SaaS Management

  • 6 min read

How to Optimize Your SaaS Spend

Sethu Meenakshisundaram

21st July, 2022

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In the last few years, the remote work culture has increased the usage of SaaS apps. This has raised the concern for IT teams to optimize their SaaS spending.

The more SaaS apps are used, the more difficult it becomes for IT departments to manage them. This is due to the limited visibility into the company's SaaS ecosystem and no ownership.

As a result, we see issues like apps with overlapping functionality and automatic renewals of unused or under-utilized licenses.

Therefore, organizations end up paying extra for the tools with the same use case or continue to pay for the solutions that are no longer needed.

This post will discuss the five ways to optimize your SaaS spending.

5 Best Ways to Optimize Your SaaS Spend 

SaaS spend optimization is a SaaS management process to reduce the number of SaaS apps or licenses and to rightsize licenses in your organization.

1. Eliminate Duplicate Apps

Employees or teams purchase apps independently, leading to an increase in duplicate apps with the same use case or functionality. You end up paying extra for the apps with the same or similar functionalities.

You also lose on the discounts you could have negotiated as a bulk purchaser. It is more evident in companies that do not track their SaaS apps.

Adding to another situation, an individual can purchase only the basic price model of Asana (project management tool); but if the purchase was made with the business plan, collectively for all the employees using project management tools, one could have availed the extra features like advance workflows and reporting.

In the above case, you could have negotiated better as a bulk purchaser, and the expenses would have been reduced with extra features available with the business model.

Duplicate apps are the result of different teams or employees purchasing SaaS apps on their own. Therefore, eliminating duplicate apps will help you to reduce SaaS wastage in the organization.

Zluri helps you to gain visibility to the SaaS landscape of your organization. It helps the IT teams to identify duplicate apps, eliminate them and reduce your SaaS spending.

Zluri has the largest app library in the world, with a presence of over 225,000 SaaS apps. It uses five discovery methods to find 100% of SaaS apps accurately in your organization. It includes the following:

• SSO or Single Sign-On: Zluri connects with your SSO and ID providers such as Google Workspace, Okta, Azure Active Directory, etc. It traces the app users, their departments, hierarchy, and type of applications.

• Finance and Expense Management: Zluri gets hold of the apps missed in SSO and IDP levels. To collect further applications, we connect with your expense and finance management systems such as Quickbooks, Netsuite, Zoho books, etc. It finds the apps purchased by the employees either with the corporate card or their personal card.

• Direct Integration through APIs: Zluri can obtain the information directly from apps, connecting directly with 600+ SaaS apps to get app-level usage insights. Each integration with apps takes 2 mins to join and is a one-time setup during the onboarding process. The connection happens at the admin level.

• Desktop Agents (optional):With desktop agents, we collect the number of apps installed on a device, device-level information like product ID, hardware information, etc., app sign-in and sign-out details, and all the apps running in the background.

• Browser Extensions (optional): Browser extensions run locally in the organization to read browser activities and report them to Zluri's server for analysis. You can find SaaS apps in Chrome, Firefox, Microsoft Edge, and Safari extensions.

Application module

Apps with Overlapping Functionality 

2. Rightsize your Unused Licenses

Large companies purchase licenses for SaaS apps like Trello, Asana, Salesforce, etc., in bulk quantities. These licenses are purchased based on the forecasted demand. This allows the companies to save money at the time of purchase. 

For example, during the purchase process, the company decided to purchase 2250 licenses for Asana based on the forecasted demand for the current financial year.

On the other hand, only 1950 employees working throughout the year have used Asana. In that case, 300 licenses remain unused.

When the amount is calculated monthly, the cost might seem to be a smaller amount. But when you add up the total yearly loss, it will be a massive amount on the whole.

Zluri finds out the number of licenses that are left unused and unattended. So you can easily discard those and purchase new licenses when there is a need. We assist you in rightsizing your valuable licenses and prevent you from wasting large sums of money.

Unassigned licenses

3. Be Proactive with your Auto Renewals

The signup process for any SaaS app has become more accessible. You need to enter the credit card details and be ready to use the app. Most of the SaaS apps have auto-renewals.

Generally, the employees forget to cancel the subscription once they have stopped using the app and take a leap to try a new app. This leads to paying for unnecessary licenses which are not being used anymore.

For example, an IT department purchased Trello for a new project for the Marketing team. The team completed the project in six months, and then they stopped using the project management app without informing the IT department to cancel the subscription. This led to auto-renewal every month for an unused application.

You can avoid the situation if an individual owner has been assigned for each app purchased.

Zluri’s renewal calendar helps you keep track of all the upcoming contacts renewals and alert you way before the renewal date. 

For contracts, you get alerts 30 days, 15 days, and one day in advance. For payment, you get seven days and 1-day alerts. And you can set custom alerts as well. This helps you prioritize high-value contracts and optimize your SaaS spending.

Renewal module

Prioritize High-Value Contracts

4. Terminate Abandoned Apps

The growth of abandoned apps in an organization occurs when there is no process for procuring apps and termination of these apps. It implies that the SaaS apps are not terminated appropriately, which leaves your organization with compliance and security risks. 

Employees forget to terminate the apps they have signed up for without informing the IT teams. It leads to paying for abandoned subscriptions and may cause data breaches that IT teams usually are unaware of.

For example, when an employee signed up for Microsoft 365 and started using its various products. The employees store all the data in OneDrive. 

When the employee leaves the organization, if there is no process for offboarding employees, in such cases, there is a high chance of an abandoned license and potential data breach due to a lack of IT team awareness.

A solution to terminate the abandoned apps is to use a SaaS management tool like Zluri. It will keep you well informed about all the SaaS apps used in the organization. 

While offboarding employees, Zluri can verify that all their accounts are closed and terminated. It will help you to secure the data and save your money from being wasted on an abandoned license.

Zluri tracks the software usage and finds out the licenses that have been abandoned or unused. Additionally, you can de-provision the application for offboarding employees directly from Zluri's dashboard. Apps with no owner are always at a risk of app abandonment. 

Identify Apps with No Owner

Delegate Ownership for Various Tasks with Finance Owner and Alternate Owner

5. Downgrade Licenses to Suitable Tiers

SaaS providers offer immense flexibility to choose the pricing tiers per your requirements. The features you can avail of are based on your selected pricing tier. Sometimes, employees or teams overestimate their requirements and purchase the top-tiered plan. 

Only when the employees or teams start using the app do they realize there is no requirement for the features they paid for.

For example, you purchase the Business plan ($599/month) of Hootsuite that provides 35 social accounts with five users. Later, you realized that you required only 15 social accounts with 3 users, for which the Team plan ($129/month) is more suitable.

You can downgrade to the Team plan that fits your requirements. With this plan, the organization will save $470/ month. To optimize your SaaS spend, you should closely monitor your purchased top-tier SaaS tools.

Zluri helps you gain visibility to the top-tier applications. This will provide data to understand the app usage pattern in the department, business unit, teams, etc., and sign up for a plan that suits your organization.

Use an SMP for SaaS spend Management

If you are not keeping track of your SaaS landscape, you are losing out on SaaS benefits and increasing SaaS spending. SaaS apps with overlapping features, and under-utilized or unused SaaS tools, can give rise to massive costs.

These costs are avoidable with an appropriate SaaS management tool like Zluri. With Zluri, you can get a real-time view of app redundancies and cut costs without compromising on values. You can decide on downgrading or upgrading licenses, removing the duplicate apps, etc.

You need a SaaS system to monitor and review your SaaS inventory. It will provide you with visibility to the issues. With the help of a SaaS management platform, you will maximize your SaaS ROI, secure the organization, and retain a competitive edge.

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About the author

Sethu Meenakshisundaram

Sethu is the Co-founder of Zluri. He believes SaaS and APIs will help everyone become a builder. He frequently writes on SaaS management and workplace automation. Before Zluri, he was part of the founding team at KNOLSKAPE, one of the leading corporate learning gamification startups that he helped scale across 30 countries. Other than technology, Sethu is passionate about quizzing, board games, and photography. His retirement plan is to operate a board game bistro in one of the touristy spots of Southeast Asia.