SaaS Management - Explained
At Cledara we think about software quite a bit. In fact, our CEO Cristina Vila founded Cledara precisely because she knew there had to be a better way for people to successfully use the software they depended on daily. Our team is singularly focused on this mission and we are just getting started.
Since January is a great time for reflection, we thought we’d take a step back and share our thoughts and point of view.
So let’s get started!
So…What is SaaS Management?
SaaS Management is the practice of managing the cloud-based software applications used in a company.
This is a relatively new discipline because the problem is also new. The goal of SaaS management is to improve the value people get from the software they use, reduce the risk of uncontrolled tools or technologies in a company, and increase the effectiveness of the teams who rely on it to drive success.
It sounds simple enough. But if you’re reading this, you know that with SaaS applications more popular than ever, the number of subscriptions used in businesses continues to grow quickly, forcing finance and IT teams to figure out how to manage this growth effectively.
What’s at stake? Your people. How they work and collaborate. How your processes grow with you as you scale your business. And ultimately, the well-being of your employees and the customers they serve every day.
How did we get here?
This move to the cloud over the past two decades has been nothing short of stunning and shows no signs of slowing down. Now in 2022, SaaS has gone from a nice-to-have to a must-have. Marc Andreesen’s “software is eating the world” is in full effect as companies across industries rely on SaaS to function every day. And since the pandemic, SaaS adoption has skyrocketed. The SaaS market today stands at $185Bn and is expected to exceed $600Bn by 2023.
Once upon a time, before the Internet, on-premise software was king.
Employees were simply provided with pre-installed, pre-approved software to use and that was that. This top-down approach left little agency to individual teams looking to solve specific challenges, resulting in one-size-fits-all software that inspired no one but was easy to manage centrally. When the cloud burst on the scene in the 2000s, software as a service changed that model forever and now there is pretty much no other way to consume software. We love our software subscriptions so much that estimates put the number at 30,000-50,000 different B2B tools out there today.
Subscriptions bought and used across a company now have become a significant point of friction to the tune of tens of hours of unnecessary administrative work every month, even for relatively small companies.
Worse, because typically no one has the full picture of the software in a business, this wasted time translates into wasted money and processes that don't scale. In fact, globally, it’s estimated that 30% of SaaS spend is wasted on forgotten, unused and duplicate SaaS. That’s a big number that frequently flies under most company radars until somehow it gets exposed. Businesses suddenly find themselves with an ever-growing software stack they can no longer easily manage, let alone control.
SaaS is now the second biggest expense after payroll, prompting finance leaders to gain visibility and control of which applications are in use and the overall spend. Indeed, cloud-spend is projected to be a priority for CFOs in 2022.
More often than not, it falls to finance and IT teams to make sense of this chaos. They’re left to chase invoices, attempt to reconcile purchases, or simply try to figure out what SaaS is actually used in the organization. In a recent Cledara survey, 59% of finance and IT leaders claimed that their company uses an average of 93 additional subscriptions that they or senior management are not aware of.
This impacts not only finance and IT teams, but the entire business.
In the same survey, we found that poor SaaS management affects employee churn, with over 63% stating that issues with SaaS were causing a negative impact on company culture.
Companies like yours require the visibility and control of the software you use so you can focus on what really matters: Growing your business.
The SaaS Management Journey
Software adoption is a journey, rather than a point-in-time purchase. A single system that manages the end-to-end journey to discover, buy, manage and cancel software is the basis for how we look at SaaS Management and provides a foundation for success for companies to get the most out of their software.
Discovering the right software to use is becoming harder every day. Think of how you ended up using the software you depend on today. Maybe it was already in use when you joined the team. Maybe it is a well-known application in the space and considered one of the leading solutions that most other companies or teams your size use. Or maybe you chose it based on a recommendation from a peer.
The discovery stage has elements of visibility, collaboration, and recommendations:
- Visibility: What software do you already have in your business?
- Collaboration: How do you get easy access to it?
- Recommendations: What is the best SaaS for companies like me?
What if you could discover approved and compliant software, at the right time for your team based on what other companies at your stage already use and find useful?
Buying software is actually the easy part. It’s never been easier to try and buy software: Trials are seamless, subscriptions roll over to paid commitments and before we know it, we have yet another subscription on the corporate card for...several years. The harder questions relate to what happens next.
For example, how did you buy it? Did you use a shared corporate card, or a personal card that requires reimbursement? Did you just make it harder for the accounting team to reconcile this spend at month-end?
The buy stage revolves around authorization, payment, and spend control:
- Authorization: How do I get approval for new software?
- Payment: How do I pay for it in a safe and compliant way?
- Reduce and Control Spend: How do I control the costs associated with this application as my needs change?
Managing software is where the rubber meets the road. Once you’ve discovered and bought a software subscription, chances are your company will be using it for years. That’s the magic of SaaS models that investors love - the revenue keeps recurring every month. However, for you, the buyer, the question to ask is around sustained value.
On an ongoing basis, you should be evaluating the value you get from each application to determine whether it’s still worth it.
We suggest you stop and think of fundamental questions around your software and you’ll see why we stress the importance of the journey.
We think about the manage stage across five dimensions:
- Automation: How can I automate admin tasks such as chasing invoices, bookkeeping and reconciliation?
- Onboarding: How do I facilitate leaver/joiner/mover processes as my company grows?
- Manage: How do I manage the moving targets of budgets and spend
- Track Usage: How do I know which apps are used within my company?
- Compliance: How do I simplify the risk management process for my SaaS subscriptions? How do I make sure I’m permitted to use this software in my company?
Breaking up is hard to do, but in the software world sometimes is downright painful. We’ve been there ourselves when we tried to cancel a LinkedIn Premium account, along with other painful unsubscribes. That 30% of SaaS spend is wasted because unlike buying software, most vendors make canceling software a tedious, opaque, and sometimes infuriating process.
During the cancel stage, we suggest you take the following into account:
- Visibility: Understand what software exists but is not being used.
- Savings: Find that 30% wasted software in your company and address usage - or cancel it.
- Cancelations: Pay attention to this and seek a way to simplify and standardize cancelations.
Get started with a SaaS management platform
SaaS management empowers your company to gain clarity over all your SaaS subscriptions, spend and engagement.
With thoughtful SaaS management processes, companies like yours can gain full visibility of the entire journey of your software from discovery, purchase, management, and cancellation. It’s finally possible and it’s easier than you think to get started.
Learn how Cledara can help you manage all your SaaS in one place. Book a demo with us today!