Three strategies for Maximizing SaaS Spend

Cloud & Services Home IT Asset Management Management

by | August 9, 2021

With minimal oversight from an IT team, SaaS has enabled team leaders to choose and purchase the technologies that their employees require (or in some cases, with no IT involvement at all). Clearly, that method is working—the growth of SaaS has been phenomenal, and there are no signs of it slowing down.

IT asset managers are subjected to a variety of fiscal constraints. The pandemic, its economic impact, suppliers, competitors, employees, shareholders, government regulations, and other factors all contribute to the need for comprehensive IT asset management (ITAM) initiatives.

Despite the fact that keeping costs from spiraling out of control is a major priority, there is still one big issue: waste. According to a 2021 report by Flexera, “2021 State of the cloud report”, more than 30% of the cloud expenditure spent on software-as-a-service (SaaS) in 2020 was wasted.

The good news is that the payback for companies willing to embrace SaaS asset management initiatives can be substantial. SaaS management is an essential element of Technology value optimization (TVO), which gives visibility into an organization’s whole IT asset estate. TVO breaks down barriers between cloud environments, physical devices, on-premise data centers, and virtual machines. As part of TVO, SaaS management can give clear data on assets, assisting in the rightsizing of software licenses and spending while managing risk and compliance.

Identifying the low-hanging fruit provides the best opportunities for SaaS spend optimization. Here are a few guidelines for organizations that can help them decrease SaaS spending.

Set organizational goals for the use of SaaS subscriptions

Set specific goals for the rate at which SaaS is being used. Industry analysts estimate that effective usage of SaaS licenses is possible, although many businesses fail to operate at its utmost capacity. The disparity between actual and targeted license usage can result in millions of dollars being squandered.

The gap is also an attack surface that needs to be addressed by the organization. They can look at renewals as opportunities to optimize license position with SaaS providers to find rapid ROI, regardless of the length of the license agreement.

Businesses can begin by identifying which publishers have upcoming compelling events with which businesses. If a vendor’s contract is up for renewal in 30/60/90 days, use it as a starting point. Determine where the company spends the most money; in most cases, the contracts with the highest spend also have the most room for improvement.

Investigate unlawful expenditures and citizen IT

Businesses can detect unauthorized programs, who owns them, the associated expense, and total expenses if they start digging deep into their links with their financial management or purchasing systems. A strong SaaS on-boarding governance program, which sets protocols around the technology used by the company, can also help.

By establishing guardrails for SaaS usage, the company can avoid wasting money on applications that do the same tasks. Since illegal access can jeopardize an organization’s security and intellectual property (IP), rapid action to eliminate it can benefit both security and the environment.

To free up expensive licenses, look at granular activities

It is crucial to optimize investments so that, based on what’s available in each supplier’s catalogue, each user receives customized functionality for their unique demands, at the best price. Businesses can begin by identifying entitlements, then users who are active and those who are inactive. This process helps them reclaim and reuse accounts that are no longer in use.

The method of asset review allows for entitlement minimization or the harvesting of underutilized licenses for transfer to another user. If an employee isn’t using all of the features included in a subscription, they can be demoted to a lower-cost plan.


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