What is SaaS management?

SaaS management is a function that involves overseeing and controlling an organization’s portfolio of cloud-based software applications and services. This includes everything from monitoring usage and managing user access to ensuring regulatory compliance and controlling costs related to SaaS subscriptions. Prioritizing SaaS management ensures that organizations maximize the value of their cloud-based solutions. 

Goals in SaaS management

Organizations’ goals for SaaS management are diverse and extend beyond simple cost control. They also include increasing transparency and reducing the risks associated with unmanaged solutions by making sure that the acquisition and usage of services are transparent, controlled, and efficient. This involves ensuring secure access to SaaS applications, monitoring license usage, and maintaining compliance with the many regulations that dictate varying degrees of data security and privacy.   

Financial management

The primary goal of SaaS management is cost optimization to reduce the overall expenses associated with software subscriptions.  

SaaS management helps coordinate regular reviews of subscription utilization, renegotiations of contracts, and consolidation software tools to reduce overlap by eliminating or downgrading unused, underutilized, or duplicate subscriptions.

License management and compliance

SaaS management helps schedule and manage regular audits of software usage, maintain an accurate inventory of all SaaS solutions, and keep all licenses up to date. This ensures that all software use is compliant with licensing agreements and legal requirements to avoid fines and legal complications.  

Scalability and adaptability

As usage patterns change, SaaS management oversees the rightsizing of solutions—scaling solutions up or down to fit needs. This includes working with providers to establish flexibility contracts and monitoring actual usage to stay on top of necessary changes. 

Security and data privacy

To meet regulatory compliance requirements, SaaS management tracks applicable regulations and monitors solutions to keep security and privacy controls correctly configured. This keeps organizations in compliance and protects sensitive data within SaaS applications from unauthorized access and data breaches. 

Usage and productivity 

While SaaS solutions offer undeniable productivity gains, these are achieved only with effective usage. SaaS management works with teams to make sure that users have the training programs needed to utilize these systems optimally. It also oversees usage monitoring tools to identify gaps.  

The SaaS management team also identifies opportunities for SaaS solutions to integrate with other tools for optimized workflows. 

Vendor management and service quality assurance 

SaaS management teams maintain relationships with providers to establish standards for service and ensure that they are met by performing regular reviews. In addition, they stay abreast of updates and new features and keep users informed. With SaaS management, it is easier to negotiate contracts, manage renewals, and handle vendor communications.    

Why organizations deploy SaaS management

The near ubiquitous use of SaaS solutions necessitates effective SaaS management. Organizations deploy SaaS management tools to provide a centralized system for managing these solutions. Without it, tracking the use of numerous SaaS solutions across various departments is complex and difficult at best and impossible at worst.   

Operational efficiency

• Improve the efficiency of SaaS oversight  
• Reduce the operational burden  
• Streamline the administration of multiple software applications 

Financial control 

• Provide a clear view of all SaaS subscriptions 
• Avoid overspending on unnecessary or redundant service 

Compliance and risk management

• Ensure that all software use is in line with legal and industry standards 
• Reduce the risk of non-compliance penalties 

Data security and privacy

• Meet requirements for safeguarding sensitive data within SaaS platforms 
• Implement measures to protect sensitive data as it is added or shared with other systems  
• Provide insights into user access and permissions to help prevent unauthorized access to sensitive information 

Resource optimization

• Ensure that each SaaS solution is used to its fullest potential 
• Maximize their investment in these technologies 
• Minimize subscription expenses 
• Avoid redundancies and unnecessary expenditures 

Maximize usage and productivity

• Optimize utilization of SaaS tools among employees  
• Implement training to enhance overall productivity 

Advantages of SaaS management

SaaS management offers a number of advantages that span operations, finance, legal, and end users. Advantages of SaaS management include:  

• Allows organizations to quickly adapt their software tools to changing needs 
•  Enables data-driven decision-making about software needs  
• Enhances security  
• Ensures that the organization remains compliant with relevant regulations 
• Facilitates SaaS solution management by providing: 
  • SaaS solution discovery  
  • License usage and spending monitoring 
  • Proactive management of renewals   
• Helps organizations negotiate more effectively  
• Identifies underutilized licenses and redundant applications 
• Increases organizational agility and innovation 
• Leads to significant cost savings  
• Maximizes return on investment for SaaS solutions 
• Minimizes risk from unmanaged tools 
• Provides visibility into the organization’s SaaS environment 
• Reduces the risk of non-compliance penalties and reputational damage from security incidents  
• Simplifies vendor management 
• Supports the use of goal-setting frameworks 

Developing a SaaS management strategy

Organizations need to create and implement a SaaS management strategy. The time invested in developing the strategy streamlines operations, maximizes the benefits of cloud-based software solutions, and minimizes risks and costs. The following are key elements to consider when developing a SaaS management strategy. 

Address data privacy, security, and compliance requirements

Ensure that data privacy and security systems and protocols adhere to the standards of applicable laws and regulations. Compliance should be a top priority due to the high volume of sensitive information that is stored in various SaaS solutions. Processes must be in place to confirm that all SaaS solutions are properly configured, and regular audits should be conducted to identify any changes that necessitate updates to maintain compliance with any new or updated laws and industry standards. 

Audit the current SaaS environment

Evaluate the utilization and necessity of SaaS solutions, assessing how each application is used and its importance to day-to-day processes. This helps identify underutilized or redundant applications that can be consolidated or eliminated.  

Reviews and evaluations should be conducted on a regular basis to confirm that SaaS solutions remain relevant and are delivering the appropriate value. 

Part of this audit process should be interviews with individual users to assess their satisfaction with its performance. 

Implement governance policies and procedures

Establish governance policies for SaaS procurement and usage within the organization. These policies should cover key areas, such as data security, privacy, and compliance rules and best practices. 

Clear guidelines need to be put in place for procuring new SaaS solutions, including approval workflows, to avoid redundancy and shadow IT. In addition, acceptable use policies should be developed for SaaS solutions to maintain security and compliance. All users need to be made aware of these policies and procedures and be required to adhere to them. 

Integrate SaaS systems

Where applicable, SaaS solutions should be integrated with each other and with on-premise systems to create a cohesive and efficient IT environment. This optimizes productivity and workflows as well as streamlines SaaS management. 

Inventory and catalog solutions

Create an inventory of all of the organization’s SaaS subscriptions that includes the name of the software, the vendor, the use cases of the software, the number of users, and the cost associated with each subscription. This detailed catalog provides a comprehensive view of the SaaS portfolio and helps shape effective management strategies. 

Manage user access

A key part of a SaaS management plan is the process of controlling who has access to what data and applications. This includes provisioning and deprovisioning user access as employees and contractors join an organization, change roles, or leave the organization. This not only enhances security, but also helps control costs. 

Monitor and measure results and ROI

Define key performance indicators (KPIs) and metrics to measure the effectiveness of SaaS applications and their return on investment (ROI). Include feedback from users as well as usage and performance data to inform decisions about the value of the SaaS solution and any adjustments. Tracking and analyzing this data increases agility and helps organizations adapt to evolving needs, technological advancements, and market trends. 

Understand why the organization needs SaaS management

In the era of digital transformation, SaaS solutions have become integral to organizations’ operations, because of the flexibility, scalability, and cost-efficiency they offer. However, these solutions require management.  

As organizations set out to develop a SaaS management strategy, they should take time to understand the objectives. Common SaaS management goals include: 

• Cost efficiency—aiming to optimize spending on SaaS subscriptions  
• Compliance and security—ensuring that all SaaS solutions comply with laws, regulatory standards, and corporate cybersecurity policies  
• Maximizing ROI—by enhancing productivity and ensuring the optimal use of SaaS tools 

Foster a culture of responsibility 

To ensure that the objectives of the SaaS management strategy are being met, all stakeholders should have a sense of responsibility for following the rules. Conducting regular training sessions on how SaaS tools should be handled, including security and privacy best practices, helps.  

In addition, giving users a feedback mechanism and encouraging input on application performance and usability provides valuable feedback and engages them in SaaS management processes. 

What is a SaaS system of record?

A SaaS system of record is the primary platform or application in an organization’s suite of SaaS tools. It serves as the authoritative data source for particular types of information that is stored and managed in the cloud. This system is the definitive repository for a specific set of data (e.g., customer information, employee records, financial data, and product details). 

The data in a SaaS system of record is usually structured and organized in a manner that allows it to be easily shared between other applications. Care must be taken with data to ensure data consistency across different applications and processes.   

Characteristics of a SaaS system of record include that it is considered a central data repository and acts as the single source of truth for that data. This means that if there are discrepancies or conflicts in data across various systems, the information in the system of record is considered the correct version. 

A SaaS system of record supports operations by: 

• Ensuring data consistency and reliability
• Facilitating better-informed decisions 
• Integrating seamlessly with other applications by using application programming interfaces (APIs) and middleware   
• Streamlining data management processes   

The SaaS application lifecycle

SaaS management helps users throughout the entire SaaS lifecycle—from discovery and adoption to renewals and discontinuation.

Identifying the need 

Users identify specific needs or problems within their processes that require a software solution. Research is conducted to find potential solutions and assess the alignment of functionality with needs. SaaS management processes can provide structure for this stage. 

Evaluation and selection

After identifying options, users or procurement teams conduct an in-depth review of the SaaS solution that includes comparisons of different solutions, feature reviews, pricing and contract term assessments, and usually a trial to see how the solution performs in a real-world setting. 

Subscription and onboarding 

Once a decision is made, a plan is selected, and the subscription begins. Depending on the use case, this could be done directly by a user or through an IT procurement group. Users then go through the onboarding process, which includes initial setup, user account creation, and familiarization with the application’s features. 

Integration and configuration

Often, setup includes work to integrate the SaaS solution with existing systems to enable seamless workflows. In addition, settings and preferences within the application need to be configured to align with specific user needs and processes. 

Training and adoption

For organization-wide systems, users are trained on how to use the application effectively and integrate it into routines and processes. 

Reassessment, renewal, or discontinuation

Periodically, reassessments should be conducted to review the application’s performance, user satisfaction, and continued alignment with SaaS management goals. In cases where the application no longer meets expectations or requirements, the subscription is not renewed. If it continues to perform well, a review of users should be done to confirm that the license covers the actual users. 

SaaS management: A benefit multiplier

SaaS solutions provide incredible value, from cost savings to productivity increases. Investing in SaaS management ensures that organizations realize maximum value from solutions and has the multiplier effect of helping organizations further optimize their usage.  

A comprehensive SaaS management strategy enables organizations to effectively leverage the power of cloud-based software as well as help manage costs, improve security, ensure compliance, and align solutions with overall objectives and evolving needs. 

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