization that we have an exploding landscape,” Jellema says. “We saw the bubble chart of [SaaS] solutions explode from hundreds to thousands of applications. Three years ago, we started working on implementing governance and risk management to manage that enormous pool of software.”
For Stame at Atlassian, SaaS management began with securing the wealth of apps that were Atlassian-hosted in the cloud. They first examined CASB solutions before moving on to a dedicated SaaS management platform.
“We started looking at cloud access security brokers (CASB) about two years ago,” Stame notes. “Ninety-five percent of our portfolio runs in the cloud. We wanted to get a view of the services we’re using externally. I was looking for ways to discover what was out there.”
From security risks to overlapping solutions, technology leaders like Stame acknowledge that managing large, chaotic quantities of SaaS inventory mandates more comprehensive monitoring, governance, and risk management.
SaaS Can Be More Complex Than It Appears
Yet merely creating an inventory of the SaaS stack is just the beginning.
“With SaaS, there are additional complicating factors,” Jellema says. “You have data risk exposure. You have different legal templates. You have different contracts. You have more frequent renewals.”
SaaS applications are a regular feature in nearly every modern business. However, if large enterprises fail to prioritize the discovery, governance, and optimization of SaaS assets, the result is unintended headaches, wasted spend, and diminished value.
That proactive posture is what drove Stame to look into Zylo and SaaS management in the first place, managing nearly 200 apps for Atlassian’s more than 3,500 employees across the globe.
“We wanted to understand certain business capabilities that are out there and what services they were leveraging weren’t IT core,” says Stame. “We wanted to discover what, for instance, marketing analytics was using beyond just the analytics data platform for pipeline.”
SaaS Management Challenges Every Organization
Most companies can acknowledge that they’re dealing with redundant products and shadow IT. That initial discovery process can be a tough pill to swallow, though.
Because the concept of tracking contracts and solutions seems like a no-brainer, but doing so is easier said than done without an actual SaaS management platform. Case-in-point, both Stame and Jellema acknowledge that their organizations didn’t have full visibility into their complete SaaS inventory before implementing a discovery process through their SaaS management solution, Zylo.
“Two years ago, we did not have visibility to all services that were out there,” Stame says. “We knew that there were hundreds of other services that, across the business, were being acquired. At the time, we had a CFO that was interested in looking at what our spending was on cloud services and SaaS services.”
Similarly, Jellema notes that understanding the complete footprint of Nike’s SaaS portfolio was incomplete.
“There was no comprehensive list,” Jellema says. “Nobody knew how many applications there were, who the business owner was, or what the total spend was.”
Jellema likewise notes that SaaS management isn’t a “one-and-done” process, but using a SaaS management platform that consolidates management with automated discovery and insights has been invaluable in moving away from tracking their portfolio with manual spreadsheets.
“The number of SaaS apps that we now have visible in front of us through the Zylo app is bigger than we’ve had in any other repository before.”
Invest in SaaS Management Now, Prevent Headaches Later
Effective SaaS management encompasses more than the instant gratification of seeing the status of your portfolio. It’s a long-term, ongoing process that creates increased ROI in software investments and reduces license waste. It also frequently compels companies to reimagine their software acquisition and intake processes.
“Right now, there’s an enormous amount of work in risk remediation,” Jellema says. “The more established our intake process becomes, it will enormously reduce the need for risk remediation actions.”
Meanwhile, Stame stresses the optimization role that SaaS management tools like Zylo play in performing application rationalization and eliminating redundancies.
“Optimization is a muscle that we’ve been flexing,” Stame says. “We have annual application rationalization targets. We look at the enterprise and then we look at business capabilities. After that, we say ‘Hey, you know, there’s an opportunity to optimize.’”
Governance Must Allow Continued Innovation
Bear in mind that the high rate of churn among SaaS products doesn’t happen without good reason.
As new tools, more innovative platforms, or more cost-effective solutions hit the market, it’s understandable that employees and companies want to test and implement new tools.
Stame elaborates on Atlassian’s two-part approach to governing, which involves both an internal review and understanding core standards around software capabilities.
“We govern around standards,” Stame says. “But innovation is happening at lightspeed. Often, we’re replacing services that we’re using in the cloud annually, or sometimes even shorter than that, depending on the situation.”
The Secret to a Successful SaaS Management Program? Collaboration
SaaS management is anything but a solo act. It requires conversations between departments and employees. It’s likewise quite nuanced, thus requiring input and feedback from multiple people and teams to be effective.
“The secret of success isn’t me or my tiny team,” Jellema says.” It’s the fact that we’ve established cross-functional collaboration between all the teams that are engaged with the whole process. We’re talking about risk management, security, procurement, legal, and so on. It’s all driven by a collaborative effort between all of those teams.”
Is SaaS Management More Important in Times of Economic Uncertainty?
Conventional wisdom tells us that economic downturns would cause companies to slash budgets drastically when it comes to SaaS—in other words, getting rid of licenses to drive immediate bottom-line value.
But in the cases of both Stame and Jellema, nothing has changed. They’re reaping the benefits of optimization right now without having to do anything drastically different.
Jellema notes that Nike’s existing emphasis on optimization is keeping their company ahead of the curve when it comes to SaaS spending.
“We’ve already taken steps in optimizing licenses,” Jellema says. “That doesn’t just mean making the best use of available licenses and reallocating others, though. It also means optimizing the kind of licenses we buy. That’s an enormous step forward and cost-saving.”
Jellema explains that Nike is currently fine-tuning their optimization processes. He explains:
“Saving costs is the easy part. What our leadership also wants is to be able to make the best possible decisions at the right possible point in time. We went from about eight to ten large file-sharing platforms to a single one. So, all the information is now consolidated in one area so you can find it.”
No matter how you slice it, having a SaaS management methodology encourages consistent optimization and cost savings for organizations. This rings true whether your organization faces the challenge of economic uncertainty or not.
There’s Always Room to Improve
Our final question asked Stame and Jellema about roadblocks and lessons they’re still learning regarding onboarding and optimization.
Stame says that Atlassian maintains hundreds of services externally with nearly 200 services managed by IT. That’s a massive portfolio that requires almost constant review, resulting in the continuous acquisition and decommissioning of services. Optimization is a big undertaking, but it’s worth it.
Meanwhile, Jellema states that Nike deals with anywhere between 200 and 300 net-new SaaS contracts annually. He says that this includes a mix of renewals and new apps. He elaborates that the process from intake to the end can take up to four months, a timeline that could be improved.
The takeaway? Even massive global enterprises with proficient SaaS management professionals, state-of-the-art technology, and best practice processes can still find ways to improve how they drive increased value from their organization’s software investments.