Overall IT may decrease by 8% past 2020, but SaaS spend (as a portion of overall IT) increased from 9% to 14%. So your overall IT spend may decrease, but SaaS is an important area for growth. How many of your critical applications run on SaaS? Can you imagine your business without Zoom, or Slack, or Salesforce? Learn how smart SaaS management can help you maximize SaaS in your organization?
What is SaaS Management?
SaaS Management is tracking and managing all of a company’s SaaS (Software as a Service) subscriptions in order to reduce costs and increase usage.
Good SaaS management platforms allow company leaders to see all their SaaS applications (Slack, Zoom, Teams, etc.), who’s using them, and the value the company is getting.
Do any of these situations sound familiar to you?
- The CIO wants to know what apps we are using, but our app tracking spreadsheet is outdated – again!
- We are behind on new user license provisioning requests – again!
- How do we know we need 1,163 of the Tier 1 licenses? Are people even using all those high-end features?
- Another auto-renew put us over budget — again!
- We are paying for four cloud storage apps… why?
The average company has over 180 SaaS applications, with large enterprises having over 1,000. Chances are you likely have hundreds of software-as-a-service (SaaS) applications in your company. The explosion of SaaS applications in the enterprise, often purchased by teams and business units without informing IT, is no longer news.
What is news is how acute this problem has become. While 88% of the IT executives surveyed by Pulse and Productiv think a central location for SaaS management simplifies internal processes, increases visibility, and provides teams the opportunity to focus more on strategic initiatives, 62% of respondents admit that they rely on vendors for the data they need to understand usage.
Without a firm grip on SaaS management, this trend is likely to persist.
Pitfalls of SaaS Management Today
According to The State of SaaS Management Survey, 86% of companies automating their SaaS management process using dedicated software also rely on manual methods like relying on manual, error-prone, and frequently outdated spreadsheets and vendor notifications.
Some rely on internal surveys to glean what users are using and what they need to get their work done. These surveys surface less information than expected – users who are purchasing SaaS on their own don’t want IT to interfere with or “shut down” their favorite applications.
Even if a company has started adopting a SaaS management platform for application discovery, you may only discover applications that have had a financial transaction or have users who have logged in within a certain time period. This is a very narrow lens for multiple reasons:
Low Barrier to Entry
People often sign up for free SaaS applications which may go undetected. With no need to swipe a company credit card, the low barrier to entry for many SaaS applications is a trip hazard for IT departments.
Lack of Detailed Insight
Managing SaaS based on log-ins does not show you if users are getting value. You can de-provision users if they haven’t logged in within 30 days, but you will not know what Zoom or Salesforce license to get if you don’t know detailed feature usage.
Also, many redundant applications (such as multiple cloud-based file sharing apps, team chat apps, and others) will have similar counts of logged-in or provisioned users. Without understanding how or how frequently the application is used, incorrect rationalization and rightsizing decisions are made.
Fear of Stolen Empowerment
There’s another thing to consider. In today’s world where employee choice is a key driver of employee happiness and retention, heavy-handed SaaS management by IT and procurement is not only unpopular but can have negative consequences.
So what is the solution?
Employee Engagement with Applications: The Secret to Smarter SaaS management
Forward-looking companies such as Fox have realized they need to make SaaS management decisions based on smarter, deeper user engagement data. They want to drive adoption of SaaS that delivers real value to their teams and their business. So they focus on understanding:
- What applications are actually being used day in, day out by users?
- What features of these applications are users actually using and why?
- Are there trends or patterns in how different teams use applications?
- Is there a difference in application adoption by teams, locations, devices, business functions, or any other criteria?
Let me make it real. Here are three examples of critical SaaS management decisions made smarter with user engagement data:
1. SaaS renewal planning
IT leaders and procurement teams are demanding more control over their renewal decisions, and want it to be data-driven. This goes beyond just tracking unused licenses to manage spend. They want to understand what applications and features are in use, what users really need, and how that maps to license types.
For example, understanding how users are using the expensive features of high-end licenses for products such as ServiceNow leads to better decisions about license mix to purchase at renewal. In the example here, there are many users who have the expensive Fulfiller license type for ServiceNow, and their engagement shows they would be equally served by lower-end licenses. Using this type of engagement data allows the IT team to renew the contract with a more customized license type mix and save real money without diminishing important features and productivity.
2. License allocation and management
Once allocated, user licenses are no longer available for other users even if they are underutilized. When you can track actual usage of features, it’s possible to make decisions such as:
- Proactively upgrade a user’s license if they are often using features that seem advanced – they will love IT for it!
- Warn a user and proactively downgrade their license if you see they don’t use high-end features – they won’t notice the difference and you will optimize spend
Ideally, your SaaS management software platform automates workflows so you can set it up once and see the ongoing value. In the example here, we have it set up so that anyone who is provisioned a ServiceNow Fulfiller license but has only used the lower-end Requester license features gets downgraded.
3. Managing redundant SaaS applications
Often when redundant applications, such as Box/Dropbox/Google Drive for cloud-based file-sharing, or Slack/Microsoft Teams for team chat are in the mix, it is difficult to make a call on leaving them alone or standardizing on one.
Having data about what users are constantly using and how they are using these applications can save you a lot of money, as well as eliminate confusion about which applications to keep active.
One of our customers made a smart decision about choosing between Slack and Microsoft Teams. If they had just compared the number of provisioned users on each, they would have been left managing two expensive applications. Instead, they focused on user engagement and were able to standardize on one application.
Using Data to Drive Smarter SaaS Management
Savvy SaaS management is critical to streamline daily IT tasks, optimize spend, run a stress-free procurement process, and drive adoption of your approved applications.
The next iteration of SaaS management brings employee choice into the mix. Relying on data about user engagement with SaaS applications means that IT and procurement can achieve their goals, while also giving employees the tools they know and love – a win-win for all!
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