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The rise of enterprise SaaS management

SaaS
(Image credit: Image Credit: Wright Studio / Shutterstock)

Every day millions of professionals tap into Software-as-a-Service (SaaS) apps to get work done.

From Customer Relationship Management (CRM) to Project Management Software (i.e., Asana, Trello, etc.) and communication tools, like Slack or Zoom, SaaS is nearly unavoidable in today’s modern business. 

As SaaS adoption skyrockets, many organizations are waking up to find hundreds of SaaS applications in use. While SaaS usage represents an opportunity to increase productivity and efficiency, it also increases complexity for IT administrators and enterprise architects. 

Take a minute and ask yourself – how much SaaS is your organization using? We at LeanIX today have a $1.8M SaaS spend for 360 employees - approximately $5,000 per employee. For us, it is a key priority to make sure we get the most out of our SaaS subscriptions by not overspending on unused licenses, being prepared ahead of renewals or by revoking access when employees leave or change roles.

If LeanIX is investing this much into SaaS, there’s no denying that SaaS is now fully mainstream and embraced by SMB’s and large enterprises alike. Highly specialized apps now exist to manage any conceivable business function. In the marketing industry alone, there are now more than 7,000 solutions available. Worldwide, it is estimated there are more than 11,000 SaaS companies, and the number continues to grow daily. 

The numbers back up this trend. Last year, SaaS broke $100 billion in annual revenue and by 2030, it is predicted that 80 percent of software will be used and purchased as SaaS. However, as SaaS adoption continues to grow, a new set of challenges have emerged for IT leaders. Consider that on average, 30 percent of SaaS spend is wasted because of under-used, unused, excess licenses and overpriced vendors. What’s more, 77 percent of organizations have experienced security incidents directly related to SaaS. When it comes to ROI metrics for overall SaaS usage, it is nearly impossible to gauge.

If you’re like most businesses, you might not know exactly how many SaaS apps are used in total. How many are on auto-renewal? Who purchased them, and what is the total cost? As you look dig deeper, are your SaaS applications raising security concerns with exposed data and shadow IT?

To address these issues, a fast-growing category of software, called SaaS Management, has emerged to help IT teams and business leaders regain control of SaaS.

What is SaaS management? 

SaaS Management is all of the processes required to efficiently scale cloud software, extend businesses’ strategic objectives, and account for users’ needs – while upholding data security and privacy standards. Instead of using spreadsheets, SaaS Management platforms use advanced methods, e.g., integrations with ERP, HR, expense and contract systems, SSOs, direct SaaS integrations, or web traffic monitoring. In short, it enables IT, finance, and security leaders to manage a business with informed and faster decisions.

The following core tenets of SaaS Management can help you maximize your investment and value for SaaS.

Visibility: Gaining visibility through discovery is the basis for knowing what and how much SaaS you use within your organization. Knowledge is power and the first step in managing your SaaS portfolio. Whether it’s a one-time audit -- or if you’re using a SaaS management platform -- gaining a 360-degree view and contextual insights will enlighten and, often, shock you. Remember, many SaaS apps were brought into the organization without IT involvement and therefore, not authenticated to your corporate directory. Once you establish visibility, you can move deeper into your SaaS management journey.

Cost Management: SaaS is generally licensed on a per-user, per-month basis with no consideration given to actual usage. The onus is on you to drive value by ensuring that the software is used properly. IT administrators need accurate usage data to determine whether the organization is receiving value from SaaS investments. 

Three important metrics of SaaS cost management include:

  1. Usage and by whom 
  2. Cost of usage based on features used 
  3. Overlap with other similar tools in your SaaS toolbox 

Risk Management: Having hundreds of SaaS apps and thousands of users is a nightmare for risk management. What happens when employees leave? Do they have the password for the corporate Twitter account? Or continue to use Dropbox for personal use? The list of scenarios is endless. Poor user hygiene and lifecycle management, or weak on- and off-boarding practices, are leading causes for SaaS mismanagement. It also increases your company’s reputation risk and the likelihood of data breaches and operational and business continuity risks. 

Operational Efficiency: As stated above, SaaS apps are now a fast-growing sector of enterprise computing. Employees and teams love them for their capabilities and convenience. However, IT and procurement teams cannot keep up with the weekly waves of contract renewals. This push-and-pull of efficiency and productivity presents obvious challenges and emerging upside value. One of the emerging trends to consider is the in-house enterprise app store. Built on usage and data insights, it helps users discover, request and gain approval for SaaS applications without circumventing approval channels.

SaaS management helps IT teams operate more efficiently, helps risk, finance and legal departments sleep easier, and allows employees to use the tools they want. When it comes to concerns over “shadow IT,” SaaS can be a culprit for sure, but effective SaaS management can elevate the downside of relentless sprawl. 

SaaS is a significant force in modern enterprise computing and will undoubtedly continue its unrelenting march into your organization. Just as software was eating the world a decade ago, SaaS has assumed the role of disruptor. No matter how mature your SaaS management processes are, from reasonably defined to non-existent, it’s not too late to expand your visibility and management of all your SaaS apps.

André Christ, Co-Founder and CEO, LeanIX

André Christ is Co-Founder and CEO of LeanIX.