Where has your IT budget gone? Check your SaaS.

[Bryan Blackburn]

IT leaders everywhere are dealing with reduced budgets year after year, but SaaS spending continues to rise. Gartner is forecasting global SaaS spending to reach $55.1 billion in 2018, up 19% from 2017.

As SaaS apps have become more and more accessible, easier to purchase, and used more easily on multiple devices, business stakeholders are purchasing more SaaS apps for themselves and their teams without the involvement of IT. Though SaaS is making work easier, the problem being presented is that without IT’s involvement these apps go largely unmanaged and are inaccurately accounted for.

When the finance team is left to sort out who is monetarily responsible for these purchases, tasks are assigned to IT, perhaps for no other reason than that's how it has always been done. IT purchases and manages software for the entire company.

Many IT teams are left to figure out who purchased the products they are being held responsible for, as well as determine who has access, what does the deal structure look like, if the business is really getting its money's worth, and how to move forward with proper management strategies.

SaaS License Management

A shift to SaaS License Management needs to be made by both IT and finance in order to accurately reflect spending on software throughout a business. By implementing a SaaS solution, IT and finance can discover all of the SaaS and software being purchased and allocate the spend to the appropriate cost center. When IT and finance work together with a platform that discovers SaaS apps, tracks usage, and allows teams to collaborate when managing and optimizing the vendor lifecycle, companies save money, have better budgetary control, tighten security, and empower employees to make software purchases that help them do their jobs better.

The SaaS Sprawl

The use of SaaS in the workplace is rapidly increasing. While cloud-based applications and Software-as-a-Service models can improve workplace performance and make work easier, it leaves companies vulnerable to security threats, losing data, overspending, and underperforming.

Why?

SaaS is easy to buy but difficult to manage.

SaaS vendors aren’t selling their software to your finance or IT teams. They’re selling to the end-user who can easily make an at-will purchase with any credit card. More often than not these SaaS purchases fall below the procurement threshold, meaning most can bypass IT, finance, and procurement oversight for their single-user purchase. SaaS purchases made without appropriate approval could cause a number of issues. Unapproved and unknown business purchases could lead to trouble during an audit if the money spent cannot be traced. The software might also fall short in terms of the privacy and security needs for your business-sensitive data. Or, you could simply be spending too much on underused software.

Simply put, IT, finance, and procurement do not have an easy way to collaborate with SaaS buyers as companies grow and business needs change. To properly manage the increasing amount of SaaS, IT teams must track down vendor owners and rummage around for contract details. This is where a Discovery tool plays an important role in identifying in-use applications across the enterprise. SaaS Discovery is the first step to solving the SaaS sprawl issue. Discovery provides the necessary spend information to address unapproved or duplicate purchases—or help identify software previously left off IT’s radar. Unknown software can be very risky for your organization because IT has not had the chance to investigate or approve whether or not the software is compliant with security needs.

Stale Licenses

Technology moves quickly, and many have fallen victim to “shiny new object syndrome” as they sift through the countless number of software and applications. Inexperienced SaaS buyers might not have the insight to determine the value of their purchase. Underused SaaS could be costing you a lot of money as your wasted spend continues to compound.

A stale license can be defined as one that is purchased and provisioned but goes unused. For example, limited or no user activity could qualify as a stale license because the application is not being used enough to justify the spend. Additionally, ineffective deprovisioning processes contribute to high SaaS costs because licenses are still being paid for employees who are no longer associated with that business.

Depending on the size of the organization, nearly half a million dollars can be wasted on stale licenses, per application each year. To reduce overlapping services, a SaaS audit (through discovery) can help consolidate your teams onto one tool. This will make collaboration easier and reduce costs. For example, you may find that your business is using five or six different web conferencing services. As you renegotiate your renewals and track your spend, look for areas where one product overlaps with another and consider the benefits of moving everyone into one, universal tool.

Even experienced IT teams deploy licenses, but often are unable to effectively track their usage. Would you be able to determine whether or not the 100 licenses you deployed were actually used?

SaaS Redundancies

Without communication and collaboration between vendor owners and SaaS buyers, your business is probably purchasing redundant software that performs the same tasks. This occurs when there is a business-wide lack of awareness of all the tools available.

Since the emergence of cloud-based SaaS applications, it seems new services and applications are hitting the market every day. For each SaaS service, there are multiple vendors offering the same capabilities. With everyone now able to become a SaaS buyer by visiting a vendor website and entering credit card information, it is increasingly difficult to track whether or not departments and teams are using the same software, have purchased their own software, or have purchased more licenses for a service that your company already uses.

These software redundancies could be costing your business a lot of money if SaaS spending is left unmonitored or unmanaged. A SaaS License Management tool serves as your much-needed SaaS manager, helping you discover SaaS vendors, reduce software redundancies, find company-wide savings, and manage your SaaS more effectively.

An Expanded Solution for Managing Cloud-Based Applications Coming in 2019

ServiceNow is currently working on expanding IT Asset Management products to include more features to effectively manage SaaS licenses in addition to Office365 (available today) and Adobe Creative Cloud (available in London). ServiceNow recently acquired VendorHawk, a SaaS license management solution, who specialized in dealing with SaaS usage data for popular business applications. VendorHawk is being re-platformed into ServiceNow and is expected to be available in 2019.

Sources:

https://www.linkedin.com/pulse/your-software-audit-chances-higher-2018-heres-why-steven-russman/

https://www.cio.com/article/3024420/software/the-real-cost-of-unused-software-will-shock-you.html