As organizations increasingly trade their on-prem software for SaaS, the need for a dedicated SaaS Management strategy becomes paramount. Left unchecked, the dynamic nature of SaaS and decentralized purchasing makes it virtually impossible to keep tabs on all of the tools entering and exiting your organization.
In fact, our research shows the average organization pays for 291 SaaS applications and sees six new SaaS tools 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, let alone leverage the most out of your service agreements.
At Zylo, we believe SaaS management is more than a process, it’s a practice. It’s not one and done. We operate on the philosophy that businesses must first organize their SaaS before they can begin to optimize and orchestrate their investment to truly serve their business needs.
To be successful, organizations need to remain flexible and understand SaaS Management changes and shifts over time. They also benefit from gaining executive buy-in to reinforce their SaaS management vision and goals, says Ashley Hickman, Zylo’s Customer Success Manager.
“Having support from a leadership team or sponsor is huge,” Hickman says. “That’s ultimately where we see our customers be the most successful. Because, SaaS Management is going to shift. It’s going to iterate. It’s going to change. You need to have collaboration across the business, across the teams. As we’ve said in the past, SaaS is a team sport.”
No matter where your organization falls on the SaaS Management maturity spectrum, we’ll walk you through each phase — organizing, optimizing, and orchestrating — and cover the key points you need to consider to succeed.
Before you can begin to organize the mess, you need to gain 100% visibility into all SaaS applications, usage, and spend.
“You don’t know where to start if you don’t know what you already have,” Hickman says.
In the organizing stage, businesses use SaaS Management tools to peek behind the scenes and truly start to understand their SaaS investment. It can feel like ripping off a bandage, and you’ll likely uncover some unexpected surprises. Organizations master the organizing phase by:
- Gaining full discovery: Using a SaaS Management tool, you can unlock data insights to identify all SaaS across the business, purchasing inefficiencies, shadow IT (software unknown to IT), as well as redundant applications with functional overlap, such as multiple project management or file storage apps.
- Mapping redundant applications: Via application rationalization — the process of identifying which applications should remain in use, and which need replacement, retirement, or consolidation — you can identify redundant applications, unused licenses, wasted IT spend, and tools that present security and compliance issues.
- Understanding SaaS ownership within the organization: Due to the dynamic nature of SaaS, new purchases increasingly happen outside the purview of IT teams. Our 2022 SaaS Management Index found roughly one in five employees expense SaaS purchases. Understanding ownership, whether by IT, lines of business, or employees, is key to effective SaaS Management as your organization matures toward the optimization phase.
- Using benchmarks to inform strategy: SaaS benchmarking allows you to compare how your organization stacks up against similar companies in terms of SaaS spend, sprawl, and application type.
After discovering, then organizing your SaaS inventory, take action by implementing a data-driven approach to SaaS Management.
In the optimization phase, organizations centralize their SaaS Management strategy for onboarding and offboarding licenses, shift their efforts from identifying low-hanging fruit optimizations to programmatic license management, and continue to identify cost savings via utilization, adoption, and benchmark data.
SaaS optimization includes:
- Proactively planning and executing on license-saving opportunities: Remember, SaaS Management is an ongoing practice. Cost optimization requires regular monitoring of all applications entering and leaving the organization, so you can eliminate duplicate software, consolidate redundant applications, and downgrade over-provisioned users, among other cost-saving wins.
- Marrying renewal calendars and benchmarks to ensure the best pricing: Benchmarking shows if you’re paying more than others for similar software. A dedicated renewal calendar helps you proactively plan ahead for renewals and ensures adequate time to analyze benchmark pricing and consider your needs. You can leverage the data at negotiation, especially if the vendor wants to raise costs.
- Reconciling purchases to get the best tool for the job: Further benchmarking data reveals the key tools your competitors rely on, so you can make sure your teams can access the best apps for the job.
- Creating a review policy for net-new apps: An established review board of stakeholders from across the organization should green-light all SaaS purchases. Employees must submit a request to the committee and gain approval before making a purchase.
- Enforcing a single sign-on (SSO) roadmap: With a clear picture of all SaaS across the organization, you can establish and enforce a policy requiring all software be secured behind SSO.
With full discovery and a SaaS Management strategy in place, you can move to the next phase of SaaS Management maturity. This is where you begin to orchestrate the data across key business and application owners to support your strategic SaaS Management vision and goals.
Once organizations reach peak maturity of the orchestrating stage, they typically prioritize:
- Minimizing functional overlap and supporting ongoing rationalization efforts.
- Automating the auditing and monitoring of new applications, application renewals, and app-level spend thresholds.
- Deploying freedom-within-a-framework strategies to give employees more control over choosing SaaS, but with guardrails in place.
Mature Your Organization’s SaaS Management Practice
No matter where your organization stands in the SaaS Management maturity spectrum, it’s important to remember effective SaaS governance requires constant surveillance. With a clear understanding of all software applications purchased by employees, LOBs, and IT, you can begin to reap the benefits of a mature SaaS strategy.
Ready to mature your SaaS Management strategy? Schedule a personalized demo to see how Zylo helps companies organize, optimize, and orchestrate SaaS to achieve their unique business goals.