Categorised as Product

Why Investing in a SaaS Management Platform During Budget Cuts Makes Sense

By Hayley Salyer

Published on Mar 20, 2023

Organizations will always be on the lookout for opportunities to optimize their operating expenses. This year has proven no different with significant layoffs, restructurings and budget cuts.  

Even with shrinking budgets, organizations occasionally make fatal errors when they cut in the wrong areas. With a quick slash of the IT budget, your organization could run the risk of opening itself up to some serious vulnerabilities. So, what makes sense going forward? Costs have to be optimized, but how can you do that efficiently without negatively impacting your business? 
 
A SaaS management platform is a wise investment during these tenuous times and can continue to deliver cost savings well into the future. Here are a few solid arguments you can present to your executive team when rationalizing the cost of a SaaS management platform (SMP). 

A SMP will allow you to gain visibility into where your SaaS spend is being wasted and where it is put to good use.

Nearly 25% of SaaS spend is wasted on unused licenses.

SOURCE: Gartner®

Nearly all organizations overspend on SaaS and by a significant amount. It’s a no brainer to want to reduce wasted spend, but it is very hard to identify potential areas to save without a full view of your SaaS landscape. Manual discovery methods are not reliable and very difficult to scale across your organization.  
 
SaaS management platforms vary in the ways they discover SaaS applications, and those variances can affect the benefits they provide, but the right SaaS management platform will utilize the discovery methods listed below to provide a comprehensive view:

• Single sign-on (SSO) platforms 
• API connectors 
• Agents 
• Cloud access security brokers (CASB) 
• Browser extensions

You can use a combination of those discovery methods to bring clarity to your SaaS portfolio, so you can better rationalize, secure and govern SaaS usage. Visibility is the critical first step into gaining control over SaaS sprawl. 

After you’ve gained visibility across your SaaS landscape, a SMP can allow you to take a deeper dive into SaaS usage details.

With a new, sweeping view into your SaaS landscape through a SaaS management platform, you can get serious about the details. Another major advantage of using a SMP is that you can gain granular insights into how a SaaS app is being used at your organization. If you’ve previously been relying on financial records to discover SaaS applications, you know you can’t see any real details about how a user is interacting with specific tools you’re paying for. 

A SMP provides you with software usage data. A software metering tool can monitor how long an application was in use, how often users logged into apps and the details on which features were utilized. This provides cost savings insights well beyond understanding licenses paid for versus licenses allocated. 

Armed with SaaS usage details, a SMP can enable you to optimize your costs, and rationalize your SaaS portfolio.

With SaaS usage data, you can compare purchase and entitlement data to identify areas of overspend and ensure your organization runs with just the right amount of technology. This information is especially valuable during license renewals, since organizations are able to rely on actual usage information as opposed to just re-upping for the same volume as the last contract. A SaaS management platform will make it easy to discover unused licenses.  

You’ll also be able to optimize the license types for each of the applications you keep. Many SaaS companies offer multiple, and sometimes complicated, tiers of software licenses. Armed with detailed usage metering data from a SMP, you can choose which package would best suit the users and teams in your organization. 

A SMP will also enable you to rationalize your SaaS portfolio, meaning eliminate redundancies. Applications for video conferencing, file storage, project management, and team communications are common sources of SaaS redundancies. A SMP’s normalization process can allow you to highlight redundancies by tagging applications during the discovery process with an application type.  
 
For example, you could then quickly identify you have four different project management applications throughout your organization, and a significant portion of those licenses are going to waste. It may be more cost efficient to sanction one project management tool for the whole organization under a larger license tier rather than paying for four separate platforms. 

A SMP will allow you to secure, monitor, and closely govern your SaaS landscape to prevent costly security breaches.

In addition to optimizing costs and eliminating redundancies, a SaaS management platform can go a long way to keeping your organization secure and in compliance. Snow surveyed 1,000 IT leaders and found the top concern with SaaS management is security. Most organizations have hundreds and sometimes thousands of SaaS apps, many of which are unknown to IT. 

The main challenge with security for SaaS applications is the ease with which anyone can sign up for a SaaS application, use any credentials they decide, and upload any company data. Each SaaS tool comes with many settings to configure. These configurations control everything from data protection to encryption to admin privileges and more. It only takes one misconfiguration by one user to open your entire organization up to a major, costly cybersecurity attack. 

In addition to all the benefits listed above of a SMP, you can’t afford not to invest in a SMP when it comes to the added value of security.  

Investing in a SaaS management platform

SaaS is usually in the top three highest operating expenses for organizations. Even if you’re sold on the benefits of utilizing a SaaS management tool, you’ll have to convince your organization’s decision-makers. CFOs will want to see how the investment will pay off immediately, as well as into the future. CIOs will like to see the data around how SaaS apps are being used.  

A SMP can help you discover cost savings, or how much you can save immediately, by eliminating SaaS app redundancies, identifying unused SaaS licenses, and optimizing costs. 

A SMP will also help you with cost avoidance, or how much you can save on future costs, by better preparing your organization for SaaS renewals and negotiations, securing your SaaS environment to prevent costly security issues, and preventing SaaS sprawl. 

By implementing a SMP now, even during budget cuts, organizations can realize quick savings as well as continue receiving a return on their investment well into the future.  

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