Last month Amalgam Insights hosted, Key Vendors for Managing $40+ Billion in SaaS Costs. This webinar highlights industry findings around growing SaaS spend.
The company works with CIOs and CFOs to bridge gaps in managing technology. It focuses on the set of solutions targeting enterprise SaaS expense management, that, as they report, “... is largely unmanaged at this point.”
Webinar host and company founder Hyoun Park captured the reason for the webinar with this overview:
Currently less than 5% of of SaaS spend is centrally managed. The other 95% is hiding in expense reports and one-off accounts that escape corporate control. No rules, no bulk discounts, no disputes, no contract enforcement or negotiations.
We recommend that CIOs, CFOs, Chief Procurement Officers, Finance Directors and IT Procurement Directors listen to the archived audio. Below, we’ve captured Park’s relevant observations and outlined his recommendations for finance and IT leaders who want to better manage, optimize and extract value from SaaS investments.
Key SaaS Management Observations
- SaaS management is particularly challenging because the practice is about extracting value and needs to focus as much on adoption and utilization, which provide functional value.
- Cost optimization is appropriate, but should support adoption. This requires a business-centric view, not a cost-cutter perspective.
- Defining ROI on adoption and SaaS user productivity is the upcoming opportunity. Companies that do SaaS management effectively will be able to quantify business-enhancements that come from controls.
- SaaS’s ease of deployment is creating scenarios of multiple, duplicate tools and reducing the effectiveness of approved solutions. Companies are underestimating this reality.
- Dedicated SaaS cost optimization tools is a new field that will help find savings and value extraction. Park considers Cleanshelf to be a key vendor.
- $100,000 in annual SaaS spend is the inflection point where tracking vendors, licenses and spend becomes exceptionally difficult. Here, there are thousands of dollars in optimization opportunity available – even for small to medium sized startups.
- SaaS app category ontology, or the categorizing of applications based on their usage, department and use case is a powerful benefit. It is particularly useful for identifying overlap in project management or CRM solutions. Park calls out the need for early centralization here - and notes Cleanshelf’s leadership in this area.
SaaS Best Practice Recommendations
Park concluded his SaaS optimization review with best-practice recommendations for IT and finance leadership interested in leading SaaS optimization initiatives.
- Consider a standalone solution for SaaS management. Industry leading products are robust, easily deployed, affordable and generally boast enterprise IT-friendly features like SSO and 3rd party application integrations.
- Look at other IT spend management areas for inspiration. The BYO-device and mobility challenges of 5 to 10 years ago are similar. Learn from the past. There are opportunities for investment, but due diligence is vital. More specifically, leadership should focus on procurement, contract management, sourcing, inventory, process development and ongoing management.
- Start looking for solutions earlier than you think. Even as early as $10,000/month in SaaS spend. Employees will unwittingly make investments in tools, decide on their own solutions and deploy applications outside of existing enterprise contracts. IT and business leaders need to recognize their roles as stewards of technology environments and offer guidance.
- Break down spend. Getting even a cost-center breakdown is, surprisingly, an emerging capability. Only the early majority does this. Doing this puts you ahead of 80% of competitors.
- SaaS is an investment, not just a cost. Need to consider utilization with respect to value delivery and productivity. Optimization efforts are not only about reducing spend and licenses.
- Move from cost management to value management. Consider improvements with respect to productivity, performance and value. After all, those are the reasons for SaaS tool investment to begin with. If perspective is one of a “spend keeper”, IT and line-of-business leaders may be in opposition.
Park’s findings reinforce Cleanshelf’s belief that SaaS spend controls deliver a host of benefits, from productivity to security, and result in significant bottom line savings.
We are honored to be featured by Amalgam Insights as a leader in moving companies toward optimal, collaborative and value-added deployment of SaaS applications. If you're considering a standalone solution for SaaS management, connect with the Cleanshelf team here. We would be happy to schedule a full product demo for you.