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What is SaaS Management?

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SaaS Management provides visibility, cost governance, and security insights into an organizations’ SaaS tools. A SaaS Management platform is a cloud-based solution that enables organizations to understand their SaaS spend and usage, carefully managing all the essential functions associated with their tech stack. It automates manual tasks, eliminates shadow IT, and helps significantly rein in spend, running continuous SaaS optimization analysis.

As companies continue to adopt new applications and grow their SaaS stack cross functionally, leaders must get a handle on excessive spending to effectively meet budgets, reallocate resources, and capitalize on investments that drive innovation and generate growth.

Why Do I Need a SaaS Management Platform?

Software-as-a-Service (SaaS) applications like Microsoft 365 and Team, Slack, and HubSpot put the “force” in workforce, fueling productivity. But as businesses adopt more software tools and move to the cloud, SaaS environments become intricate and complex to manage.

It can be difficult to track application usage across different departments and teams, especially in larger enterprises. Shadow IT (where employees use unauthorized SaaS apps) consumes 30-40% of IT budgets, and holding departments fiscally responsible for their software costs is a key challenge for 53% of IT and finance teams.
SaaS apps operate on a convenient subscription basis, but it’s easy to overprovision leaving many licenses unused. (On average, 29% of SaaS licenses go unused). With the accessibility of online shopping, it’s easy to purchase licenses outside of the corporate contract, meaning companies lose out on volume discounts – they can’t leverage their economies of scale.
Pricing structures continue to change due to inflation, enhanced AI features, and shifts to tiered pricing – convoluting cost management strategies.

For these reasons, 82% of CIOs are pursuing SaaS management as a key opportunity for reducing IT costs and optimizing technology spending. A SaaS management software like Tangoe One Cloud for SaaS controls SaaS strife by providing comprehensive visibility and management, enforcing strict governance, promoting cost efficiency, and streamlining overall cloud financial management, or FinOps.

Top Challenges Solved by Effective SaaS Management

Some common problems with SaaS applications that can be fixed by a management platform include:

Overspending: SaaS applications can be expensive, and it can be difficult to track and control spending on different SaaS tools across your organization. A SaaS management platform will help organizations identify duplicate tools and unused licenses, as well as areas where they can cut costs via vendor consolidation and save money on their SaaS spend.

Compliance: SaaS applications can also pose compliance risks. A management platform can help organizations ensure that employees and their devices adhere to compliance and governance protocols with the right installed apps, role-based access, and permission settings.

Security: Some SaaS applications pose security risks, especially when not verified through IT. A SaaS management platform can help organizations secure their data by identifying any potential risky behavior such as app abuse/misuse or unapproved installations that may pose security threats.

Visibility: It can be difficult to track all of the SaaS tools that an organization is using across multiple teams. An effective management platform will help organizations get a complete view of their SaaS landscape and avoid a problem that is all too common: Shadow IT.

These problems are often summarized by the term Shadow IT. Gartner defines shadow IT as the ownership and/or control of IT devices, software and services outside of IT organizations. Lack of corporate technology governance leads to an influx of siloed SaaS purchases and operational activities, creating unmanageable costs and data exchanges. This in turn opens a pandoras box of security, compliance and wasted SaaS spend in the form of unused licenses and unnecessary spending.

As adoption of SaaS tools increases, it creates major hurdles for IT teams to right-size assets to business needs. SaaS management tools like Tangoe One Cloud for SaaS provide the level of control and visibility many enterprise IT teams are currently missing in order to manage their cloud services.

What Are Benefits of SaaS Management Software?

Comprehensive Visibility and Management

Comprehensive visibility into application usage, costs, security, compliance, and more create a holistic approach that empowers you to make informed decisions, optimize your software investments, and enhance overall operational efficiency for SaaS management. Here’s a breakdown of how different teams benefit.

IT teams can maximize the value of SaaS investments by reallocating resources and budgets, scaling effectively, and right-sizing as needed to drive innovation and growth. They’ll also increase ROI with critical insights that inform SaaS spend, budgeting, and forecasting decisions. Read more about how we help IT leaders.
Security operations teams can enforce strict governance, regulatory, and security protocols to protect sensitive data, stay ahead of potential security threats, and ensure compliance audit readiness. This is accomplished with Shadow IT SaaS discovery features and app security ratings, which should be part of any complete SaaS management solution.
Centralized SaaS spend management tools provide finance teams with a holistic view of all spend, operating costs, license utilization, and consumption. Read more about how we help finance leaders.

Shadow IT Discovery

Discovery of any unauthorized procurement, deployment, and use of digital services or cloud-based software that circumvent a central IT department is an essential component of SaaS management. These unsanctioned apps can expose an organization to compliance and security threats, not to mention consume up to 40% of IT budget.

Features like Shadow IT Discovery identify apps in use via integrations, SSO, ID providers, and financial systems offer a systematic way to collect data from SaaS applications. Virtual Desktop Agents can also track apps installed and time spent on each app. Browser extensions also capture activities, reporting them to the SaaS management platform for comprehensive cost and usage analysis. The solution provides real-time alerts, continuous monitoring, and detailed SaaS Management analytics. This is essential to providing complete visibility of user activity.

Pinpointing Areas of Cost Savings

With the right SaaS management software, you’re able to track, measure, analyze, and control costs via advanced analytics, automation, and automated spend management reports. Instant cost savings recommendations are delivered in 24-48 hours with data that identifies unsanctioned expenses, real-time usage trends, and unused, underutilized, and/or unnecessary licenses that can be decommissioned to reduce and even eliminate wasted spend. This helps IT teams right-size their number of licenses, purchasing only what they need, and align app subscription tiers to their specific usage needs.

Simplifying Procurement

This data-driven purchasing intelligence kills two birds with one stone, providing certainty through an accurate inventory and substantial savings. With access to current benchmark data, teams can also negotiate better terms and rates with every vendor to rein in spending and SaaS operating costs. With SaaS license and contract management capabilities within Tangoe’s platform, IT and procurement teams can also access all contracts in one central location to manage contract renewals and payments with ease. Read more about how we help procurement leaders.

Automation

Nearly 90% of IT professionals believe that automation is essential for SaaS management, but 64% lack the resources to automate. Tangoe’s SaaS management tool automates many manual tasks and delivers a level of transparency and control that turbo boosts productivity and process efficiency.

Employee on- and off-boarding automation features allow new users to get set up quickly and easily, while IT can control permissions to protect data privacy.
An extensive catalog of 775+ direct integrations allow IT teams to instantly see all applications in use, knowing if they are centrally managed by the business, managed by a specific team, as well as unmanaged or restricted by security or corporate policy
Automated finance and accounting processes from invoice management and bill pay services to automated cost allocations and chargebacks (a top challenge cited by 53% of companies) all help drive efficiency while eliminating late fees and service disconnections.

Common Features of a SaaS Management Platform

Here are the most popular features and functions included in a useful SaaS management platform, all which are included in Tangoe One Cloud for SaaS:

Shadow IT Discovery: Tangoe has the widest cloud visibility in the industry — we offer the highest number of direct SaaS integrations in the industry and use five different ways to uncover sanctioned and unsanctioned apps
Real-Time Usage & License Data Analytics: Understand real-time usage of applications & licenses, with access to the deepest user analytics for Microsoft 365
SaaS Spend Management & Monitoring: Thresholds and alerts help flag overspending while integration with financial systems allow comparisons between actual cost and budgeted spend
Renewal & SaaS Contract Management: Procurement teams love how easy it is to proactively manage subscriptions and control subscriptions set to auto-renew
License Management: The most advanced automation in the industry allows for easy employee onboarding and off-boarding
Invoice Management: Automated processing and bill pay simplifies and accelerates financial management
Inventory Analysis and SaaS Optimization: Recommended SaaS vendors offer cost-saving alternatives, helping you consolidate redundant apps with a track record of slashing costs by at least 30%
Advanced Reporting and Analytics: Flexible dashboards and reports cater to the needs of IT and finance teams with high-level overviews and granular details

SaaS Management Best Practices

SaaS Optimization

SaaS optimization is all about gaining a clearer understanding of your SaaS ecosystem so you can get the most use out of the tools you already own and make smarter choices about which apps to purchase moving forward. Tangoe’s SaaS optimization solution makes this easy by providing a comprehensive view of all your SaaS applications, licenses, users, and expenses. This enables you to spot apps that are going unused or are not being fully utilized. Plus, our platform gathers data on costs, which you can leverage to lower the impact on your IT budget and negotiate better deals with vendors. As an AI-powered platform, it can also automate the process of license assignment and decommissioning, helping you boost productivity.

Create Cohesion Between IT, Finance, and Procurement Teams

SaaS resources and finances should be managed together in a unified platform that benefits everyone involved. Offering one source of truth, your SaaS management software should focus on cost optimization and process efficiency simultaneously. Different teams should be able to leverage a single platform to handle their responsibilities effectively, be it:

IT: evaluating usage data to identify unused licenses and optimize utilization, discovering and mitigating shadow IT, or managing permissions and unchecked access. Learn more.
Finance: comparing actual expenses against the budget, checking invoices against contracts to pinpoint billing errors, or forecasting future spending. Learn more.
Procurement: Incorporating unsanctioned license purchases into corporate contracts to better leverage economies of scale for volume discounts, taking an inventory of assets before contract negotiations, or shopping for more cost-efficient alternatives. Learn more.

Build a Culture of Cloud Cost Optimization

By establishing observability into cloud costs, leaders and employees alike will take more personal responsibility for expenses. Get department leaders, line-of-business owners, and other stakeholders on the same page with custom reports that allow each group to recognize how their decisions and purchases impact costs and budgets. Provide them with overarching views of how SaaS tools are being used and charged back to their organization. Enable IT to accelerate chargeback processes with automated capabilities that hold teams and departments fiscally responsible for their cloud consumption.

Address SaaS Management as Part of Your Broader Cloud Estate

Don’t silo your cloud cost optimization efforts. Instead, integrate them into a comprehensive strategy. Tangoe provides a complete cloud expense management solution, empowering companies to gain tighter control over their UCaaS, IaaS, and private/on-premise environments as well.

Multi-cloud IaaS optimization allows you to track, analyze, and rightsize IaaS in one easy-to-navigate application that works across four major cloud service providers. Learn more.
UCaaS optimization platform uses the FinOps Framework to give you the visibility and insight you need to maximize your cloud communications investments. Learn more.
Private cloud expense management is available for VMware® instances, offering holistic visibility that pulls together all your ancillary charges – from hardware and software expenses to utility, storage, and facilities costs. Learn more.

8 Signs That You Need SaaS Management Software

Here are the most popular features and functions included in a useful SaaS management platform, all which are included in Tangoe One Cloud for SaaS:

1

High SaaS spend: Increasing SaaS costs with a growing number of subscriptions signals the need for a more structured, centralized management approach.

2

A Sea of SaaS applications: You’re dealing with a cacophony of SaaS applications, leading to inefficiencies and confusion.

3

Lack of visibility: Unsure which applications are in use and teams are using which tools? SaaS management software will eliminate your concerns about overlaps and underutilized software.

4

Manual processes: Stakeholder teams shouldn’t be bogged down by manual tasks like license renewals and usage tracking. SaaS management software untethers them to focus on growth and innovation.

5

No tracking of app usage: On the flip side, your teams may not be monitoring SaaS app usage at all (research shows that 56% of all enterprise apps aren’t monitored in any way). SaaS management tools reveal usage even at the deepest levels, uncovering utilization and consumption habits even for tiered applications like Microsoft 365 E3 and E5 licenses.

6

Unclear overall SaaS costs: You lack visibility into overall SaaS spending, hindering your ability to budget, forecast, and optimize SaaS investments. Automated reports can slice and dice app costs for each department and stakeholder while also offering holistic views of all-in expenditures.

7

Missed or unexpected SaaS renewals: Renewal dates and contracts set to auto-renew can catch you off guard with changes in per-seat pricing and terms. Stay ahead of the game with centralized management and proactive alerts.

8

Scalability concerns: You should be able to easily plan for growth with a systematic way to manage software as your organization expands. SaaS expense management tools simplify procurement, forecasting, and budgeting.

How to Start Managing Your SaaS Subscriptions, Applications, & Licenses

Effectively managing your SaaS applications, licenses, and subscriptions involves a structured approach that emphasizes visibility, accountability, and continuous improvement.

SaaS Subscription Management: What You Need to Do

Track costs: Monitor subscription contracts and fees, payment schedules, and total spending across your various SaaS apps.
Manage renewals: Set up alerts for upcoming app renewals, manage the renewal process to avoid service interruptions, and negotiate with vendors to optimize terms and pricing.
Budget and forecast: Effectively plan future SaaS spending based on current usage and anticipated growth.
Manage various SaaS vendors: Maintain relationships with your SaaS providers, manage contracts, and consistently evaluate vendor performance.
Manage user access: Regularly review user access levels to ensure that employees only have access to the applications they need and nothing more.
Cost analysis and reporting: Generate reports on subscription costs and usage to identify trends and inform budgeting decisions.
Negotiate with vendors: Leverage usage data to negotiate better pricing and/or terms when renewing contracts.

SaaS Application Management: What You Need to Do

Inventory applications: Create a comprehensive list of all the applications currently in use across your organization. Include details such as purpose, costs, user counts, and user departments. Discovery tools can help you catalog a list of both sanctioned and unsanctioned applications in use.
Monitor usage: Track how often each application is used to identify which tools are heavily relied on and which are underutilized or unused.
Identify integration: Know which different applications are working together and further integrate with existing systems to streamline workflows.
Manage user access and permissions: Keep a close eye on who has access to which applications, with full control over user permissions and access based on employee roles.
Evaluate application performance: Assess the quality of service, network and bandwidth support as this drives the effectiveness of each application in meeting your business’ needs.

SaaS License Management: What You Need to Do

Review license types: Assess whether you have the appropriate types and numbers of licenses based on actual usage. Adjust as needed to avoid excess costs.
Track all licenses: Maintain a comprehensive record of all your SaaS licenses including type, count, and renewal dates. Prepare for audits by maintaining accurate records of license usage, compliance, and vendor agreements.
Monitor the usage of tiered tools: Track actual usage of tiered tools, also known as the sub-products contained within a single license. This ensures that you’re not over-licensing or underutilizing applications.
Optimize licenses: Leverage usage data as insights to optimize utilization, reallocating licenses, downgrading licenses, or adjusting your number and type of licenses based on current needs. This helps to avoid unnecessary costs without disrupting employee productivity.

Overall SaaS Management Recommendations:

Establish guidelines: Develop clear policies around the procurement, usage, and decommissioning of SaaS applications. This should also include criteria for evaluating new tools.
Set roles and responsibilities: Assign ownership for managing SaaS applications, including tracking licenses and budgets.
Adapt as needed: Be prepared to adjust your SaaS portfolio based on changing requirements, emerging technologies, or shifts in business strategy and projects.
Leverage SaaS Management Software and Services: Solutions and service providers can simplify the day-to-day work of administration, including all of the above. Solutions that integrate with HR systems are particularly helpful in reallocating licenses as employees come and go, offering automation tools that take the burden off internal IT teams.

Why a Third-Party SaaS Management Tool is Better Than Built In Analytics, Legacy Tools or Spreadsheets

Vendor Dashboards Alone Aren’t Enough

SaaS providers and their dashboards may include built-in analytics with basic insights into data usage, but all too often these don’t get to the bottom of challenges related to Shadow IT, leading many companies to continue paying for more tools than they need. Native tools also lack insights on how to rightsize application usage to drive down SaaS costs. A lack of purpose-built optimization features means you need to manually correlate multiple sources of data to get the answers and insights you need. In these cases, companies can get bogged down in the administrative work of data analysis, never reaching the outcome of optimization.

Legacy Tools Can Fall Short of License, Expense, and Contract Management

Traditional Software Asset Management (SAM) tools were initially designed to support auditing projects. While they provide some visibility into software inventory and assist with license management, SAM tools often lack the functionality for comprehensive SaaS management. They fall short in delivering complete and ongoing discovery of all SaaS applications – the cornerstone of effective SaaS management – and do not address expense management, financial automation, and renewal management.

Manual Spreadsheets are Inaccurate and Labor Intensive

Spreadsheets come with a unique set of limitations. They quickly become outdated, providing static or incomplete snapshots rather than continuous, holistic insights. They are also not scalable. As data volumes increase, they become cumbersome to handle. Keeping them up to date is labor intensive, leading to fragmented visibility into your SaaS applications. These data silos often keep different stakeholders in the dark, hindering collaboration and informed decision making.

Related Terms & Definitions

SaaS Optimization

SaaS Optimization is the practice of evaluating your SaaS ecosystem through a comprehensive view of all your SaaS applications, licenses, users, and expenses so you can get the most use out of the tools you already own, and make smarter choices about which apps to purchase moving forward. Learn more about SaaS Optimization with Tangoe.

Unified Communications as a Service (UCaaS)

Unified Communications as a Service (UCaaS) refers to cloud-based communications solutions that deliver multiple types of digital communications services in one unified system. Read the full guide.

FinOps

FinOps is a strategic framework helping companies control their cloud costs and make efficient use of their cloud services. This cloud financial management discipline brings together IT operations, finance, and other stakeholders and was created by the FinOps Foundation. Read the full guide.

Cloud Cost Management

Cloud Cost Management (CCM) is a strategic and tactical approach to using cloud technologies and computing resources more efficiently and cost-effectively. Read the full guide.

Cloud Expense Management

Cloud Expense Management (CEM) is the process of effectively controlling any costs and resource usage related to cloud computing environments. CEM solutions offer one centralized technology platform to help companies achieve this for both their cloud software services and their cloud infrastructure services. Read the full guide.

Cloud Data Management

Cloud data management is the process of managing all enterprise data stored across cloud services & platforms or in a combination of public/private/hybrid cloud environments and cloud applications. Read the full guide.

Cloud Services Management

Cloud Services Management (CSM) is the process of effectively managing cloud services, products, and resources. CSM commonly uses a variety of tools and processes with the aim of optimizing costs and reducing waste by ensuring all cloud services are used to their full potential. Read the full guide.

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