Top 4 Strategies for Maximizing SaaS Spending

Top 4 Strategies for Maximizing SaaS Spending

Traditional on-premise software is becoming obsolete as the cloud grows and matures, while demand for Software-as-a-Service (SaaS) products has spiked.

The pandemic, its influence on the economy, competitors, employees, suppliers, shareholders, government regulations, and other factors, all contribute to the need for comprehensive IT asset management (ITAM) initiatives.

The good news is that the payoff for companies willing to embrace SaaS asset management initiatives can be substantial. SaaS management is a critical component of technology value optimization (TVO), which provides visibility over an organization’s whole IT asset estate. TVO eliminates the silos that are commonly seen in the cloud environment, physical devices, on-premise data centers, and virtual machines.

As part of TVO, SaaS management can provide clear data about assets, assisting in the rightsizing of software licensing and spend while also managing risk and compliance.

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Identifying the low-hanging fruit yields the top areas of opportunity for optimizing SaaS spending. The guidelines below might assist organizations in taking actionable steps to reduce SaaS spending.

Top 4 Strategies for Maximizing SaaS Spending

Establish organizational goals for the use of SaaS subscriptions

Companies must set clear goals for the pace of SaaS utilization. Experts say that despite having the requisite resources, most businesses do not take advantage of the full potential of SaaS licensing. This disparity between actual and targeted license consumption might result in millions of dollars being squandered.

Renewals should be viewed as opportunities to maximize license position with SaaS providers, regardless of the length of the license agreement (most licensing terms are 12 months, though some are monthly or quarterly).

Additionally, organizations should analyze where the business spends the most money; in general, contracts with the highest expenditure have the most possibility for optimization.

Investigate unauthorized spending and citizen IT

Businesses can detect unauthorized applications, who owns them, the associated expenses, and the total costs if they begin to delve deeply into their links into their financial management or purchasing systems. An effective SaaS onboarding governance program that establishes processes around the technologies that the firm employs can also help.

By establishing guidelines for SaaS usage, the business can avoid wasting money on applications that perform the same duties. Additionally, firms must ensure that all SaaS purchases are in accordance with company policy.

Consider granular activities to free up costly licenses

Optimize investments so that each user receives the most functionality for their unique demands at the greatest possible price, based on what is available in each supplier’s catalog. Begin by identifying entitlements, and then distinguish between active and inactive users. This procedure enables the business to reclaim and redeploy underutilized accounts.

Organizations need to learn who is using which products by digging deeper. This method of reviewing assets enables the reduction of entitlements or the harvesting of underutilized licenses for reassignment to another user.

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Determine who should not have access but does

Many ex-employees could continue to have access to sensitive applications, including SaaS, even after their employment has ended. While this obviously poses a big security risk, it also presents an opportunity to reduce SaaS spending. All suspicious or unlawful conduct should be identified and terminated by businesses.

Managing SaaS spending is only one component of the total process of optimizing technology value. A comprehensive ITAM strategy must assess the entire hybrid IT estate. However, the realization of the full financial benefits of technology investments can start with detecting and minimizing SaaS spending. The stages are minor, but the potential payout is substantial.

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Umme Sutarwala is a Global News Correspondent with OnDot Media. She is a media graduate with 2+ years of experience in content creation and management. Previously, she has worked with MNCs in the E-commerce and Finance domain