The Definitive Guide to

SaaS Management

Everything about what SaaS Management (SM) is, why you should know about it, what are the key benefits, and what best practices to get started.

► Find out what to look for in the SaaS Management platform!

Introduction

SaaS evolved from the growing need for centralized computing during the 3rd industrial revolution. Salesforce’s “The End of Software¹” campaign in 2000 and Concur’s resistance to a floppy disk and CD-ROM production invited a world of app services delivered via the internet.

This led to an explosion in cloud computing for the everyday person and inexpensive, web-based business licensing models. As history shows, disruptive advances invite both chaos and challenge, alongside productivity and growth.

And solution for the SaaS chaos? Welcome to SaaS Management.

What is SaaS Management?

SaaS Management (SM) 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 to manage SaaS applications, the SaaS Management platform rather uses advanced methods, e.g. integrations with ERP, HR, expense and contract systems, SSOs, direct SaaS integrations, email scanning, or web traffic monitoring.

For many, SM adapts those processes once used to manage perpetual, on-premise software and modifies them to fit the realities of the subscription model.

Where existing ITAM and SAM tools break down for full-scale SaaS management, new platforms from a variety of specialized vendors simplify the SaaS systems management effort.

It enables IT, finance, and security leaders to manage a business with informed and faster decisions. Which consequently means a cost-efficient and secure organization.

 

What challenges does SaaS growth bring to companies?

Accessibility, high adoption rate, lower costs, easy upgrades, and smooth integrations are the initial SaaS benefits. Once organizations subscribe to hundreds of SaaS vendors and implement multiple instances & licenses, the original promise of SaaS can quickly deteriorate.

Some of the challenges growing SaaS portfolios bring are:

  • Wasted spend on overlapping services, excess licenses or usage, and overpriced vendors
  • Increased service and user lifecycle management time
  • Hundreds of renewals to manage
  • Failed SaaS implementations
  • Unmanaged SaaS applications — Shadow IT

Too many companies only focus on the transition to "cloud-first". Then, they face a new problem: limited visibility and control once SaaS consumes their business.

 

Why do organizations need SaaS Management?

There is a problem since we’ve never been taught how to control and manage SaaS subscriptions, plus many organizations rely on incomplete CMP or direct vendor analytics —SaaS is not software on-prem and it’s not a typical IT Asset.

Besides the SaaS challenges mentioned above, software vendors develop new technologies, pricing structures, and features to feed the appetites of cloud-crazy companies, LeanIX expects even more spectacular SaaS adoption in the next decade. At the same time, Gartner² expects 85% of enterprises to operate ‘cloud-first' by 2025.

Employees and departments love to buy new SaaS technologies because it’s fast, easy and it enables them to increase their productivity when they are in need of results. Therefore, it’s not surprising that a typical employee uses 44³ SaaS apps to do their job.

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Organizations and spreadsheets can’t keep up with the SaaS growth. Let the numbers show it:
  • Enterprises are wasting up to 30%³ of their SaaS spend.
  • The annual SaaS spend per employee totals more than $13k³.
  • The typical 800-person US company uses 141³ SaaS apps across the organization.

SaaS purchasing has become easy, decentralized, and way more uncontrollable for the leaders than it needs to be.

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The key benefits of SaaS Management

The five biggest benefits of using SaaS Management to manage SaaS systems in the organization are:

Visibility into your SaaS estate

SaaS Management gives a complete picture of SaaS subscriptions, user licenses, attribution of ownership, contracts, renewals and spend, and also captures vital usage trend data enabling informed decision-making about renewals and future investments.

The beauty of SaaS is when 30% of subscriptions are unused, it gives companies an option to not renew or renegotiate SaaS agreements in the next contract period. Visibility was the initial use case explored by SaaS Management platforms, and it remains the main one.

SaaS spend optimization―Increase SaaS ROI

SaaS Managers can use the usage data gathered by their tools to determine whether organizations are receiving value from SaaS investments. SM platforms and SaaS spend optimization processes allow them to remove excess vendors, licenses, and redundant software that is not needed.

SM insights are used to drive discounts, e.g. by consolidating multiple Salesforce instances and contracts, or to yield savings during a competitive bid process for exclusivity, when using Webex, Zoom, GoToMeeting, and Skype for video conferencing.

Security gaps removal and compliance certainty

First, SaaS management removes SaaS security threats by preventing shadow IT. Integrations allow tracking of any software purchases happening across the departments一even when they are bought through corporate credit cards.

Secondly, access to an organization’s sensitive data is secured by automatically identifying and deprovisioning licenses with employees that already left the company.

Having full SaaS visibility enables leaders to identify SaaS vendors that comply with the organization’s policies and ensure compliance with regulatory requirements, such as, GDPR, SOC2, and others.

SaaS Management enables organizations to keep control over business risks with intelligent insights.

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Operational efficiency

Continuous SaaS stack growth means teams have multiple renewals per week to process. SM saves time by having all the renewal information in one spot一ownership information, usage data, contract value, and renewal dates (renewals calendar).

Finance, HR, and IT analysts are able to switch from active to proactive approach when they know when renewals are due and answer questions, such as:

  • What software does a salesperson need to start working?
  • How much does software for each marketing person costs? How much is the departmental cost?
  • How much will our software cost drop when an employee leaves?

Employee onboarding and offboarding take time, especially when the complete SaaS portfolio is unknown. SM data speeds up recognition of exactly which applications a person leaving was signed up for and automates the IT request process to ensure employees receive the software they need to do their job quickly and with minimum impact on IT resources.

Employee satisfaction

SM enables users to recognize the value of SaaS enterprise investments and ensures the employees are getting the most out of them.

It provides insight into whether users are fully adopting new technologies and can uncover areas where training or an internal comms campaign can help. SM does this through fine-grained tracking of which features are being used by which users.

The provision of a self-service application portal in SM enables users to get the tools they need to do their jobs through a secure, authorized workflow.

Let's see how these benefits can be achieved by the SaaS management platform.

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How does the SaaS Management platform help?

SaaS management platforms bring programmatic discovery of what SaaS is in use, who owns it, and what the company is obligated to pay for through hundreds of integrations.

These insights are useful for tracking and record-keeping, but they also prove if SaaS delivers the value/ROI it is supposed to. Companies are able to build a system of record that captures the variety of characteristics of each tool.

SaaS portfolio discovery uncovers data elements that each tool includes:
  • Total number of SaaS applications
  • Total number of licenses, seats, users
  • Spending per application
  • Total spend (with anticipated annual and monthly spend)
  • Security and compliance profile
  • Application owner
  • Application category
  • Type of purchase (expensed vs. AP)
  • SaaS renewal periods and contract terms (SaaS renewal calendar)

Discovery exposes issues of unclear SaaS ownership. Enterprises find it difficult to build a renewal case, for example, when there is no budget owner or champion. Clarifying ownership adds accountability for adoption and utilization benchmarks.

With the SaaS inventory analysis, IT, Finance, and InfoSec leaders switch from reactive to a proactive approach since they can:

  • Remove overlapping services
  • Remove excess licenses
  • Negotiate overpriced vendors
  • Control unmanaged applications — shadow IT
  • Track SaaS vendors compliance
  • Plan for renewals
  • Accurately forecast & budget SaaS spend

Programmatic SaaS discovery of SaaS applications proves to be the most effective way to control SaaS growth.

 

6StepsSMloop

How to get started with SaaS Management

You know your business and which areas are noticeably undisciplined—likely losing money or failing to generate a return from their investments. The market of SaaS management tools out there is growing and each one has its differentiators, therefore it’s necessary to know how to get started:

Build a buy-in

Defining your SaaS Management business case is the key to success. When you know what you want to achieve, and why, you can get the necessary buy-in. LeanIX suggests aligning views internally with:

  • Assign ownership teams with cross-functional perspective and relationships
  • Define a clear vision for SaaS Management, including priority outcomes
  • Agree to a holistic approach to SM. This includes managing SaaS through approval, acquisition, usage, and renewal or retirement
  • Build relationships and plan collaboration with functional SM stakeholders
  • Determine experience owners (e.g., FP&A or IT) and dedicate the human capital needed for management
  • Evaluate SM platforms and select a vendor with industry expertise and a dedicated support team

Collect requirements and set goals

Stakeholders need shared objectives—this starts with expectation setting at the executive level that cascades throughout the business. Defining these objects is a set of collaborative experiences. Interested stakeholders (ideally, with varying levels of seniority) can work together to broadly discuss opportunities for the business to improve. Then, project leads can work tactically to deliver these.

C-level leaders should discuss main challenges including issues of risk, compliance, value-creation, employee engagement, and/or cost-reduction. These may be prioritized, quantified, and assigned clear targets. A task force of IT, finance, HR, and security leaders may then be assigned to evaluate SM platforms and map out an implementation plan.

Navigate vendors and platform differences

SaaS Management marketplace features a crop of innovative platforms working inside both startups and Fortune 100 companies. Platform capabilities do vary, however, LeanIX finds that platforms’ support of the benefits discussed earlier often differs.

Ask the questions to help assess the right-fit

Understanding platform capabilities is essential to finding a right-fit solution. Often, platforms seem the same; however, vendors emphasize a variety of features or functions and prioritize certain business drivers, like visibility, differently.

Below, we organize sample sets of vendor discussion topics. Verify these in the context of your business goals during an SM platform evaluation:

  • Unlocking visibility and discovery
  • Realizing value delivery
  • Improving risk management
  • Supporting operational efficiency

Deployment Timeline

While the deployment times vary based on the project complexity, enterprises generally have a platform running four to six weeks after contract signing.

To ensure swift onboarding secure a company-wide alignment around the problems that SM intends to solve, allocate internal resources for this initiative, compile input information about SaaS estate, and sharing documentation around any past attempts to solve SM.

Conclusion

No matter how mature your SaaS management processes are–from reasonably defined to non-existent–it’s not too late to expand control.

Smart businesses are moving en masse to SaaS Management to restore both the value promise of cloud applications and mitigate debilitating security and compliance issues. The importance and sense of urgency to become a more agile digital business are clear.

¹ https://www.provokemedia.com/latest/article/the-launch-of-salesforce-com-and-the-end-of-software

² https://www.gartner.com/en/documents/3994453/predicts-2021-building-on-cloud-computing-as-the-new-nor

³ Statistics are taken from 2019 The State of SaaS Business Spend report conducted by Cleanshelf (now a part of LeanIX).

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Answers to frequently asked questions on SaaS Management

What is SaaS Management?

SaaS Management (SM) 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.

How long does it take to implement SaaS Management?

SaaS Management deployment times vary based on project complexity, enterprises generally have a platform running four to six weeks after contract signing.

Can I use SaaS Management instead of other asset management systems (ITAM, SAM)?

For companies that use only SaaS applications, this is a necessary discipline to run an efficient and secure organization, since SaaS Management is the only discipline to focus specifically on SaaS. For the companies that use SaaS only partially, having an established ITAM or SAM system is a great starting point to try and get some SaaS consumption and visibility. Therefore, SaaS Management is a compliment to your existing processes.

Who is SaaS Management for?

SaaS Management is for companies and leaders who want to get rich insights into their SaaS estate. Our active users are IT, finance, and security leaders who can now support and collaborate with SAM, HR, procurement, project manager, and business system teams with reliable data from one place.

How do I know if SaaS Management is right for me?

If you want to achieve an effective and proactive approach to business control and planning within an organization that uses SaaS applications, SaaS Management proves to be the right fit.

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