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The following is a guest article from Eric Christopher, CEO of Zylo, posted on CIO Dive.
As we enter the last two months of the calendar year, most teams have already put a lot of time and analysis into what the 2018 budgets will look like for the enterprise, down to each business unit.Connecting historic data and future growth plans is the best way to forecast budgets. With more companies implementing a digital transformation strategy, technology spending and IT budgets are an increasingly important aspect of the budget planning process.Cloud and SaaS applications are a growing expense area and one of the most difficult areas to track and manage, which makes it harder to find and trust historical data.
Technology line items now show up on specific departmental budgets, not just the IT budget, so there is not usually one single owner of SaaS.Even though IT does not usually own the entire SaaS budget across the enterprise, IT certainly should have visibility into all of the SaaS spend and technology in use.IT leaders who implement security, identity and overall management for SaaS solutions are able to figure out how to drive security and innovation in this age of the subscription economy and distributed technology purchasing.Technology decision makers armed with SaaS spend data and being able to present that data to other business leaders in a meaningful way puts IT leaders in a strategic position as they push the organization’s digital strategy forward.Comprehensive budget planning is difficult for SaaS programs because SaaS purchasing is distributed across the enterprise and there is not usually a single system of record or master spreadsheet.
Here are five ways to craft a SaaS budget with confidence:
- Create one SaaS system of record: Kick off the 2018 planning discussion by reviewing one SaaS system of record for the enterprise that categorizes all SaaS applications regardless of which department purchased it.
- Analyze SaaS spend by employee: Analyze SaaS application spend per employee, by department, role or function, and pair this data with hiring plans to provide an accurate way to review SaaS license management current costs and plan for growth.
- Evaluate SaaS application utilization: Look at utilization measurement data for each SaaS application to enable the enterprise to make informed decisions about what applications to renew, or not, based on the value each SaaS application provides.
- Evaluate overlapping functionality: Use one cloud software management platform to enable IT to uncover any applications with overlapping functionality and link SaaS owners together to determine appropriate consolidation opportunities.
- Create a SaaS renewal calendar: A comprehensive calendar enables the best budget forecast. Evaluating actual SaaS utilization versus forecasted usage throughout the year allows you to adjust in real-time, before key renewal dates.
The number of SaaS and cloud applications and the amount of spend will vary based on the size of the organization and how many systems are in the cloud.IT may or may not care about every single SaaS application, but understanding the entire software spend is valuable to help justify the overarching technology budget and identify cost savings opportunities across the enterprise.
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