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SaaS apps help businesses scale their growth and efficiency. However, for IT teams, managing all these cloud-based software and their vast data can be challenging. If the IT team fails to handle SaaS tool usage properly, it significantly leads to low ROI.
For instance, if an organization buys 300 licenses but only 140 are used while the rest remain unassigned, it's wasteful. Additionally, many people go days or months without using their assigned SaaS licenses, which leads to poor ROI.
Is there a better way to manage these SaaS solutions and not waste resources?
The best way to ensure organizations don't waste IT resources and get maximum value from SaaS apps is by using an advanced framework called SaaS optimization. This process helps you optimize your portfolio and save on spend.
Yet, amidst the increased SaaS adoption to meet diverse business needs, many CTOs overlook this critical aspect. Unoptimized SaaS usage leads to various inefficiencies in organizations, which include:
- Overspending on unused licenses, inflating operational costs, and causing budget overruns.
- Productivity loss through delays, confusion, and inadequate access to essential tools and data.
- Security vulnerabilities, risking unauthorized data access, and compliance breaches.
- Degraded system performance, slow response times, and service disruptions impact user satisfaction.
You can completely change how your organization handles IT resources and costs with proper SaaS optimization strategies.
To learn more about potential loopholes leading to unnecessary SaaS wastage within your organization and how to optimize SaaS portfolios and best practices, continue reading this article.
What is SaaS optimization?
SaaS optimization is the process of maximizing the value derived from SaaS apps while minimizing costs and inefficiencies. You need to strategically manage and streamline the usage of SaaS applications to ensure the effectiveness of this process.
It will help you ensure that SaaS resources align with business objectives and deliver optimal returns on investment.
This process involves tasks like keeping an eye on,
- How much the tools are used,
- Finding resources that aren't used much,
- Making licensing agreements better,
- Making things work faster and safer,
- Using the best ways to make work easier and more efficient.
Therefore, utilizing an advanced, all-in-one SaaS management tool is essential to ensuring a worry-free and efficient process. Such a tool can effectively tackle all the issues that may arise and hinder optimization efforts within your organization's SaaS ecosystem.
The costly consequence of neglecting SaaS optimization
Why is SaaS optimization important?
With SaaS optimization, you can help your organization save money and work smarter.
With this framework, you can do the following:
1. Cutting Costs
You must check if you've purchased extra licenses unnecessarily. SaaS optimization can help identify essential tools and eliminate unnecessary ones, leading to significant cost savings.
2. Boosting Efficiency
Don't let your SaaS tools become disorganized. With SaaS optimization, you can better organize your SaaS stack, enabling faster task completion and smoother collaboration among team members.
3. Keeping Data Safe
Ensure proper security measures are in place for all sensitive information stored in the cloud. By optimizing the SaaS environment, you can select the safest software options and adhere to rules and regulations.
4. Overcoming Challenges
Change can be difficult for you, especially when it involves switching software. However, with SaaS optimization, you can address these challenges and facilitate the adoption of new and improved ways of working.
Challenges of optimizing your SaaS stack
You must emphasize optimizing SaaS for the following benefits:
1. Technical Complexity
Your IT team might face difficulty managing multiple SaaS tools as each has features and interfaces. Also, different subscription models add to this complexity, making it important to pay close attention to ensure they are used efficiently and cost-effectively.
2. Operational Challenges
You might find it difficult to see how you use SaaS tools and where your money is going. This makes it hard to identify redundancies, underutilized licenses, or overlapping functionalities.
Without this insight, you might face challenges in making smart decisions about which SaaS tools to invest in or which ones to cut back on.
3. Security and Compliance Risks
When using many different SaaS vendors to handle sensitive information, keeping everything secure and meeting regulations can be tricky.
You must ensure your data is safe and take proactive measures for security maintenance and compliance with regulatory standards.
4. Resource Limitations
Limited resources, such as skilled personnel and specialized tools, make managing and optimizing the SaaS ecosystem difficult.
This constraint hampers the implementation of SaaS spend optimization strategies, which could result in less than optimal utilization of SaaS resources.
5. Resistance to Change
Resistance from employees or departments accustomed to specific SaaS tools or workflows can impede efforts to optimize the SaaS stack and streamline processes.
You can overcome this resistance by implementing effective change management strategies and fostering a culture of adaptability within the organization.
Key Strategies for Effective Optimization
1. Discovery and Visibility
Lack of visibility won't help you with SaaS optimization. You must identify and track all SaaS applications used within the organization. It helps gain visibility into the entire SaaS landscape, including usage patterns, associated costs, and potential security risks.
2. Usage Monitoring and Analysis
You can pinpoint SaaS optimization opportunities by monitoring and analyzing metrics like user activity, feature utilization, and peak usage times, such as consolidating subscriptions or negotiating better deals using actual usage data.
3. License Management and Optimization
Regularly reviewing SaaS usage metrics ensures you're paying for the right level of access. Strategies like adjusting subscription tiers and reallocating licenses based on usage patterns help optimize license management and leverage volume discounts.
4. Renegotiation and Consolidation
Renegotiating SaaS contracts and consolidating SaaS tools can save costs and streamline operations. Using usage data and market insights, you can negotiate better deals with vendors for discounts, extended contracts, or additional features.
5. Governance and Automation
You must set clear governance policies and automate workflows to maintain control and efficiency in SaaS usage. Establish procurement, and usage, and security guidelines to ensure compliance with organizational policies and regulatory requirements.
Automation tools help enforce policies, streamline tasks, and reduce errors in managing SaaS apps. Implementing a SaaS management tool for SaaS optimization boosts organizational productivity.
CloudEagle -The Comprehensive SaaS management platform
CloudEagle is an advanced SaaS management, procurement, and contract management platform. When you need to optimize your organization's SaaS stack, CloudEagle has to be your go-to solution.
With its advanced features and automated workflows, you can streamline and centralize your organization's SaaS management and do it more effectively and productively.
Complete SaaS Discovery: If a company doesn't keep track of all its software applications, things can become chaotic and unsafe.
Thus, to ensure your IT and finance teams optimize apps and spend, CloudEagle should be your go-to platform. The tool will help you find all your SaaS applications, ensuring complete SaaS application discovery.
CloudEagle provides over 300 integrations and browser extensions. It can integrate with your internal systems and applications through direct API connectors and provide a bird's eye view of your SaaS stack. Every detail about apps, spend, vendors, users, licenses, etc. will be displayed on a single dashboard.
You can monitor your employees' app usage by integrating the tool directly with your applications. With this capability, you can identify active and inactive users and gather insights such as login details and the number of premium licenses.
With this comprehensive visibility, you can make informed decisions regarding duplications and redundancies and take swift action when necessary.
SaaS cost optimization: CloudEagle monitors cloud expenses in real-time, allowing for proactive cost management. By pinpointing areas for optimization without interrupting operations, CloudEagle ensures you stay ahead of potential cost overruns.
With precise spending breakdowns across departments and accurate analysis of user activity, you can use CloudEagle to identify SaaS overutilization or underutilization. The tool can identify unused, duplicate, and redundant applications and consolidate or eliminate them to optimize your SaaS spending.
Eliminating Shadow IT: If you're worried about unauthorized spending and shadow IT, you can set up alerts to get notified about any new cloud applications being used in your systems. It helps tackle potential unauthorized SaaS purchases.
This proactive approach helps prevent budget overruns and automatically identifies duplicate applications, enabling optimization and rationalization of spending.
Assisted Buying: If your team doesn't have the time and bandwidth to do negotiations, you can use the assisted buying services.
CloudEagle's team of SaaS experts will thoroughly analyze your requirements, conduct extensive market research, and utilize pricing benchmarks to facilitate successful negotiations.
Whether you prefer to lead the negotiation process with their support or delegate it entirely to our experienced negotiators, you can rest assured that you'll benefit from years of negotiation expertise. We’ll ensure you secure the right products at the best possible prices.
Procurement Workflows for Efficiency: With CloudEagle, you don’t just get assisted buying service. The tool provides automated workflows, which you can use to streamline your SaaS procurement process.
Automatically assign tasks, notify stakeholders through Slack, Email, and in-app notifications, and ensure timely approvals using our procurement workflows.
Also, you will get access to "Slack for Procurement," a Slackbot that promotes collaboration and streamlines the entire procurement process. You can integrate Slack and an SMP, saving hours spent on email coordination.
With immediate team connectivity in Slack, communication accelerates, reducing coordination time by up to 25%. The Slackbot speeds up workflows, slashing turnaround times and improving SaaS procurement efficiency. The dedicated Slack channels speed up approvals by providing real-time updates, transforming weeks-long processes into mere minutes.
License management: CloudEagle's direct integrations will enable you to see purchased licenses for each application and their individual usage.
Instances of underutilization can impact your ROI. Fortunately, you can leverage CloudEagle's license reclamation workflows to deprovision users for low usage and harvest those licenses.
With CloudEagle's license harvesting workflows, you can ensure the number of licenses purchased is optimized and utilized properly.
User provisioning and deprovisioing: You can use CloudEagle's auto-provisioning workflows to automate user provisioning within your organization.
These workflows will help your IT team reduce reliance on time-consuming manual processes and save over 500 hours annually.
With 300+ integrations, you can create rules for provisioning, modifications, and deprovisioning, streamlining user lifecycle management. CloudEagle seamlessly integrates with your SSO and HRIS, consolidating all user data into a centralized location.
With this tool, you can optimize the SaaS access granting and revoking process. CloudEagle not only helps you provide SaaS access during employee onboarding, but also lets you create one-click deprovisioning workflows for revoking SaaS access from employees during offboarding.
Check out this testimonial where Remediant found CloudEagle very effective in the employee onboarding and offboarding processes.
Alice Park from Remediant spent most of her time manually visiting each application to provision and deprovision users. However, after integrating with their HRIS systems, CloudEagle organized all users in one location.
This integration allowed Alice Park to streamline provisioning and deprovisioning processes, ultimately saving her valuable time.
Conclusion
You should optimize your organization's SaaS usage to enhance operational efficiency, control SaaS costs, and mitigate security risks. When you address the SaaS optimization challenges and leverage key strategies, you can benefit the organization significantly.
Firstly, you must establish comprehensive SaaS discovery and visibility within your organization. With these processes, you can make smart decisions by better understanding your organization's SaaS stack.
By monitoring and analyzing usage patterns, you can spot inefficiencies, optimize SaaS subscriptions, adjust licenses accordingly, and negotiate improved deals with vendors using actual usage data.
Understanding how the software is used helps create a plan for license renewals. If usage is low, think about cutting down on licenses. On the contrary, if usage is high, you might need more licenses to keep up with demand.
To enhance your organization's SaaS optimization frameworks and promote more effective and secure SaaS management, we recommend scheduling a demo with CloudEagle.
