Companies today are incredibly reliant on cloud applications (SaaS). These tools enable us to do meaningful work, at high speeds, in a globally distributed workplace. However, for all their promise and opportunity, cloud apps also present new and growing challenges for budgets, security and overall efficiency.
It all stems from a lack of control and insight. Simply put, you can’t govern, secure and optimize what you can’t see. And much of what’s happening in the SaaS tech stack is hidden.
Why? Because many (if not most) cloud applications are acquired by end-users, without the knowledge of IT or procurement teams. These end-users are searching for the best tools to accomplish their job. But for the most part, they’re not sensitive to the downstream impacts on IT, procurement, security and finance.
The Scary Truth of Distributed App Adoption
Ownership and data associated with cloud apps are distributed across the company—but most organizations are either not aware, not accepting of, or not adapting to this reality. We see this illustrated in recent studies. In its Market Guide for SaaS Management Platforms, Gartner states, “SaaS spending continues to grow by 15-20% annually, as organizations maintain an average of over 125 different SaaS applications totaling $1,040 per employee annually. IT typically is aware of only a third of those due to decentralized ownership and sourcing.”
And they don’t see this threat alleviating on its own. Gartner predicts that organizations that fail to centrally manage their SaaS life cycles will be “five times more susceptible to a cyber incident or data loss” and will “overspend on SaaS by at least 25%.”
This sounds stark, but there is hope. It starts with a new perspective on how to manage SaaS.
A New Approach to SaaS Management
The traditional approach to software management – where IT has centralized command and control – is simply not possible anymore. There are too many apps, too many owners, and too many ongoing changes to users and licenses. Instead, management must empower key stakeholders – IT, app owners, procurement, security and finance teams – to contribute their voices and efforts to managing SaaS.
This does not mean IT is removed from leadership; rather their work becomes more strategic.
IT is no longer the sole bearer of SaaS responsibility, but they still lead the charge. Their orchestration skills, familiarity with automation, and insight into technology place them at the nexus of Distributed SaaS Management. The difference is, IT no longer executes this strategic vision alone – they enlist the aid of other stakeholders.
Not only does this share the workload and make effective SaaS management possible, but it also scales the company’s ability to address security and budget concerns head-on without fear of limited bandwidth. The result is a more flexible, responsive, and mutually invested SaaS management approach that doesn’t burden any single person or group with all the work or all the accountability for things they don’t control. Instead, departments and app owners become teammates in their shared goals, and IT’s role is akin to the coach.
4 Phases of Distributed SaaS Management
There are four crucial phases of modern Distributed SaaS Management:
- Comprehensive discovery
- Strategic decisions
- Collaboration through automation
- Cost optimization
At each phase, the picture of SaaS becomes more clear. Phase one, discovery, is about uncovering which tools exist within your SaaS portfolio and pulling together relevant data about contract terms, ownership, utilization rates, and more. The second phase focuses on making strategic decisions based on newfound, data-driven insights. Phase three is about enabling everyone – especially the app owners – to help in the effort of SaaS management. Notably, phase three becomes much more effective if critical bottlenecks are automated. For example, task delegation via manual emails or isolated ticket systems adds friction and can hamper a collaborative effort. By trying to automate these processes, overall cross-team workflows become more efficient and sustainable. Things like offboarding former employees from apps happens automatically with information from HR systems feeding directly into SaaS management systems and triggering offboarding workflows.
Finally, the fourth phase of Distributed SaaS Management is about the impact of SaaS Spending. Today, more than ever, companies are focused on reducing technology costs – but doing so in ways that don’t negatively impact productivity and results. To do this, they must uncover the true cost and value of their applications. But without the right data, insights are hard to find. And, to make matters worse, research shows that collaboration between IT and Finance and Procurement departments has some of the lowest rates in a company. When we surveyed 300 IT pros, only 14% reported collaborating “often.”
Distributed SaaS Management offers a solution for better cost optimization. By following the four phases, SaaS spend becomes another set of data points ready for action. Finance can ask questions, IT can provide centralized insights (through their discovery of applications and the usage and cost data associated with them), and application owners can take actions across their various apps to eliminate wasted spend on idle or unassigned licenses, and eliminate apps that have redundant functionality. With time, this process becomes systemic, with app owners conducting license utilization reviews on a regular basis.
Similarly, Procurement has a single source for their contract data. This will reduce or eliminate surprise renewals and break the cycle of sprinting from one renewal negotiation to another without the proper insights.
As SaaS adoption continues to grow, so will the risk of cybersecurity threats, spiraling spend, and general inefficiencies – unless IT can change course. With a Distributed SaaS Management strategy designed for today’s scattered app reality, course correction becomes much easier, collaboration is streamlined, and goals around productivity, SaaS savings, security and innovation are much easier to achieve.
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