By some estimates, the average medium-sized company (100-250 employees) uses somewhere around 150 unique SaaS applications. A Fortune 500 company can use 2-4 times that amount (and even more, if we count non-unique purchases). Managing those applications and their licenses is not a task that can successfully be done manually.
While there are many SaaS management tools on the market, they are not all created equally. They tend to differ in terms of what exactly they monitor, and what they control. Anyone looking to purchase such a tool should think carefully about what they hope to accomplish, and what features they need—and then be ready to ask some tough questions during the sales process.
We want to help with that.
Context: Why Does SaaS Need to be Managed?
SaaS applications are easy to procure, require little (if anything) in terms of installation and distribution, and update themselves regularly. While these features make SaaS subscriptions very convenient, it is that very agility and convenience that can lead to problems, especially for organizations that are using dozens or hundreds of applications. Some of the problems include:
- Unused licenses or “shelfware.” Industry experts have projected that up to 30% of SaaS purchases are never used. Companies end up paying for unused licenses and underused software, which bloat the overall IT budget.
- Shadow IT. The ease and agility with which SaaS can be procured means that a buyer—a department head, say—can bypass the traditional checks and balances that are in place to ensure a product complies with organizational policies.
- Difficult cancellations. Many SaaS companies, unfortunately, use “dark pattern” methods to make it difficult to cancel their service. This leads to even more shelfware and bloat.
- Security and compliance issues. Third-party software is one of the top causes of data leakage and is often a neglected soft spot in a company’s cybersecurity measures.
While the idea of tracking and managing software (Software Asset Management, or “SAM”) is not new, it has become clear that, with the explosion of SaaS, IT spend on SaaS cannot be managed with traditional practices and old-style management tools.
So, if you are in the market for a SaaS management tool, what do you need to look for? Here are the items we feel should be at the top of the list (and that we have worked hard to incorporate into our own products).
1. SaaS System of Record
Good management starts, of course, with visibility. Tracking SaaS apps throughout the organization is a must. SaaS management tools should offer a complete record of all SaaS applications, licenses, vendors, users, and compliance data. If a tool does not track all of these things, you might end up cobbling together several tools to get the visibility you need…which is ironic at best, self-defeating at worst.
2. Application Discovery
Getting a handle on SaaS spend— and more importantly, fighting Shadow IT—requires full visibility into not only the applications you are aware of, but all applications used in the organization. This kind of “holistic app discovery” should clarify what apps are present, who is providing them, and where to find more information (for example, licensing tiers and cancellation policies).
3. Usage Tracking
Knowing what your organization has purchased is one thing; seeing if and how it is used is more. At a minimum, a management tool should track log-ins and give you a rough idea of the users that actually utilize a given piece of software. Really great software will track features at an even more granular level, allowing you to decide whether to downgrade to save money or switch applications entirely.
4. Insights into SaaS Renewals
Recurring expenses compound quickly. A good SaaS management tool should give you an overview of your spend, including upcoming renewals. That way, you can cancel or downgrade any software that is not being used and do so before the expense hits your account again.
5. Easy Cancellation/Downgrade
While some SaaS companies make cancelling or downgrading their service easy, many others do not—on the contrary, they will use dark patterns to try to prevent customer churn. Having a SaaS management tool, on the other hand, should make it simple to identify unused software and easy to cancel or downgrade those unused licenses. Otherwise, managers are left trying to navigate each product’s idiosyncratic cancellation process on their own.
6. Easy Payments
On the other side of the coin from cancellations are payments. What happens when your software is ready to renew? What happens when you are ready to upgrade? Which card will it be put on, and who is tracking that expense? Having the ability to make payments from within your SaaS management tool can save a lot of time and make reporting that much more seamless.
Invoicing and reporting should be equally easy. Having hundreds of tools can also mean hundreds of invoices coming to the administrator’s inbox. Reconciling these invoices with card statements, and with the accounting system, is a nightmare in itself. Many tools send multiple invoices including prorated charges, refunds, adjustments.A good SaaS management tool should give admins a way to tame all that complexity.
7. Top-Shelf Security
Last, but certainly not least, is security. First, the tool itself will need to have maximum security; for example, it should undergo regular penetration tests, compliance checks, and certifications. Data should be shared with consent, and stored in a compliant environment (and even then, only when necessary). Second, the tool should help with security issues potentially caused by SaaS. For example, it should allow IT to identify and offboard “zombie users” and cancel licenses for non-compliant software.
Making the Choice of SaaS Management Tools
There are several SaaS management tools on the market. CIOs, CTOs, and CFOs considering those tools would do well to consider what problems they are trying to solve, and what features will help them to get control over their SaaS spending. Each tool on the market has its own areas of strength—though they are not all equal.
When we built the Quolum SaaS management tool and the Quolum SaaS card, we identified the attributes of a SaaS management tool that were most vital and worked to include those from the beginning. To hear more about how Quolum can help you manage your SaaS consumption better, reach out to us at firstname.lastname@example.org.