According to Gartner, 85% of enterprises will operate on a 'cloud-first' policy by 2025. However, there's a pressing issue shadowing the advancement of these technologies, namely the estimated 35% of SaaS spend that's wasted on forgotten, unused, and duplicate software.

As SaaS stacks continue to spiral out of control, the need for a reliable SaaS management solution has become increasingly relevant.

Why? Because these platforms make it easier than ever to visualize your company-wide software spend and prepare for upcoming contract renewal negotiations.

Effective SaaS management can be the difference between running onboarding processes with a 100% adoption rates and wasting thousands on tools that drive zero business benefit.

What is SaaS Management?

SaaS management involves proactively monitoring and managing your software portfolio. This includes buying, licensing, renewing, onboarding and off-boarding all of your software applications to make sure your business gets the most out of its technology investments.

While it's a relatively new field, it has rapidly gained importance due to the evolving nature of technology in the workplace.

SaaS management can be divided into 4 broad categories:

1. SaaS operations management focuses on streamlining operations and automating manual tasks. SaaSOps automation improves operational efficiency and reduces errors, freeing up your team's time to focus on strategic initiatives. It includes automating processes such as user lifecycle management, deploying apps, and managing user access and permissions.
2. SaaS spend management is all about gaining control over your SaaS spend. It involves tracking, analyzing, and managing your SaaS expenses to identify unused licenses, underutilized applications, and opportunities for cost reduction. Through application cost optimization, businesses can trim unnecessary SaaS spend and ensure their investments align with usage and business value.
3. SaaS vendor management involves managing relationships with your software vendors, overseeing license renewals, service levels and handling subscription management. It ensures that your contracts are always up-to-date, helps avoid unexpected costs, and leverages contract renewal management for better pricing negotiations.
4. Shadow IT: Shadow IT refers to SaaS apps used without IT's knowledge or approval. This can pose significant compliance and security risks. Effective SaaS management involves discovering and monitoring these applications to ensure compliance with company policies and industry regulations. It also ensures that your SaaS stack security is uncompromised.

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What are the benefits of SaaS Management?

From operational efficiency to visibility into your software licenses and employee satisfaction, SaaS management plays a crucial role in ensuring the smooth functioning of an organization.

Whether you're a lone wolf IT manager or leading a complete procurement team, modern SaaS management processes offer:

1. Operational efficiency:

The first significant benefit of effective SaaS management practices is increased operational efficiency. It does this by automating management tasks, reducing the time and effort needed to manage your applications manually. This automation includes everything from tracking app usage and costs to managing renewals and compliance.

2. Visibility into your SaaS stack:

SaaS management prevents a lack of visibility into your tech stack, providing a complete picture of your application usage. It offers actionable insights into application engagement analytics, allows for the discovery and identification of all SaaS apps across your business units, and provides real-time visibility into usage, spend, and compliance.

3. Employee satisfaction:

By providing the right tools to individual teams and active users in your organization, SaaS management can significantly boost overall employee satisfaction by ensuring your teams have access to the apps they need. This eliminates the usual frustration that accompanies a lack of necessary tools or access rights.

4. Streamline onboarding and offboarding:

Onboarding new employees and offboarding those who leave is made simpler with SaaS management. Through a centralized management strategy, all accounts and licenses can be easily assigned or revoked, ensuring a smooth transition for all parties involved.

5. Control and manage SaaS spend

Effective SaaS management can reduce subscription costs by identifying and managing unused licenses, optimizing the spending per application, and improving the purchasing process. By providing a detailed view of your SaaS spending, it helps identify opportunities for cost savings and more efficient resource allocation.

6. Data Security, Risk Reduction, and Compliance

In an age of increasing compliance risks and cybersecurity threats, SaaS management serves as a guardian of your organization's data security. It ensures that security protocols, such as password management, are properly implemented across all SaaS applications.

Effective SaaS management also mitigates potential security threats by monitoring for any unusual activity and enforcing consistent security standards across all apps.

It also ensures your organization remains compliant with relevant data security regulations — making it an integral part of your overall risk management strategy.

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4 best practices for managing your software

Implementing SaaS management into your business strategy is more than just adopting a SaaS management tool. It involves a series of best practices that can guide your approach and optimize the process:

1. Identify the existence of SaaS apps

Every effective SaaS management strategy starts with identifying the complete inventory of software subscriptions that are currently in use across all business units. Not knowing the full scope of your SaaS landscape can lead to redundancies, increased costs, and security vulnerabilities.

To get a clear picture, consider using SaaS discovery tools. These tools can effectively scan your network and identify both sanctioned and unsanctioned (shadow IT) SaaS apps.

Once you have a comprehensive inventory, categorize these applications based on their function, users, and criticality. This will serve as your foundation for more informed SaaS procurement decisions and efficient SaaS management.

2. Understand SaaS usage data

After you've identified all of your cloud software, the next step is to dive into the usage data. Understanding this data can provide essential insights into how your business is leveraging its SaaS tools. Collect data on who is using each application, how frequently they're used, the peak usage times, and the specific functions they serve within the organization.

SaaS management tools provide a centralized dashboard that can help automate this data collection and analysis, providing a clear picture of utilization trends. This data then helps you identify which applications are crucial to your operations, which are underutilized, and which are not needed.

Moreover, understanding usage patterns can help pinpoint potential security risks, such as unauthorized access or data sharing, and ensure compliance with data protection regulations.

3. Manage SaaS effectively

SaaS management isn't just about knowing what you have and how it's used; it's about ensuring that these applications are managed effectively to maximize their value and minimize risks.

This includes supervising user access to prevent unauthorized use, managing contract renewals to avoid automatic renewals or missed cancellation deadlines, and keeping track of licenses to ensure compliance and avoid overpayment.

Effective SaaS management also involves overseeing user roles and permissions, which can help mitigate the risk of data breaches. Regular training should be given to users to ensure they understand the best practices for using these tools securely and efficiently.

4. Trim down unnecessary SaaS spend:

Unnecessary SaaS spend can quickly accumulate without diligent management. Regular audits of your SaaS subscriptions can help you pinpoint and eliminate waste. During these audits, look for unused or underused applications. You may find that some applications serve the same purpose, enabling you to cut down on redundancies.

For underutilized apps, consider downsizing the subscription level or reassigning licenses to users who need them more. Keeping a keen eye on the contract renewal dates and terms can help you negotiate better deals or cancel services that are no longer required.

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How to choose the right SaaS management software

With an ever-growing number of SaaS management platforms being utilized by organizations around the world, it's critical to pick the platform will support your business demands, contribute to a positive business environment and provide a solid basis for effective SaaS management.

Let's take a look at some of the most popular platforms in the market.

Top 5 SaaS management platforms (2023)

1. Sastrify

Recently listed as the second fastest growing startup in Germany, Sastrify is an all-in-one SaaS management platform that enables procurement, IT, and finance teams to work together seamlessly, benefitting from best in-class buying processes, partnerships with leading SaaS vendors, and an ever-growing database of price benchmarks.

This in turn helps companies secure the best deals when buying and renewing SaaS subscriptions.

Some of Sastrify's key features and capabilities include:

SaaS stack discovery: Sastrify offers automated discovery methods, enabling comprehensive detection of all SaaS applications in use across your organization.

This key feature ensures complete visibility into your tech stack and uncovers any unauthorized or redundant applications, adding significant value to your business environment.

Access to procurement experts: After thousands of successful SaaS negotiations, Sastrify's in-house procurement experts know how to get a great deal every time. They'll also give you access to over $1 billion in pricing benchmarks.

SaaS cost optimization: Sastrify delivers actionable insights into your SaaS spending. It helps track costs, identify wasteful spending, and provides recommendations for cost savings, ensuring you manage and maintain control over your SaaS spend effectively.

Renewal alerts: Sastrify simplifies the complex task of overseeing subscription renewals, especially when juggling multiple vendors. It automates reminders, assists in managing negotiations, and optimizes renewal processes, functioning as a reliable contract renewal management tool.

Vendor management: Sastrify enhances vendor management, a process that can lead to better pricing and contract terms. It provides tools to manage vendor relationships, track vendor performance, and streamline the buying process, ultimately aiding in effective SaaS vendor management.

SaaS stack security: In an era where data breaches are increasingly common, securing your SaaS stack is paramount. Sastrify is committed to ensuring compliance with data protection regulations, providing a secure environment for your technology.

2. Productiv

Productiv provides engagement analytics and insights for applications, enabling businesses to comprehend the level and nature of employee interactions with their work and collaboration software.

It has an in-depth analytical approach, processing login data, and scrutinizing the activities post-login. This facilitates informed decision-making by streamlining renewal processes and enhancing license allocation strategies.

3. Torii

Designed with IT managers in mind, Torii's platform offers a robust solution for detecting, auditing, and governing SaaS applications used within a company. It facilitates SaaS license optimization and enables the configuration of automated workflows for routine tasks.

Torii's comprehensive dashboard transmutes raw data into valuable insights, offering lucid visualizations and generating reports in real-time.

A smart workflow also ensures that employees don't choose overlapping tools and routine tasks like renewals and access changes are automated through integrated bots.

4. Vendr

Vendr identifies your SaaS landscape, keeps it organized, and provides workflows and automations for managing, controlling, and tracking organizational changes.

Vendr also provides sentiment analysis to discern how your teams feel about their current software investments, making it quick and easy to identify what's working and what needs to be reconsidered.

5. BetterCloud

BetterCloud empowers IT teams with the ability to dictate, address threats, and enforce management and security policies for SaaS applications. You can exert full control over your SaaS environment with continuous event monitoring, fully automated policy enforcement, and individual/bulk remedial action.

IT can also develop advanced automation sequences to instigate customer policies in their applications, which includes user onboarding/offboarding, data exposure, user and team settings, and minimum privilege admin access.

Final thoughts

In today's digitally-dominated business landscape, leveraging efficient SaaS management platforms and processes to optimize SaaS costs and usage is vital. By understanding this and implementing relevant best practices, business leaders can streamline operations, reduce costs, and maximize the value of their SaaS investments.