Running your business without a SaaS discovery solution can feel like being out at sea without a map. It’s still possible to achieve your goals and get where you’re going, but it’s hard to not feel lost or confused along the way.
The SaaS market has grown exponentially and adoption has only increased since the start of the pandemic. As stated in the Bessemer Venture Partners 2021 State of the Cloud Report, the total cloud market cap more than doubled from February 2019-February 2021 – from $690 billion to $2.2 trillion.
In addition, Gartner predicts that global SaaS spend in 2023 will grow to $195 billion – up from $167 billion in 2022. On top of that, IDC reports that in 2022, for the first time ever, more money was spent on SaaS than on-premises software.
As your organization purchases and uses more SaaS, the need for visibility into all the applications you have grows as well. It used to be that IT managed the lion’s share of your technology estate. Whether new hardware or software tools, just about every technology passed through the IT team. But all of that is changing.
Today, we’re seeing a shift in the way software, and especially SaaS, is brought into the business. Our 2023 SaaS Management Index shows that IT now manages only 18% of an organization’s SaaS, while business units and employees own the remaining 82%. With more business units and even individual employees purchasing SaaS, it can be difficult for IT teams to maintain central visibility into what’s been purchased, how much was spent, and who is using those tools over time.
As a result, it’s not uncommon for tools to be underutilized or even outright abandoned – which equates to a waste of money that could be spent on other resources. To make the most of your SaaS tools and budget, you have to start with visibility. Many businesses have even added a new position, a SaaS Manager, to address this need.
For other companies, Chief Information Officers (CIOs) have stepped up to take on the strategic challenges of SaaS. When the pandemic hit, it was CIOs, IT leaders, and their teams that were on the front lines helping organizations adapt to remote work seemingly overnight.
For many CIOs, that shift involved implementing SaaS tools. When used well, SaaS applications have the power to transform businesses. SaaS enables innovation, fosters collaboration, drives efficiency, gets results, and plays a critical role in delivering a positive employee experience.
But to unlock the full power of SaaS, CIOs and other IT leaders need to get their arms around all of the software the company is using. They need to understand what has been purchased, who is using it, and how effective that tool is.
Discovering all the SaaS applications your organization uses is the first step to gaining visibility. And while there are ways you can try to catalog and track your applications manually, it can be an excruciating process.
Imagine trying to track down and collect contract, spend, and user information out of more than 300 applications. Sound fun? Yeah, we don’t think so either. This is why SaaS discovery options like Zylo allow your business greater visibility into all of your SaaS applications in an automated fashion.
The average organization has 291 SaaS applications in its portfolio. And the crazy part is, most organizations have no idea. IT leaders often underestimate SaaS application quantity by 2-3x. The same is true for spend. With the average organization spending a whopping $50M on SaaS each year, it can be incredibly expensive to not have visibility into your SaaS applications.
Managing the many elements of a business is hard. But it becomes almost impossible if you don’t know what you’re working with. And as we like to say, you can’t manage or optimize what you can’t see – which is why we believe all good SaaS management and optimization starts with discovery.
What is SaaS Discovery?
SaaS Discovery is the first and most crucial step in the SaaS Management lifecycle. We built this lifecycle to visualize the process of managing your SaaS investments. The steps include the discovery, optimization, planning, and governance of your SaaS tools.
While discovery is the first step, it’s also important to note that it should be an ongoing process as new SaaS tools enter your organization. According to our research, the average organization sees 6 new SaaS applications enter their environment every 30 days. If you don’t have a clear, real-time understanding of the tools your business uses, it’s impossible to properly utilize them.
Discovery is like an audit of your SaaS tools and their usage. Unlike traditional on-premise versions, SaaS software audits are painless. That’s because, with SaaS, it’s not about avoiding a software provider’s audit. Rather it’s all about discovering what SaaS tools you have within your estate.
In addition to seeing what SaaS tools you have, discovery is essential to gaining visibility into your SaaS spend and utilization. By gaining insight into your application usage, you establish a foundation to organize, optimize, and orchestrate your SaaS – and ultimately power better business results.
From Spreadsheets to a SaaS Management Tool
As businesses rely more on SaaS, discovery has become impossible to do without a dedicated SaaS management tool. These platforms have the capability of dynamic discovery–or finding your licenses automatically and continuously. This makes them vastly more effective at tracking than manual methods.
Manual tracking is constantly outdated, may miss platforms, and is prone to human error. No spreadsheet can gain the level of insight that a platform like Zylo can offer.
SaaS management platforms like Zylo offer ongoing discovery across multiple inputs. Whether through integrations, financial data, or a single sign-on solution, Zylo will find your SaaS, wherever it lurks.
Why Visibility is Important to Your Saas Management Strategy
SaaS is incredibly easy to purchase. In some cases, all you need is an email and a credit card. And while there are many pros to this ease of purchasing, complications can rapidly compound.
Shadow IT has been a buzzword in the industry for decades, but we’ve seen a rapid increase in concerns around Shadow IT in recent years. The main things that are accelerating this concern are:
- The Rise of SaaS – As SaaS grows in your organization, chances are that Shadow IT will as well. Now that a credit card and an email are all that most platforms require to get started, just about anyone can purchase a SaaS application.
- Decentralized Purchasing – IT teams aren’t the sole purchasers of SaaS anymore. One in six employees expenses SaaS in their organization and employee purchases account for 7% of SaaS spend at the average organization.
- Hybrid and Remote Work – SaaS offerings and adoption have dramatically increased since the pandemic. This is largely because organizations turned to SaaS and cloud-based tools to navigate the challenges of remote and hybrid work. These changes have left companies with more needs that SaaS programs are happy to meet.
- SaaS is a Dynamic Environment – The average organization sees eight apps entering its environment every 30 days. If you’re not constantly monitoring your SaaS estate, new tools can easily enter the organization unbeknownst to IT.
You can’t manage, optimize, or govern what you don’t know exists. Without clear visibility into all your SaaS, you’ll always be behind the eight-ball. SaaS discovery is the bedrock of SaaS management and optimization.
Find All Your SaaS Wherever It Lurks
One of the biggest things SaaS Managers are responsible for is sniffing out all the applications at the organization – including shadow IT discovery. However, the pandemic has made this more challenging. Not only are organizations using more SaaS, but they’ve changed the way they purchase it. The purchasing process has become much more decentralized.
Our SaaS Management Index report saw a dramatic shift in IT ownership:
- The amount of SaaS spend IT manages is a mere 31%
- Employees now own a staggering 37% of SaaS spend despite owning just 6% of total applications
More employees are buying apps than they ever have been before. When you think about the decentralization of purchasing, it’s causing a great amount of SaaS sprawl.
SaaS sprawl is a term that’s gathering momentum in the industry. What does it mean and what are the implications? As the name suggests, it is a proliferation or sprawl of SaaS applications in your organization.
The ease of purchase for SaaS is a great advantage, but it can make tracking the SaaS used in your organization and maintaining visibility that much harder.
Eliminate Shadow IT
Companies must decide what their is stance on shadow IT. For some organizations, shadow IT must be eliminated and stopped at all costs. And for others, it is seen as a source of innovation and a way to empower employees with their choice of SaaS tools.
Your business goals will determine what style of governance makes the most sense in your organization – whether centralized, decentralized, or somewhere in between. However, maintaining governance is not possible without first understanding what applications you’re using and continuously monitoring for new entrants to your SaaS estate.
Once you have visibility into who is purchasing SaaS at your company, you have a foundation to make governance decisions. Whether that’s giving employees tool autonomy or establishing systems to eliminate shadow IT.
Quickly Understand Your SaaS Usage and Spend
As we’ve alluded to already, there’s a high proliferation of SaaS among organizations. And there’s a great amount of spend that comes with it.
And unfortunately all of those dollars aren’t being put to good use. In fact, the average organization is only utilizing 60% of its provisioned SaaS licenses. That means 40% goes wasted, unused, and is ripe for optimization.
In addition, Zylo customer data shows that companies are overpaying for SaaS licenses by about 15%.
SaaS spending is not an insignificant part of your business. The average annual SaaS spend for companies are:
- $7.9M – Small (1 – 500 employees)
- $29.8M – Small to midsize (501 – 2,500 employees)
- $88.6M – Large (2,501 – 5,000 employees)
- $76.8M – Enterprise (5,001 – 10,000 employees)
- $224.8M – Large enterprise (10,001+ employees)
Visibility into your SaaS spend and usage powers the insights for three key optimization opportunities: to rightsize your licenses, secure the best price and renew with confidence.
Understanding your app usage can help you reign in sprawl. You can see where you have redundant applications and which licenses are not being utilized or underutilized. For example, does your organization need 50 project management tools – or would it make sense to standardize on 15 of them?
This visibility can also show you if you’re overpaying for licenses as compared to your peers. And most importantly, it arms you with the data and insights needed to master renewal negotiations with confidence.
SaaS discovery helps you make the most of your SaaS investments. Usage and spend data helps you understand who is using your SaaS licenses — and how.
Mitigate Security and Compliance Risks
Increased employee purchases and sprawl can also have ramifications on security and compliance.
We know that business units or employees are purchasing more SaaS than ever. If they’re making those purchases without IT knowing, it can be impossible for IT teams to ensure those tools are vetted for security. There’s no way to know what data goes into each of these apps or how secure they are, either.
SaaS discovery tools like Zylo make it easier for IT to maintain central visibility so that they can ensure the SaaS apps being purchased won’t put the organization at risk.
Get Even More Visibility With the Zylo API
As part of Zylo’s SaaS discovery process, we have deep, direct integrations with tools like Zoom, Zendesk, Outreach, Asana, Box, Slack and Salesforce that enable us to understand key application usage information.
But for applications that don’t have a direct integration – we have the Zylo API. With the Zylo API, organizations can bring information from just about any application into the Zylo platform, enabling them to get a baseline of user data and support their SaaS Management strategy.
Benefits of SaaS Discovery
There are many benefits to SaaS discovery for the whole organization. Let’s go over some of the benefits that SaaS discovery platforms like Zylo offer for each department:
SaaS Discovery for Software Asset Managers
Software Asset Managers are responsible for the software the company uses. Part of their job is ensuring that the company is appropriately utilizing its software assets – whether on-premise or SaaS. For on-premise software, Software Asset Managers are concerned with ensuring their licenses remain in compliance with their vendor contracts.
Yet for SaaS, the opportunity is much different.
For SaaS, Software Asset Managers can provide great value back to their organizations by understanding what tools are in use across the organization and how well those tools are being utilized. This is impossible without SaaS discovery solutions like Zylo.
Software Asset Managers use Zylo to manage, optimize, and reduce risks. The insights provided allow companies to:
- Prioritize – Discover instantly which SaaS applications need the most attention and present the greatest optimization opportunity.
- Automate – Use workflows to reharvest unused licenses and automatically de-provisioning or downgrade licenses that are either unused or underused.
- Renew – Armed with the right data, confidently negotiate renewals or cancel as needed.
We also provide tools to see how your portfolio and contracts stack up against organizations like yours. This comparison enables you to ensure you have the best SaaS applications at the best price.
SaaS Discovery for IT
IT professionals prioritize optimization above all else. While they’re only responsible for a percentage of SaaS purchased in the organization, they’re often 100% responsible for managing the cost and risk of the organization’s software. This means having visibility into the software purchased by not only the company, but also business units and individuals. This cannot happen without ongoing discovery.
Discovery platforms like Zylo allow IT professionals to:
- Identify software expensed by multiple users or cost centers instantly and continuously
- Increase the security of your organization by knowing which applications are storing what data
And for the security-minded IT organizations, Zylo’s Discovery Engine can help in building a single-sign-on (SSO) roadmap to improve the organization’s security posture. Because you can discover all applications in use across the organization, it’s easy to identify which applications have not been put behind SSO.
SaaS Discovery for Procurement
Procurement teams are responsible for sourcing, purchasing, managing, and renewing software applications. They need to make informed decisions on what is best for the company to keep and what they should get rid of. The data and insights garnered from discovery are the only way this is possible.
Without a SaaS Management solution, businesses will find it very difficult to track the SaaS being purchased and used across the organization.
Zylo provides this information on-demand, in real-time, and continues tracking it behind the scenes. This information aligns procurement priorities with user demand and behavior. Additionally, complete visibility into your SaaS estate means having visibility into your renewals. With the help of a SaaS Management tool, procurement teams will never get caught by an auto-renewal again. And not only do they get ample warning and time to prep, users can also get access to up-to-date usage, portfolio, and benchmark data, empowering them to purchase, cancel, and renew SaaS at scale.
SaaS Discovery for CIOs
The role of Chief Information Officer has undergone a dramatic shift since the pandemic began. The old-school approach of legacy CIOs has fallen by the wayside. And we’re seeing a new generation of CIOs emerge who are eager to use technology to drive digital transformation, innovation and solve business problems with the help of technology.
For many CIOs today, this includes equipping organizations for remote and hybrid work, ensuring the organization continues to collaborate and communicate effectively, increasing the efficiency of the business, and ultimately helping to drive results.
By having central visibility into the organization’s SaaS portfolio, CIOs are in a position to help foster collaboration across groups and make it easy for employees to know what tools are available for them to use.
CIOs use Zylo to build a system of record for the organization, boost their efficiency, and see how they stack up against their peers.
Types of SaaS Discovery
You can’t manage what you can’t see, and SaaS can be very difficult to visualize. This is what makes SaaS discovery so important. There are five key methods of discovery:
- AI-powered matching model: relies on pattern behavior, using machine learning to identify both known and unknown SaaS applications.
- Rule-based matching: depends on logic and known information, such as expense or spend type, supplier/vendor names, and predefined rules to classify whether an expense is related to SaaS.
- Cloud Access Security Brokers (CASB): utilizes and monitors company networks to track app usage and security details.
- Browser extensions: similar to CASB, these rely on employees using company devices and/or networks and monitor data usage through their browsers.
- Single sign-on (SSO): unifies employee access to a single sign-on credential. This credential is linked to an application that can gather and visualize data.
Read more on these methods and why AI models are ideal for discovery here.
How a Discovery Process Drives Saas Visibility
Now that any employee with a credit card can sign up a business for an exhaustive list of SaaS tools, visibility is harder than ever to obtain – and to maintain. Managing the programs you are using has to begin with a discovery process.
The discovery process involves four steps:
Let’s walk through each of these in more detail.
Step One: Discover All Your SaaS
This step involves finding all of your SaaS. This includes what you have, who is purchasing it, and how you intend to use it.
At Zylo we use our AI-powered Discovery Engine to find 100% of your applications, even if they’re miscoded or improperly categorized. That’s something that businesses have never been able to accomplish in the past.
Our Discovery Engine ingests enterprise financial transactions through direct integrations to financial reporting systems to view direct purchases and employee expense transactions.
Then, Zylo’s usage integrations help you track, understand, secure, and govern all your SaaS licenses.Okta, Coupa, Salesforce, Microsoft Office, Workday, and many more are available to easily integrate into your Zylo account.
On the off chance that we don’t have an integration already built, our API is open for use as another source to bring in data.
Step Two: Catalog the Data
Now that you’ve gathered all of your data in your SaaS Management system, the next important step is to catalog it. Zylo provides data on all applications assigned to users and makes sure there are no gaps.
Through visual reports of subscriptions, users, and payments, businesses can easily and effectively create a SaaS system of record. This is a source of truth for your team that would otherwise be elusive or impossible to find. When it comes to SaaS applications, this creates a central authoritative source of data for businesses.
Or, take it a step further and enable a catalog of apps your employees can choose from. A system of record is a short pivot away from a collection of vetted apps for your employees, like Zylo’s App Catalog. Doing this allows them to have the autonomy to choose their own tools within the framework you set up.
Step Three: Track Constantly
Tracking and monitoring your SaaS portfolio and associated spend, adoption, and usage is an ongoing process. At Zylo, we make this possible with an extensive amount of integrations – as we mentioned previously.
We believe SaaS Management should be done your way. And having a platform that scales with your business is crucial to your success. As your business and SaaS portfolio grow, you’ll be able to maintain that much-needed visibility.
This added visibility enables businesses to make sure the right people have access to licenses. From there, forecast future licensing needs with accurate data, and provide centralized reporting on user activity.
Interactive management views enable you to quickly discover any software or licenses that are not justified in the amount they cost.
The ongoing monitoring of SaaS apps is the only way to ensure that you stay above any potential issues. Businesses often do this on a quarterly or annual basis but that cannot provide the full picture. Platforms like Zylo make it so that this audit can happen in minutes on a weekly or daily basis.
Step Four: Benchmark Success
How can you know how well you’re using a platform if you don’t know what success looks like on average? SaaS benchmarking gives you a line of sight on how your portfolio, applications, and spend compare to other organizations. This empowers you to ensure that you are getting the most out of every dollar spent.
For example, we find that the average company overspends 15% on software licenses. Zylo’s Benchmarks tool provides the right data to make sure you’re not one of them.
Benchmarking data is a powerful tool to drive your SaaS strategy. As a CIO, I’m always trying to balance how I equip my teams with the best tools while ensuring we’re making smart investments. Zylo Benchmarks is a powerful tool that will help technology leaders achieve that elusive balance.
– Cynthia Stoddard, Senior Vice President, and Chief Information Officer, Adobe
Zylo makes taking action to fix these concerns easier than ever. We use contract details and usage data to deliver personalized, prioritized, and actionable recommendations. These concrete steps to optimize your SaaS portfolio are available with ease through Zylo Insights.
Using SaaS Discovery to Optimize Your Portfolio
We’re in the business of giving you the data that really matters. SaaS reporting enables businesses to grow and challenge their normal processes in favor of more useful ones. In addition to better understanding your spend and utilization, you’re able to identify opportunities to optimize your portfolio, applications, and spend.
Here’s the data that you’ll need to be successful:
Number of Applications Being Used
How many different SaaS applications are in use in your company?
With the number of avenues for new applications to enter the company library undetected, monitoring this is no easy feat. Today, the average organization adds 8 different tools each month while only removing 4.
With that many new SaaS platforms added every month, how can anyone keep track? Visibility into the number of apps in your portfolio can show where there may be redundancies or overlap in your company.
Renewals on the Horizon
How many renewals do you have coming up this month? What about this quarter? Year? As a general rule, successful renewals take about 30 to 90 days of preparation, so it’s essential to stay ahead of renewals on the horizon.
To stay ahead, we recommend using a renewal calendar. And using a platform that sends automated reminders can especially be a game-changer. Renewals for SaaS can come on a monthly, quarterly, or even a semi- or annual basis. Keeping a hold over what to expect in that situation is difficult.
A business that winds up renewing for something they wanted to get rid of is on the hook for an entirely new cycle of payments. With a platform like Zylo, you can be assured that renewals won’t catch you by surprise.
The first step is getting a handle on how much you’re spending and when you’ll be spending more and where you can potentially be spending less.
The ideal discovery process requires a complete and thorough analysis of all financial transactions, typically using spend management software or an intuitive SaaS management platform. And a tool like Zylo allows businesses to quickly see what applications have been bought, what’s spent, and who is purchasing them.
While it was easy to find this data with on-premise software, SaaS has made this tremendously difficult. We find that organizations often have duplicate subscriptions or applications with duplication functionality that can be consolidated for greater negotiating power and savings. In addition, software license tracking is powerful for finding opportunities to rightsize licenses and cut back on spend.
Once you’ve managed your spending, it’s time to understand how much your tools are actually being used. SaaS usage tracking tools make this easy. Did you know that 75% of licenses provisioned through Okta are nearly or entirely inactive?
In fact, the average organization is only utilizing 556% of its provisioned SaaS licenses. That leaves 44% wasted, unused, and ripe for optimization. This is a long way from where companies should aim to be at 90% utilization – or higher.
Don’t get stuck paying for platforms that aren’t being used or may have more bells and whistles than is needed for your users and business.
Benchmarking Your SaaS
In business, ignorance is never bliss. Through the benchmarks set by people seeking the same thing as you, you can make a true comparison.
Without a clear understanding of the expectations of the industry, how can you ever know if you’re meeting, exceeding, or missing them? See how well your business is really performing in these three categories with Zylo Benchmarks:
Portfolio Benchmarks can help you uncover gaps. Zylo benchmarking enables businesses to compare their application mix, spend, and sprawl with similar businesses. Filter by a category, subcategory, and even drill down into functionality per application.
For example, is your marketing team’s tech stack in line with the rest of your peers? Is it bloated or does it pale in comparison? These are questions a business should be able to answer. Under-investing in marketing technology, or any other category, can put your company at competitive risk.
Popular Applications Benchmarks
Discover what applications are popular in organizations like yours and steer clear from those that aren’t. Zylo benchmarking allows you to sort top application recommendations by category, subcategory, or functionality.
From here, see the top applications for any given need, as well as where the applications you have stack up.
It’s not uncommon for a business to discover, for example, that they have fourteen different applications for project management. Popular Applications can help shine a light on which tools are the best to standardize. And it’s all based on the functionality your users value most.
Stop overspending on your applications! Price benchmarks help you get the most for your money, renew licenses with confidence, and more. Zylo enables businesses to research scenarios by inputting current prices or comparing them to quoted or forecasted prices.
Want more info? Drill down into prices by application and license types to see exactly where you stand. From here, support budget planning by running quantity and cost scenarios.
Say you want to discover if you’re spending more on Salesforce compared to your peers. The knowledge that you’re paying more than companies your size grants a great amount of negotiation power at renewal time to try to reduce your spend.
Gain Actionable Insights
All of this SaaS discovery lays the foundation to power Insights. Zylo’s robust insights surface the most relevant actions you should take. This may include usage items like recommendations to re-provision or downgrade licenses. Additionally, we provide portfolio information like new subscriptions, duplicates, and recently expired contracts. We’re intent on making sure that you have the knowledge needed to take your next steps with the utmost confidence!
SaaS Discovery in Action
By now, we hope it’s clear that gaining visibility is the foundation of SaaS Management. How are businesses putting it into action? We’re proud of our track record of success in helping businesses with their SaaS discovery. Here are a few examples of how this has proven to be useful for our customers:
City of Aurora, Colorado
Any government entity has an obligation to its taxpayers to spend their funds as efficiently as possible. Aurora, Colorado’s government even goes so far as to post all city expenditures on its website. Thus allowing their citizens to see exactly where the city is spending their money.
As the city began growing, so, too, did its challenge to provide this visibility. As the task of managing finances, purchasing, and services grew harder, Aurora turned to Zylo for help.
Zylo’s discovery process located approximately 200 cloud-based applications across 20 separate departments. There’s no way that a single person could have managed all that.
Today, the team at the City of Aurora has processes in place to determine the need for various platforms. As new ones come in, they can see and track them instantly and make sure it’s the right fit.
Aurora’s Chief Information Officer, Aleta Jeffress, had this to say about it:
“We’re now seeing all [SaaS] purchases and being able to talk to the employees about them. Step one is always awareness, and then you have to educate your users about the process. Now, if we find disparate things or if somebody comes to the table and says I want to buy a hundred software licenses for my team, we have a process to evaluate that.”
Success is a double-edged sword as Adrian Dunne from NextRoll understands all too well. As the Senior Director of Global IT, his task was to manage the SaaS footprint of an organization with over 10 years of acquisitions and growth.
Multiple teams and locations hindered his ability to get a handle on all the usage in the company. Enter: SaaS Discovery from Zylo!
Through Zylo, NextRoll’s inventory was fully visible to the team. Doing so enabled line-of-business stakeholders to make security and IT governance improvements throughout the organization.
A 48% decrease in the number of employees expensing applications in just 12 months. Thanks to this, there was also a 22% decrease in the number of unique applications. Duplicate applications dropped by more than 53%.
“It can be challenging to manage all the data Zylo presents and know where to begin,” Dunne says. “But once we had the tool in place, we were able to begin the exercise of cleaning everything up.”
NextRoll’s curated data allowed them to streamline purchase behaviors across the organization.
The ease with which owners can now add SaaS applications to your organization’s estate carries both consequences AND advantages.
Without a clear understanding of what you’re using, it’s not possible to organize, manage or optimize it. Through SaaS discovery, businesses can gain visibility into areas where they are overpaying, underusing, or are just plain unaware.
Armed with this knowledge, it’s possible to drive your SaaS strategy and shape your SaaS portfolio into something that works efficiently and effectively. IT, SAM, and Procurement teams can use this information to consolidate, eliminate, or otherwise optimize their applications.
Interested in gaining 100% visibility into your SaaS estate? Learn about the unique process we use at Zylo, through our AI and machine learning-powered Discovery Engine. Or, you can always request a demo to see it in action for yourself!