Prioritizing SaaS Management in 2025? Focus on These 3 Things

You’ve decided that SaaS Management is a top priority for your organization in 2025. That’s great! But you may be thinking, “Where do I even start? What should I focus on?”

You’re not alone in having this question. If you focus on anything this year, make it these three things: 

• Adopt a SaaS Management program
• Prioritize strategic applications to drive business outcomes
• Stay ahead of AI

Let’s examine how these three proactive measures can help you control rising SaaS costs and risks in 2025 and beyond.

Adopt a SaaS Management Program

First things first: to get ahead of rising costs and risks, you must adopt a SaaS Management program. Don’t wait for a crisis; it’s critical to put controls in place now before it’s too late. 

Proactive, progressive companies are putting value- and cost-based programs around cloud and software costs to achieve this goal. Show the tangible value of optimization early—such as cost savings—and then integrate it into your practice.

This is a valuable opportunity for SaaS Management and FinOps teams to begin aligning their efforts. With convergence expected to accelerate, aligning on roles, responsibilities, and shared value from the start will be important for a cohesive approach.

Without a well-defined SaaS Management strategy, organizations will encounter increasingly critical problems: 

Software Spending Will Continue to Surge

Software spending continues to rise—with the average organization now spending $49M annually on SaaS. Even Gartner predicts that SaaS spending will reach $299B in 2025, a 19% increase year over year.

SaaS Sprawl Will Become Unmanageable

Today, the average company has 275 applications, with seven new apps entering the environment each month. Over the course of a year, if left unmanaged, your portfolio would grow by 33%! The costs and risks associated with this growth will only compound, making SaaS sprawl feel impossible to manage.

Employee Experience Will Suffer

As if the sprawl wasn’t enough, it also introduces redundancy to your stack. And when you have users split between 10 project management tools (the average number of apps with this functionality), it’s easy to see how productivity and collaboration can suffer.

Start Small and Focus on What Matters Most

Managing your SaaS applications doesn’t have to be overwhelming. But it will be if you try to address them all at once. 

Attempting to “boil the ocean” by tackling all your SaaS apps at once can lead to lower overall program value. That’s because you’re trying to hit multiple moving targets at the same time. When everything is a priority, nothing is.

Prioritize Your Applications

Instead, start by prioritizing your applications by their strategic importance to your organization. The most critical apps are categorized as Tier One, which are typically a smaller set of applications. The criteria that defines a Tier One application is based on what’s important to your organization and the outcomes you’re trying to drive.

Often, Tier One apps are:

• Centrally managed by IT or SAM
• Strategic solutions most critical to your core business functions
• High spend applications

A few examples of Tier One apps include:

• Google Workspace
• Microsoft 365
• Zoom
• Slack
• Salesforce

Once you’ve identified your top priority applications, you have a more manageable quantity to work with. By starting with Tier One applications, you can get early wins and create a foundation for scaling your program.

Use a SaaS Management Platform

Tracking progress toward your strategic business outcomes requires best-in-class tooling. A SaaS Management Platform (SMP) is a must.

Get Visibility into Your SaaS Applications

The average organization spends $49M on SaaS annually and has 275 apps in its portfolio. Surprisingly, when we talk to companies that don’t yet have a SaaS Management program, they underestimate these figures by a factor of 3X and 1.7X, respectively. 

That only compounds when you consider that the average annual portfolio growth is 33%. Because apps are constantly entering your environment, it’s essential to have a SaaS Management Platform with centralized, comprehensive, and continuous visibility. Otherwise, you can imagine the magnitude of the SaaS sprawl.

Getting visibility into all your SaaS apps means understanding what you have, who is purchasing it, and how it is being used. And that requires an SMP with robust discovery. 

At Zylo, discovery is powered by our AI Discovery Engine—backed by the Zybrary, Zylo’s database of more than 24,000 applications (and growing). Using single sign on, financial and usage integrations, all the data you need is ingested to find your SaaS and centralize critical information about each app.

“Zylo provided the AI we used to identify current titles and categorize them according to functional area, saved approximately 500 hours at the onset of the project and became the backbone of how we divided our software portfolio.”

— Vinod Vishwan, Sr. Director, Head of Business Planning & Operations at Adobe

Easily Identify Next Steps

Once you have full visibility, you can identify the next steps you should take within those Tier One apps. For example, that may be:

• Benchmarking the price of your license SKUs to negotiate at renewal, resulting in realized cost savings.
• Running automated license workflows to avoid the cost of buying more licenses unnecessarily.
• Implement a new software procurement policy to cut back on expense purchases, reducing costs and preventing risky apps from entering your environment.

A SaaS Management Platform like Zylo makes it easy to track and measure progress toward these opportunities using automation. 

• Automatically surface opportunities to take action, such as reclaiming unused licenses, removing expense purchases, and contract renewals.
• Ensure the right stakeholders are notified when to take a specific action.
• Provide executives visibility into progress toward your strategic business outcomes.

Stay Ahead of Artificial Intelligence

Artificial intelligence is making inroads across all parts of the business—from product and engineering to sales and marketing. We’re seeing leading indicators that the AI bubble is only going to grow over the next several years.

For instance, our data shows that spending on AI-native applications—apps with AI as the core functionality—jumped a staggering 75% in 2024. While that only accounts for about $400k in spending, it signals an immense potential for future growth. It’s a trend we believe is here to stay. 

In addition, AI is becoming highly sought by employees, with ChatGPT becoming the #2 most expensed app last year. That’s after being in the #14 spot in 2023. 

For all of its productivity gains, there are risks to be aware of with AI. Let’s explore how you can stay ahead of the curve.

Know What AI Tools Are Being Used

If you’re unsure how AI is being used in your company, you’re already behind. Discovery is the starting point for managing opportunities for innovation and productivity gains while balancing potential security and financial risks.

In our survey of enterprise IT leaders, 89.4% expressed concerns about the security risks associated with AI tools. That’s because AI tools can handle sensitive company and customer data. If you don’t know what is being used, you also don’t know what data is going into those tools either.

IT and SAM leaders need to understand that AI will fundamentally change how SaaS is managed over time. While some traditional SaaS companies have already added AI products into their mix, more will continue to follow suit. Pricing models will change drastically, with many vendors shifting from per-seat pricing to consumption-based models for AI features.

Track AI Consumption

Sixty-six percent of IT leaders have experienced unexpected charges on SaaS due to consumption-based or AI pricing models. To ensure you stay within forecasts and budget, it’s critical to track how AI is consumed. 

But this is a new world for all of us. Different pricing models and new complexities will make it challenging to monitor and manage AI, requiring new tools and strategies to predict costs. 

SaaS companies are keeping us on our toes, too. According to the 2024 SaaS Benchmarks Report by High Alpha, SaaS companies continue to experiment with AI pricing strategies. The number of companies monetizing AI features is up 9% over 2023, with one quarter (25%) employing usage-based pricing for AI features.

Organizations should evaluate the value they receive relative to what their vendor provides. Without understanding how AI is being used and tracking the business value it is driving, forecasting overage charges will be difficult, putting your software budget at risk.

Implement Governance Policies for AI

Effective governance is also essential to ensure AI is used responsibly and delivers value. Of the IT leaders we surveyed, 81.8% reported having documented policies specifically governing the use of AI tools. These policies may address guidelines on data security, permitted use cases, and other risk mitigation strategies.

But having an AI policy is just the start. To be truly effective, AI governance must be embedded in the organizational culture. This means educating employees on the risks and responsible use of AI, vetting all AI applications before purchase, and diligently evaluating AI features with vendors.

“We’ve been trying to strike a balance with AI around the security and privacy aspect. Before employees work with any data that’s remotely confidential, we want to make sure the tool has been vetted first.”

— Steve Willer, CTO at Klick Health

Unlock Business Value with SaaS Management in 2025

SaaS Management is a business practice that’s critical to driving business outcomes from cost savings and avoidance to inventory visibility and a record of compliance. For more information on how you can address SaaS risks in 2025 and beyond, check out the 2025 SaaS Management Index.