What Is SaaS Management: A Comprehensive Guide | 2024

The shift from traditional systems to cloud computing has caused a surge in SaaS app usage, overwhelming IT teams. To efficiently handle this, organizations turn to SaaS Management Platforms (SMPs). In an upcoming article, we'll explore SMPs, their role in addressing the challenges of managing multiple SaaS apps, and the benefits they offer.

The rapid expansion of Software-as-a-Service (SaaS) has sparked what can only be described as an explosion in its growth. Today, these solutions cater to a broad spectrum of users, from small and medium-sized businesses to large enterprises. With such abundance, the demand for more is perpetual.

However, this proliferation necessitates a means of organizing and effectively managing these diverse solutions. While managing SaaS applications can pose challenges, the reassuring development lies in the emergence of SaaS Management Platforms (SMPs). These platforms offer the possibility of efficient management.

Moreover, the management of these SaaS applications is pivotal for several reasons. It encompasses crucial aspects like curbing SaaS wastage, ensuring robust data security, adhering to regulatory compliance, and more.

To embark on this journey, let's start by comprehensively understanding what entails SaaS management.

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What Is SaaS Management?

SaaS Management involves orchestrating, overseeing, and regulating SaaS applications within an organization's technological framework. It empowers IT teams to identify all SaaS applications within the organization's SaaS stack, monitor licensing usage and expenses, proactively handle renewals, and ensure compliance.

This holistic approach integrates essential processes for effectively expanding cloud-based software, aligning with strategic business objectives, meeting user needs, and upholding stringent data security and privacy standards.

Moreover, software designed to automate the management of SaaS applications falls under the category of SaaS Management platforms. These platforms alleviate the need for IT teams to manually document SaaS applications using spreadsheets.

Additionally, they provide comprehensive visibility into an organization's SaaS portfolio through various discovery methods. These methods encompass integration with Enterprise Resource Planning (ERP), Single Sign-On (SSO) systems, Human Resources (HR) systems, financial platforms, contract systems, and direct integrations with SaaS applications. This heightened visibility enables IT teams to efficiently and effectively oversee SaaS applications within the organization.

However, understanding the need for SaaS management involves recognizing the challenges faced in this domain. What specific hurdles or difficulties prompt the necessity for SaaS management?

SaaS Challenges: How Do Unmanaged SaaS Apps Pose Challenges for Businesses?

Unmanaged SaaS applications pose formidable challenges for businesses across various dimensions. Gartner's predictions indicate that by 2028, more than 50% of enterprises will integrate industry cloud platforms into their operational frameworks to expedite business initiatives. This forecast underscores the increasing reliance on the cloud as a fundamental element in conducting business, pointing towards a continuous and robust trajectory of SaaS adoption without any signs of deceleration.

Consequently, this scenario necessitates that IT teams grapple with an ever-expanding array of applications. The urgency of managing this multitude of applications cannot be overstated. Neglecting this responsibility can trigger multifaceted repercussions that adversely impact an organization's financial health and reputation.

To delve deeper into the challenges posed by unmanaged SaaS applications, let's thoroughly examine these intricacies:

Affects The Visibility Into SaaS Stack

The visibility into an organization's SaaS stack is significantly affected by several factors, primarily stemming from disparate handling of SaaS needs by individual business departments. While providing autonomy, this approach becomes precarious when the subsequent accountability lacks clarity.

The IT team often grapples with achieving comprehensive visibility into the SaaS stack due to various contributing factors:

1. Accumulation of Redundant SaaS Apps:

Application redundancy emerges from continually acquiring SaaS apps to address specific needs. This practice often leads to excess applications with minimal or no ongoing utility. Unused licenses add to the financial burden, remaining unaddressed in the background.

2. Increase in SaaS Sprawl:

SaaS sprawl arises from unregulated usage of applications within the organization, causing elevated costs, security vulnerabilities, and complexities in data management. This issue escalates when different departments independently procure software without proper coordination, leading to duplication and inefficiencies.

3. Duplication and Overlapping SaaS Apps:

Within medium to large enterprises, unnoticed overlapping applications serving the same purposes create inefficiencies. The presence of duplicate apps under separate contracts across various teams results from inadequate visibility. Timely identification of these redundancies could facilitate consolidated contracts and potential cost savings.

4. Excessive and Automatic Renewals:

Renewals of SaaS tools, occurring periodically, pose challenges when renewal deadlines lack clear visibility. Missed deadlines lead to additional financial burdens, whether renewals are managed manually or occur automatically.

5. Anonymity in Ownership and Users:

Data breaches and leaks are often tied to SaaS tools, especially when clear ownership is absent. Assigning ownership for each procured SaaS, even when an app might have multiple owners across different departments, is crucial. Differentiating owners from numerous and poorly documented users is essential to mitigate security risks.

Addressing these challenges is pivotal for organizations to efficiently manage their SaaS portfolios, minimize financial burdens, enhance security, and streamline operations.

Creates Gaps For Security Risks

The proliferation of SaaS applications within organizations introduces substantial security risks. While SaaS apps themselves aren't inherently risky, the sheer volume—often numbering in the hundreds within an organization—multiplies the potential risk factor exponentially. Unlike traditional on-site software, managing this multitude of SaaS apps hasn't been a focal point. The established rules and practices for handling traditional software are clear-cut. In contrast, the risks associated with SaaS apps are often overlooked due to their perceived cost-effectiveness compared to traditional software, despite their significant risks.

Here are the three primary security risks stemming from unmanaged SaaS applications:

1. Shadow IT

In the SaaS landscape, Shadow IT—also termed underground digitalization—refers to systems, software, or applications acquired and used within an organization without the knowledge or permission of the IT department. This issue becomes pronounced as SaaS presents the quickest route to digitalization. The extent of this problem is often underestimated, with many employees admitting to using unauthorized SaaS apps at work, bypassing IT approval. Product-led SaaS models increasingly enable self-service, contributing to this trend.

2. Sensitive Data Exposure

Significant amounts of an organization's data reside within SaaS tools, posing risks due to several factors:

• Data Storage: Reliance on third-party SaaS providers to host sensitive business data without clear discussions on data storage policies in service level agreements.
• Misconfigurations: Business departments owning SaaS apps may have access to security settings without adequate training, leading to misconfigurations.
• Data Flow: Sharing and modifying data within and outside the organization, sometimes irreversible, poses inherent risks.

Each SaaS application operates within its unique security environment. With an increase in SaaS app numbers, the potential for gaps and loopholes in security escalates.

3. Compliance Regulations

Globally, organizations are mandated to comply with data protection regulations and security policies (e.g., GDPR, SOC 2). Failure to comply can result in severe penalties. For instance, violating GDPR could lead to fines of up to 4% of the company's worldwide annual revenue or 50 million euros, whichever is higher.

It's critical to employ SaaS management tools to effectively address these challenges before they impact the organization. But how can you diagnose your SaaS stack to mitigate these risks?

SaaS Stack Diagnosis

SaaS Stack Diagnosis involves evaluating, analyzing, and assessing an organization's collection of SaaS applications (the \"stack\") to ensure they function optimally and align with business goals. This comprehensive process aims to identify inefficiencies, propose solutions, and optimize the performance of these tools.

Here are several steps to diagnose your SaaS stack:

1. Identify Symptoms of an Unoptimized SaaS Stack:

The below-mentioned pointers will help you identify the symptoms of an unoptimized SaaS stack.

• Redundant Applications Overload: Multiple apps serving similar purposes lead to confusion, redundant costs, and inefficiencies.
• Delays in Granting Employee Access: Slow access provisioning reduces productivity.
• Challenges in Managing User Access: Difficulty handling permissions leads to security risks and compliance issues.
• Lack of Visibility into SaaS Expenses: Inability to track spending results in budget overruns.
• Disjointed Collaboration: Diverse app usage disrupts collaboration, causing inefficiencies.
• Unexpected Renewals or Missed Deadlines: Renewal surprises lead to financial strain and service disruptions.
• Insufficient Support for SaaS Issues: Lack of responsive support causes downtime and user frustration.
• Addressing Identified Symptoms
• Eliminate Redundant Apps: Identify and remove duplicate or unnecessary applications.
• Streamline Onboarding: Optimize processes to grant timely access to new apps.
• Implement Centralized User Access Management: Ensure robust control over user permissions.
• Expense Visibility Tools: Utilize platforms offering clear expenditure insights.
• Standardize Collaboration Tools: Encourage unified tools for better teamwork.
• Robust Renewal Tracking: Implement systems to track and manage renewals effectively.
• Responsive Support Mechanism: Establish a team or process for quick issue resolution.

By recognizing these warning signs and taking proactive steps, your IT team can optimize the SaaS stack efficiently. Addressing these issues enhances efficiency, reduces costs, and ensures that the SaaS tools align with the organization's objectives.

2. Find Your Return On SaaS Stack

This is another way to diagnose your SaaS stack. But how to find a return on the SaaS stack? To find out the return on the SaaS stack for any subscription that you may have, you need to understand these three factors:

• Pricing:

Analyzing pricing involves managing wastage, identifying unused or duplicated subscriptions, and dealing with abandoned applications. This step ensures a thoughtful approach to subscription renewals while uncovering hidden costs linked to subscriptions. Maximizing returns in this dimension involves leveraging discounts available through loyalty programs, bulk subscriptions, referrals, or other incentives.

• Latent Value:

Understanding the latent value component encompasses exploring cross-app integration capabilities and data movement functionalities within the SaaS stack. It involves assessing an app's potential for automation, AI, or ML capabilities. Additionally, it requires consideration of any training needs associated with utilizing the app's functionalities to their fullest extent.

• Future Roadmap:

Evaluating the future roadmap involves anticipating the scalability requirements for your team. This includes assessing the costs related to downtime and understanding the impact of potential losses, such as data loss. Moreover, ensuring transparency in data security policies and infrastructure is essential. Evaluating whether the SaaS product's future roadmap aligns with the organization's anticipated needs is a pivotal aspect of this dimension.

Assessing the ROSS involves a comprehensive evaluation of these three dimensions to gauge the actual returns derived from the SaaS subscriptions within the organization. This assessment ensures that the organization optimizes its expenditure, leverages the full potential of the applications, and aligns with future needs and scalability requirements.

3. Conduct Business Impact Analysis For Your SaaS stack

Conducting a Business Impact Analysis (BIA) for your SaaS stack is crucial to understanding potential disruptions and implementing proactive measures. Here are the steps involved in conducting this analysis:

1. Run a Risk Assessment:

Evaluate potential risks and threats related to your SaaS stack. Identify factors like data security, service disruptions, and vulnerabilities that could impact business operations.

2. Gather Critical Metrics, such as Maximum Allowable Downtime:

Determine the maximum allowable downtime that your business can endure without significant negative consequences. This metric helps gauge the threshold for service interruptions and guides decision-making during downtime incidents.

3. Discuss with Stakeholders:

Engage with key stakeholders, including IT personnel, department heads, and decision-makers. Understand their perspectives on the criticality of different SaaS applications and their expectations regarding performance and availability.

4. Document the Findings:

Document the results of your risk assessment and discussions. Record identified risks, critical metrics, and stakeholders' input. This documentation becomes the foundation for devising strategies and responses to potential disruptions.

5. Present the Findings:

Communicate your findings to relevant stakeholders. Present identified risks, critical metrics, and potential impacts on business operations. The aim is to ensure a shared understanding of risks and gain support for proposed strategies.

Conducting a comprehensive BIA using these steps empowers organizations to proactively manage risks associated with their SaaS stack, ensuring resilience and preparedness for potential disruptions. Once you've diagnosed your SaaS stack, implementing a SaaS management platform can further enhance its management and optimization.

Strategy Used By SaaS Management Platform To Manages SaaS Applications

Basically, the SaaS management platform uses different methods to manage organizations' SaaS applications. So, let's go through each way one by one.

1. Discovers All The SaaS Apps Present In The Organization

While not all SaaS applications pose risks, the greater risk lies in the lack of awareness regarding which ones do.

SaaS applications are acquired and utilized across the organization by various business units, departments, or individual employees without proper authorization.

The identification or discovery phase occurs when the IT department initiates a review or, more formally, an audit across all organizational levels to identify and document both sanctioned and unsanctioned (Shadow IT) SaaS applications.

Ideally, this audit includes the financial footprint from the SaaS purchases, employee activity logs, and single sign-on (SSO) data. It may extend to the examination of personal devices, which are increasingly prevalent in hybrid working environments.

2. Categorizes All The SaaS Applications

After achieving clarity on all SaaS applications, the next immediate action should involve categorization. Categorization entails maintaining a dynamic record system detailing the users of each application.

Through categorization, it will be feasible to acquire precise and current data and insights related to SaaS, including:

• The overall count of SaaS applications and the number of overlapping or unused ones.
• Details about assets such as contracts and renewal periods.
• Information about application usage and spending associated with each app.
• The level of compliance and other relevant aspects.

3. Eliminates Unused And Underutilized Licenses

Once the categorization process is completed, SMP proactively identifies redundant or overlapping software subscriptions within your organization.

It thoroughly examines the categorized SaaS apps and detects similar tools serving the same purpose. Equipped with this data, your team can confidently discontinue duplicate SaaS apps, reducing costs and regaining control over your software stack.

Whether it's eliminating unnecessary licenses or reallocating them to other departments, SMP ensures that every license is put to good use, optimizing your spending and eliminating SaaS wastage. This way, it ensures your IT team effectively manages SaaS licenses.

4. Conduct Audits To Ensure Nothing Goes Unnoticed

SMP conducts periodic/regular audits and generates reports. These reports help your IT team to identify potential security risks, including data exposure, misconfigurations, and unauthorized access. This allows for proactive risk management and the implementation of necessary security measures to safeguard sensitive information.

Also, by conducting audits, organizations comply with relevant regulations and internal policies. It helps track adherence to licensing agreements, data protection laws, and other compliance requirements.

Additionally, the data and insights obtained from the audit empower decision-makers to make informed choices about SaaS applications. This includes decisions related to renewals, negotiations with vendors, and strategic planning for future software acquisitions.

Now that you know how effective SaaS management practically works, let's discover how SMP helps vendor management.

Next, You Need To Manage SaaS vendors

What Is SaaS Vendor Management?

SaaS vendor management refers to identifying, selecting, and effectively overseeing SaaS providers to meet your organization's specific needs.

SaaS vendor management revolves around making informed decisions when selecting SaaS providers, optimizing vendor relationships to drive value and efficiency, and mitigating risks to ensure the smooth operation of your organization's software applications.

But why is there a need to manage SaaS vendors? One needs to manage SaaS vendors for several reasons, such as mitigating third-party vendor risks, improving your return on SaaS stack (ROSS), effective application rationalization, and more.

Now that you know what is SaaS vendor management and why it's crucial, let's proceed further and learn how to manage a SaaS vendor’s lifecycle.

How To Manage SaaS Vendors' Lifecycle?

Managing the lifecycle of SaaS vendors involves four crucial steps:

1. Vendor Selection:

• Objective: Carefully choose vendors aligning with the organization's needs, goals, and standards.
• Process: Involves market research, evaluating capabilities, comparing features and pricing, assessing reputation, and due diligence on security and compliance.
• Benefits: Ensures investment in solutions that meet requirements, reducing issues in later stages.

2. Vendor Onboarding:

• Objective: Smooth integration of vendor services into the organization's systems post-selection.
• Process: Set up accounts, configured software, trained users, and aligned services with security and compliance standards.
• Benefits: Minimizes disruptions, accelerates value realization, and aids quick user adaptation.

3. Vendor Performance Tracking:

• Objective: Continuously monitor the vendor's service quality and adherence to agreements.
• Process: Establish KPIs, conduct regular performance reviews, and address issues as they arise.
• Benefits: Identifies improvement areas, maintains service quality, and informs decisions on contract renewals.

4. Vendor Renewals & Termination:

• Objective: Decide on contract renewal, negotiation, or termination based on vendor performance and evolving organizational needs.
• Process: Assess performance, review pricing, consider scalability and support, and plan for transition or termination if necessary.
• Benefits: Ensures continued value from the relationship through beneficial contract renewal or transitioning to a more suitable vendor.

These steps establish a structured approach for managing SaaS vendors, ensuring efficiency from selection to ongoing monitoring and contract decisions.

Now that you know how effective SaaS management practically helps in vendor management, let's quickly go through some of the benefits offered by SMPs. But before that, let's have a quick look at some reports.

Here are Some Reports On SaaS Management

You can go through the below reports to understand how different enterprises are managing their SaaS stack.

• The State of SaaS Management
• How Different Industries Manage SaaS: A Data-Backed Study
• What We Learned Analyzing 150M+ SaaS Usage Transactions
• Employee Offboarding for IT & HR: A Data-Backed Case Study

The Key Benefits Of SaaS Management Platform

Given below are some of the key benefits of SaaS management platform:

1. 360-Degree View: SMPs offer a comprehensive view of an organization's SaaS landscape, providing detailed inventories of applications, licenses, and usage patterns. This holistic visibility enables strategic decision-making and resource optimization.
2. Proactive Renewal Management: These platforms feature intuitive renewal calendars, enabling proactive management of renewal dates to prevent service disruptions. Staying ahead in renewals ensures seamless operations and avoids downtime.
3. Cost Optimization: SMPs assist finance teams in effectively managing SaaS licenses by identifying redundant, unused, or underused subscriptions. This data aids informed decision-making to trim unnecessary costs, maximizing the value from SaaS investments.
4. Real-Time Insights: Offering real-time reporting capabilities, SMPs provide accurate insights into SaaS app usage, costs, and compliance statuses, empowering IT teams with crucial information.
5. Vendor Consolidation: SMP insights identify overlaps between SaaS applications, enabling strategic vendor consolidation. Streamlining vendor relationships simplifies operations and reduces complexities associated with multiple vendors, enhancing efficiency.
6. Data Security & Compliance: SMPs enhance security by uncovering shadow IT and monitoring SaaS purchases across departments. They also ensure data security by automatically revoking licenses associated with departed employees. Furthermore, complete SaaS visibility assists in aligning vendors with organizational policies, ensuring compliance with regulations like GDPR and SOC2.

Choosing a suitable SMP for your organization involves assessing its specific needs and functionalities that align with your goals. The right SMP should offer comprehensive visibility, proactive management features, cost optimization tools, real-time insights, vendor consolidation capabilities, and robust data security and compliance measures. Tailoring the choice to your organization's unique requirements ensures maximum benefits and effectiveness.

How To Choose A SaaS Management Platform For Your Organization?

Choosing the right SaaS Management Platform (SMP) for your organization involves considering several crucial factors:

1. Budget: Determine your budget allocation for an SMP, ensuring it aligns with the platform's pricing structure and the value it provides. Be mindful of additional costs for setup, maintenance, or features.
2. Business Size Suitability: Consider whether the platform caters to your business size. Some SMPs may offer features tailored for small, medium, or large enterprises. Ensure the platform aligns with your organizational scale and requirements.
3. User-Friendly Interface: Evaluate the platform's usability. A user-friendly interface simplifies adoption and utilization across your team, reducing training needs and accelerating the integration process.
4. Complexity & Setup: Assess the level of complexity expected during the initial setup. Consider associated costs and resource requirements for implementation. Determine if the platform offers sufficient support or services during setup and integration.
5. User Skill Requirement: Evaluate the expertise needed to operate the platform. Determine if the platform requires skilled users or the involvement of experts for effective utilization. Choose a platform that suits your team's capabilities.
6. Application Requirements: Make a comprehensive list of your application needs and non-essentials. Prioritize essential features and functionalities required to manage your SaaS ecosystem efficiently. This list streamlines the selection process, ensuring you focus on crucial aspects.

Considering these factors, you can effectively assess and choose an SMP that aligns with your organization's budget, size, usability, complexity, skill requirements, and specific application needs. This approach ensures a more tailored and efficient selection process.

However, to simplify the SaaS management process, you can always opt for an effective SaaS management platform like Zluri. But, Why Zluri?

Zluri, an advanced SaaS management platform (SMP), offers a centralized solution to govern, control, and optimize an organization's SaaS landscape. It stands out by efficiently managing, securing, and eliminating redundant or unused licenses, enhancing the overall efficiency of the SaaS environment. What sets Zluri apart is its unparalleled data accuracy, providing reliable and up-to-date information crucial for informed decision-making in compliance, software usage tracking, and future investments. Beyond managing SaaS, Zluri's SMP delivers detailed insights into SaaS budgets, departmental allocations, expenditure comparisons, and payment card identification, empowering organizations to optimize spending and enhance cost efficiency across the entire SaaS spectrum.

So what are you waiting for? Book a demo and experience it yourself.

FAQs

What Do You Mean By SaaS Platform?

SaaS, or software as a service, is a cloud-based way of providing software to users. Furthermore, SaaS users opt for a subscription model instead of buying and installing software. And they can access and use the SaaS application from any compatible device via the Internet.

What Is An Example Of SaaS?

SaaS uses the Internet to provide subscription-based software services managed by a third-party provider. Some renowned SaaS examples are Dropbox, Google Workspace, and Salesforce.