In 80% of companies, SaaS is managed by four or more departments, according to a recent survey conducted by LeanIX. Further complicating matters, 68% of companies use more than one tool (Excel usually one of them) to track SaaS in the enterprise. If you want to optimize SaaS usage, reduce SaaS spend, or simply manage your SaaS portfolio, this is not the best way to do it.
To give you an idea of what can go wrong when multiple teams try to manage SaaS with multiple tools, consider the story of Degreed. A maker of a popular upskilling service, Degreed’s departments and IT teams used multiple tools to manage SaaS spend, usage, and risk. For example, their InfoSec team tracked SaaS licenses with Google Sheets while Finance team used services like Abacus and Bill.com.
“Our software count was somewhere in the hundreds,” said Zac Makin, the former VP of FP&A at Degreed, “but we didn’t have enough visibility to actually manage it.”
In other words, even though they were tracking SaaS with different tools, they didn’t have a single source of truth. So, they weren’t really tracking it.
SaaS adoption quickly outpaced Degreed’s ability to manage it. This undermined security, compliance, and cost control efforts. To get ahead of the problem, the company had to first answer a fundamental question about SaaS management: Was it a corporate spend initiative? An IT management issue? All about procurement? The answer was unclear.
To resolve things, Degreed formed a cross-departmental software approval committee, anchored by the shared use of a dedicated SaaS management tool. Every SaaS application is now reviewed and signed-off on in the tool by key teams before a renewal takes place, and prior to any software purchase, owners submit a business case for approval.
Degreed solved their problem by creating a single committee of stakeholders. As our survey found, however, Degreed is in the minority. Indeed, relatively few companies have found a way to standardize and centralize SaaS management. Given the accelerating pace of SaaS adoption (another of our findings), the situation has got to change.
At LeanIX, we believe standardizing SaaS management starts with consolidating SaaS data (contracts, usage, spend, etc.) in a single source of truth, particularly one fueled by automated data collection and SaaS discovery. The key here is finding a tool that can integrate with all possible sources of SaaS purchasing information.
If implemented and used correctly, a solution like this can foster and support consistent, cross-departmental approaches to every aspect of SaaS management:
- SaaS discovery – by integrating with critical enterprise systems as well as everyday SaaS applications, users can monitor large, dynamic SaaS portfolios.
- SaaS usage and rationalization – by linking application usage and spend to teams and departments, organizations can make timely and informed decisions on SaaS renewals, upgrades, consolidations, and sunsetting.
- SaaS risk assessment – by determining application ownership, user access to services and data, and vendor compliance with internal policies and regulations, organization can ensure compliance and mitigate risks.
