How to Select the Best SaaS Management Platform in 2023?

It's 2023, and an organization uses 130 SaaS applications on average for internal communications, collaboration, and business operations.

Considering the growth of remote work culture and the ease of SaaS availability, the number of apps and their respective spending will only get higher. Flexera reports that SaaS applications take up 19% of the overall spending by a company, with an average of $2,623 per employee.

Businesses quickly migrated from traditional applications to SaaS without an effective SaaS management plan. This led to a rapid rise in spending and a loss of control of their SaaS stack.

Lack of app visibility, underused licenses, poor vendor management, etc. are some of the significant SaaS-related concerns for IT, Finance, and Procurement teams within an organization. But they have already found a solution for it, a SaaS management tool.

An SMP can help the teams optimize their SaaS and streamline their spending, but with 100s of tools in the market, choosing the right SaaS application management tool can be hard.

That’s why we created this article to give you a heads-up on what to look for and how to select the best SaaS management platform for your business. Along with it, we’ve also compiled a list of SaaS management tools that can save your time and research.

Let’s start!

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The growth of SaaS

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Being aware of the SaaS industry’s growth forecast can help enhance your management and keep you mindful while procuring cloud tools.

Spending on SaaS tools has skyrocketed in a short period of time.

Why?

A decade ago, businesses were using legacy on-site software to handle various business operations; these tools were cumbersome, had poor flexibility, and required considerable effort to manage.

But SaaS applications broke the dogma; they proved that enterprise applications don’t have to be complex to handle and that these apps can handle the scrutiny of large enterprises.

When asked, what makes SaaS apps unique, these are the four common answers that users give,

• SaaS apps are customizable
• SaaS apps are reliable
• SaaS apps are flexible
• SaaS apps are affordable

These applications are subscription based, either quarterly, half-yearly or annual, depending on the requirements. The plans can be customized to fit your needs, making them highly affordable.

Security compliance is necessary as they are cloud-based solutions, making them more reliable for keeping the data secure. And the best thing about SaaS applications is that they can integrate with multiple platforms. This flexibility is why businesses have started using more SaaS applications, leading to excess SaaS spend.

Customizability, reliability, flexibility, and affordability are the four pillars that led to the rapid growth of SaaS. And unfortunately, it has become a burden for companies.

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Pain Points of Managing SaaS Apps

As they are easy to purchase, anybody in an organization with a credit card can buy a SaaS app; this leads to decentralized buying or "Shadow IT."

99% of the time, the finance and procurement teams will have no idea that shadow IT is happening.

Before you know it, the company has several hundred apps, some with low or no active usage and often overlapping functionality.

Decentralized purchasing, combined with traditional and non-scalable methods of tracking SaaS apps, such as Excel spreadsheets, has created several challenges for IT teams. Some of these difficulties are as follows:

1. Incomplete and Outdated Information About Vendors and Spend

Usually, an IT manager will ask the department heads which apps are bought and used by each department. By the time they fill out the sheet, the app usage details and other information will be outdated.

The Excel sheet will have the spend and vendor details, but license count and usage data will be outdated. Tracking accurate app usage details and attributing them to the users.

2. Zero application visibility in a Company

One of the significant SaaS challenges is identifying whether the tools are appropriately utilized or if two or more tools have the same functionality.

For example, the procurement team would’ve purchased Mailchimp to send emails. Unknowingly, someone in the engineering team would have purchased Omnisend without informing the procurement team. Now the company will have two apps that serve the same purposes.  

The finance team will end up paying for both apps as they will have zero visibility into the apps being used and knowledge of the applications' functionality.

This is what a SaaS application management tool can fix; it’ll give 100% visibility into the SaaS stack and help the teams identify underused and duplicate apps.

3. No Central Repository for Contracts and Invoices

Since there is no central place to store the contracts and invoices, vendor contracts and invoices will get lost in an employee’s emails, hard disks, or other folders.

And when the employee quits, all the data will be lost forever, which can be detrimental to the organization as vendor contracts necessitate SLAs and other compliance agreements. Losing them might lead to a loss of investment.

A company uses 130+ SaaS apps on average, so it is necessary to have a centralized storage system for effective contract management.

4. Unaware of Changes at the Vendors in Your Current Portfolio

When purchasing an app, buyers typically conduct extensive research and due diligence. But SaaS providers often make changes to their products. It is reported that vendors will increase their pricing plans by 10% every year.

Not only will vendors change their pricing plans on a regular basis, but they will also change their compliance, security guidelines, support, and so on, making it difficult for the team to keep up with these changes without using SaaS management software. ‍

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What is a SaaS management platform?

“It is a platform that helps enterprises monitor the purchase, usage, renewals, and discovery of all the software-as-a-service (SaaS) applications in a company.”

Let’s see what the expert definition is,

Gartner released a report in 2021 called the "Market Guide for SaaS Management Platforms", in which they describe SMPs as stand-alone tools that offer centralized management and security of multiple SaaS applications from a single admin dashboard, delivered as a complete service.

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Wow! A single pane of glass view to monitor the buying and usage of all SaaS applications sounds cool and useful; then, how do companies manage SaaS applications today?

They do it mostly with spreadsheets; manual SaaS application management is no longer feasible, hence the need for SaaS management software grew.

But are SMPs future-proof, or will it just be another hyped trend?

Gartner reports, "By 2026, 50% of organizations using multiple SaaS applications will centralize management and usage metrics of these apps using an SMP tool, an increase from less than 20% in 2021.”

This proves that SMPs are future-proofed, and next, we’ll show you when you need IT and how to select the right SMP.

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When should an organization consider using a SaaS management system?

‍A company uses hundreds of SaaS applications on average, and managing them manually is time-consuming and not scalable in the long run.

Initially, when your stack is smaller, like 20 applications, your teams can control them manually, but as you use more, you’d need software for managing your SaaS stack.

Not just the number of applications, here are some more factors that necessitate using a management system,

• SaaS spending is beyond control.
• IT teams don’t have 100% visibility on SaaS stack.
• Software intake requests are getting lost in the clutter.
• SaaS contracts are hard to find, even after scrolling through 100s of emails.
• Teams are spending too much time in negotiation with the vendors.
• Unverified spending and shadow IT has skyrocketed.

These are the possible indicators to look for, but it is recommended that you choose an SMP before you start experiencing these red flags.

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Factors to consider while choosing a SaaS management software

There are several tools available today to manage SaaS apps. Some of them focus on security, some on application visibility, procurement, vendor management, workflow, etc. Here’s a simple checklist to help you select the right tool:

1. Automatic Discovery of New Vendors and Spend

Application discovery should be the table stakes for an ideal SaaS application management tool. It must be able to automatically discover all the applications and vendors used in your company. Not only should it discover, but it should also categorize the apps and vendors automatically in their appropriate software categories.

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This will be possible only if the tool integrates with your Single Sign-On (SSO) systems like Okta, Google Workspace, OneLogin, 0Auth, your financial systems like Expensify, Oracle NetSuite, Intuit QuickBooks, etc, along with HRIS systems and direct integrations.

With the combined knowledge from the systems, SMPs can identify the usage and spending on different SaaS applications used in their company.

2. Centralized contract inventory

Handling 100+ contracts and invoices is a messy and unproductive task. Imagine wasted spending due to missing out on crucial contract information like the contract renewal date, billing frequency, or auto-renewals.

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SMPs should be able to extract all the contract metadata, so you can figure out which vendors are on auto-renewal and what the payment terms are – all on a single dashboard, making it easy to negotiate proactively and smartly with your SaaS vendors.

SaaS management software should bring together all contracts and invoices in one place for easy access. You no longer have to try to delete contracts and invoices from employee mailboxes or shared folders.

Use a single platform to view invoices and contracts, manage updates, and view billing trends. With effective contract management, you can unlock useful insights that lead to smarter vendor negotiations.

Here's how Aira centralized their SaaS contracts.

3. SaaS Security

IT managers need a dedicated tool to manage, track, and enhance the security of SaaS applications and control their employees' access. As an SMP can identify all the applications in your company, it should provide you with updates on any security vulnerabilities discovered with any of the apps in use.

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IT managers must be aware of any security flaws or non-conformities in all company applications. It must be able to automatically provision or de-provision users for the apps when an employee joins or quits.

An ex-employee with user credentials can make the entire SaaS portfolio vulnerable, so choose SaaS management software to keep your system secure from security threats.

4. Procurement workflows for a streamlined process

Things have changed since the first edition of SMPs rolled out, which had basic application discovery and contract management features. It is 2023; now, you must look for a tool to streamline your procurement process.

Procurement teams go through hardships in collecting requirements from the team, getting them approved by the right stakeholders, and then submitting the RFP to vendors. All these manual processes are just a waste of valuable time and energy.

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So, choose a SaaS management tool that doubles as procurement software;  only some platforms offer these functionalities together. Why use two tools when one does the work for you?

Automate your procurement with customized workflows and focus on more strategic business tasks.

5. Expert negotiators/Assisted buying

The key to reducing SaaS costs starts with vendor negotiations. SaaS providers have gone smarter; it's time you reinvent your negotiation skills.

Look for a software management tool that provides negotiation services; these experts can take over and negotiate with your vendors on your behalf and secure the best deals.

Assisted buyers will perform detailed vendor research based on your requirements and compile the top five SaaS applications for you to select.

Some tools offer accurate price benchmarking data; this data will help you compare competitive prices and empower your negotiators during the procurement process.

Why go through the hardships of research and vendor negotiations? Let the experts do the heavy lifting for you so you can effortlessly run your core business.

6. Vendor research

Yes, searching for vendors can be challenging, especially when your procurement teams have more strategic tasks.

Choose an AI-powered vendor recommendation platform that suggests software vendors based on your requirements. Some tools can provide detailed analysis of SaaS vendors, including their existing users and relevant reviews.

Your teams don’t have to surf through Gartner and Capterra to read reviews; these tools will display relevant reviews of the product, so your team can make informed decisions.

7. SaaS spend optimization

How will you optimize SaaS spending if you don’t know how much your teams are utilizing the apps or where waste is occurring?

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You should be able to easily identify underused apps, licenses, duplicate applications, and hidden apps within your organization.

Once you identify them, you can quickly eliminate redundancies and keep your tech stack optimized.

8. Usage Tracking and Analytics

This is necessary for any platform, and most SMPs offer detailed tracking and insights into campaigns and workflow analytics.

Only with real-time reports will you be able to gauge the success of your campaigns, so never choose a SaaS software management platform that doesn’t offer real-time reports and analytics.

9. Onboarding and support

Not everything can be done on your own; you need a walkthrough of how to get started, or you run into an issue needing expert help, so you’ll need assistance from the product team.

Ensure that you choose a platform that provides priority support and expert onboarding to help you get started.

10. Affordable pricing

It's pointless to spend a lot of money if you're not going to use many of the features. Look for platforms with transparent and customizable pricing plans.

Negotiate with the providers, pay only for what you use, and scale your plan as you go.

There you go: these are the crucial factors to consider when selecting a SaaS management system.

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CloudEagle - The best SaaS management platform

Selecting a software for SaaS management doesn’t need to be hard; we showed you the factors to look for, and now we’re revealing the platform inclusive of all necessary management features.

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CloudEagle meets all of the above criteria and more. We understand the hassles involved in finding and managing tools at your company, and that’s why we built this intuitive solution to simplify SaaS management.

While most SaaS management platforms provide a view of your existing SSO and finance systems in their platform, CloudEagle acts as an intelligent system that can advise you on more than just when your SaaS contract is up for renewal or if security vulnerabilities have been discovered.

At CloudEagle, we firmly believe that if you make an informed buying decision upfront, you will save time and money by avoiding the change management process later.

Here’s a quick rundown of the features,

• Application discovery - Get 100% visibility into your SaaS stack with SSO, finance system integrations, and browser extensions.
• Procurement workflow - Streamline your SaaS buying process with automated workflows and customizable intake forms and get 100% transparency on the process.
• Contract management - Store all your SaaS contracts and invoices in one centralized location.
• Cost optimization - identify underused, duplicate, and hidden apps, optimize them and save money.
• Assisted buying - Let our experts negotiate on your behalf and secure the best deals while your team can focus on more strategic business tasks.
• Vendor research - AI-powered recommendation engine to help you find the right vendor.
• Onboarding & Offboarding - Assign and revoke access to users in a single click when they join or quit.
• Support - Get expert onboarding, priority support, and buying assistance all the time.

Want to simplify your SaaS management?

Top SaaS management platforms

‍It is always a good practice to be mindful of other platforms in the market too, notable mentions are,

• Vendr
• Zylo
• Spendflo
• Productiv
• Sastrify
• Zluri
• NachoNacho
• Torii
• LeanIX
• CloudFX

Click here to learn more about these platforms.

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Conclusion

There you have it, a quick guide on how to choose the best SaaS management platform for your business in 2023.

After hours of interaction with business owners, we got this list of what they look for in a platform designed to manage SaaS apps. Use this SaaS management checklist to choose the right platform to manage and optimize your SaaS stack.

Application discovery, procurement workflows, cost optimization, and vendor negotiations are the crucial functionalities to look for in a SaaS management solution. Be mindful of the pricing and support before you make the decision.

Good luck!

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Frequently asked questions

1. What are the SaaS management best practices?

The best practice is to use a SaaS management tool, as handling all the applications manually can be cumbersome. Also, while choosing a SaaS management solution, remember to select a comprehensive tool that offers SaaS management, procurement, and vendor management solutions.

2. What are the SaaS selection criteria?

While selecting a SaaS application, the first thing to consider is the number of users in the application and the relevant reviews. User interface, pricing, support, and features are the other factors that you must be aware of while choosing SaaS applications.

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