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Whenever I speak with customers, their first thought is usually about the ROI and business value of SaaS Management. It comes up so frequently we made it the topic for our third episode of Zylo’s SaaSMe Anything podcast. Listen to the full episode or catch the highlights below.
In order to truly drive meaningful value for your business, SaaS Management must be an ongoing business practice, not a one-and-done project. What I love about SaaS Management is there are multiple ways to extract value, depending on your strategic business goals.
Whether you want to understand your full SaaS investment, reduce operating expenses (OpEx), or minimize risk, SaaS management has a direct impact.
3 Ways SaaS Management Drives Business Value
The podcast focused on how a SaaS Management strategy and platform can help businesses identify all software applications, reduce costs and mitigate risks. It’s important to note that you can’t drive savings and reduce risk without first understanding the full picture.
#1: Eliminate Blind Spots
Simply put, you can’t manage what you can’t see. You can’t save money or mitigate risk when a significant number of applications lurk outside the purview of IT.
Before SaaS, IT managed the lion’s share of your software inventory. Yet, Zylo’s 2024 SaaS Management Index shows IT now manages only 17% of an organization’s SaaS, while business units and employees own the remaining 83%.
Without visibility, we find 9 times out of 10 that organizations underestimate their SaaS application quantity and spend by 2-3x — sometimes even more. It’s a big deal because visibility is key to really understanding what applications you have, to knowing how much you’re spending, and to realizing where your organization may be exposed to compliance or security risks. Most importantly, visibility shows you where you can optimize opportunities and really achieve your business outcomes.
With a tool like Zylo’s industry-leading Discovery Engine, businesses gain 100% visibility into their apps. The tool uses AI to power comprehensive discovery, continual monitoring, and full optimization of SaaS applications to support holistic SaaS Management.
#2: Reduce Costs
Our SaaS Management Index finds that the average organization wastes about $18 million a year on SaaS, typically due to redundant applications, underutilized tools, and missed renewals.
What’s scary is this is current-state, as Gartner projects SaaS spend will continue to grow 15% to 20% every single year through 2026. In fact, SaaS today is often your largest operating expense next to headcount, and it’s ripe for optimization. It’s the ideal place to start saving.
We recently had a large financial services firm tell us they thought they were spending about $100 million on SaaS annually. We plugged in our discovery system and found they were actually spending $300 million a year annually on SaaS — a $200 million gap. It’s pretty crazy when you consider what they thought they knew versus their actual spend.
Another Zylo customer, Momentive, realized about $7 million in savings by using Zylo to discover license optimization opportunities and operationalize their renewal process. These are significant savings and really illustrate the business value of SaaS Management.
#3: Fend Off Potential Disaster
The unregulated nature of SaaS acquisition leads to shadow IT, which puts businesses at risk of data breaches, decreased compliance with data and privacy regulations, and out-of-control spending.
Through our SaaS Management Index, we found nearly 1 in 10 (7%) employees expense SaaS applications without alerting IT. It equates to about 37% of your applications flying under the radar.
Gartner recently came out with a stat — they call it a strategic assumption — and they’re saying organizations that don’t centrally manage their SaaS applications by 2027 will be 5x more susceptible to a cyber incident.
To put the risk in perspective, IBM’s Cost of a Data Breach Report says the average cost of a data breach in 2024 is $4.45 million, a 15% increase over the last three years.
It’s Never Too Late to Get Started on SaaS Management
Bottom Line: You always need to be laser-focused on the business value of SaaS Management. You can achieve the goal by always utilizing a source of truth, optimizing your application adoption and license agreements, and reducing risk to your organization.
Ready to see how Zylo can help your organization take control of SaaS Management? Reach out today for a free consultation and demo.
