4 steps to reduce SaaS OpEx and still optimize for remote work
Today, IT and Finance teams are simultaneously being asked to both reduce costs and manage a dramatic surge in remote work.
The largest IT cost at many companies is the sprawl of hundreds of SaaS applications that drive significant ongoing operational expense, often referred to as SaaS OpEx.
How can IT teams reduce SaaS OpEx? Which applications are being used and which aren’t?
Definition: SaaS Rightsizing
SaaS Rightsizing is a balanced approach of reducing application spend while increasing business value from those applications. Rightsizing extends beyond tracking software licenses and logins to consider employee engagement and usage. To properly rightsize applications, IT and Finance teams need several layers of information:
- Application contracts, costs, and renewal timing
- Provisioned and active application licenses by license tier
- Employee engagement data by feature, team, location, and other factors
How to Rightsize
1. Throw away SaaS tracking spreadsheets
Most companies rely on manually updated out-of-date spreadsheets and employee surveys to understand which employees are using which systems. That process just doesn’t work for hundreds of SaaS applications.
Data on employees, licenses, and application usage is constantly changing. To make accurate decisions about the need to decrease or increase application licenses, you must also understand how employees actually use applications, right down to the feature level. License and login activity is not enough.
Example: The CIO at Apttus recently implemented Productiv and shared that “By putting all of our apps into Productiv, 100% of our landscape is now manageable out of the box. We’re no longer spending time doing data entry. We’re really looking at data analysis and doing higher quality work. I mean to the point where we’ve saved at least 10+ hours a week of my team’s time and more in the business teams as well.”
2. Reclaim existing SaaS licenses
For many SaaS applications, you don’t have to wait until the next renewal cycle to optimize spend; there are immediate opportunities to reclaim or reprovision licenses.
Configure custom rules to enable automatic reclaim and reprovisioning of your existing licenses. This allows you to easily and automatically adjust license tiers for specific users, teams, or based on other factors, so that every employee has exactly what they need to get their job done.
Example: One Productiv customer achieved almost $150K in immediate value using automatic reclaim and license tier downgrading. This customer was planning to purchase additional ServiceNow licenses to support users in a new region. Using the rightsizing recommendations, Productiv data showed that while the customer had many users provisioned with expensive Fulfiller licenses, many of the users were only using features of the basic Requester license. The customer was able to use Productiv to automatically downgrade those users, obviating the need to buy additional licenses to support the new region.
3. Identify overlapping and under-used SaaS applications
A portfolio of SaaS applications with similar or overlapping functionality is common as departments or business units purchased their own applications, IT rolled out others, and acquired or portfolio companies have still others.
Only looking at provisioned or logged-in users can result in false assumptions about which applications to standardize on, as users may use these apps for different reasons. Adoption may also vary significantly. Comparing which application users engage with which features they use helps maintain a lean SaaS portfolio.
Example: One Productiv customer was using both Microsoft Teams and Slack. And while the number of provisioned users for both applications was the same, Slack had 10x user engagement compared to Teams. Understanding how users engage with and adopt applications is critical for IT to empower employees, while also making tough decisions on what to include in the SaaS portfolio.
4. Be more prepared for renewals
SaaS application renewals come frequently, and data-driven renewal decision making is almost impossible with manual tracking and spreadsheets.
A centralized, up-to-date, and comprehensive view of applications, renewal dates, contracts, and most importantly, recommendations for optimal license purchases is critical. Not to mention timely notifications about upcoming renewals. Whether you want to extend the shelf-life of your existing licenses or want to prepare for an upcoming renewal negotiation, insights about employee usage set you up for significant cost savings.
Example: One customer in the process of renewing Box realized that with Productiv they could tell which teams and employees needed the high-end license tier features. They were able to tie application feature usage to license assignments, enabling the customer to rightsize their Box renewal by over 20%.
Success with Productiv
Companies like Okta, Uber, Equinix, Apttus, HashiCorp, and others use Productiv to take control of their SaaS OpEx. To help manage your SaaS OpEx, we are offering a free 30-day trial of Productiv, so that you can quickly start understanding your organization’s SaaS portfolio and spend. To learn more, contact us here or below.