What is Software Asset Management?

SaaS is a game-changer for companies when utilised effectively. But what exactly does ‘effectively’ mean?
What is Software Asset Management?
  • Companies are spending an average of £467 per employee a month on SaaS
  • More comprehensive Software Asset Management (SAM) is needed to detect waste, overspend or lack of usage
  • With effective SAM, risk of legal ramifications is also dramatically reduced

Why is SAM important?

Software asset management (SAM) refers to the systems that manage, utilise and improve SaaS usage. It’s a strategic step that allows an organization to go beyond deriving value from their SaaS within each department, to having a holistic view of how the organization as a whole is gaining value from their collective SaaS investments. 

Although knowledge around SAM is increasing for those leading IT and Finance purchasing decisions, it’s not necessarily a standard skill set for people in those roles, even though Software asset management is a vital part of these professionals’ routine.

The number of SaaS apps being used in businesses continues to grow each, so the need for finance and IT teams to get a handle on Software asset management is essential. Overall company spend on software-as-a-service continues to grow as well, projected to increase another 35% over the next two years. And as SaaS companies make it easy to try and buy their products on a recurring basis, IT and Finance departments are frequently not even aware of what teams are using, and the scope of the sprawl across the organization. That requires a swift but effective gear change by businesses.

Good Software Asset Management leads to...

Lower IT risk

Think about how many logins, passwords, security questions and credit card details an average person has stored on their laptop, or worse -scribbled in a notebook, or simply ‘remembered’. If you look at all of the potential points of entry to private information that an average user has due to accounts, subscriptions and payments, the risks become apparent. 

Now take those points of risk and apply it to a business. Every user has the potential to make a mistake or not realise an issue until it is too late. However, with effective software asset management, an organisation will finally have a grip on who is logging into where, using which card, and signing up for what purpose, and be able to narrow those potential entry points to sensitive data.

As always, there are also legal considerations to think about. When it comes to accessing customer data there are a slew of legal issues, with everything from GDPR to the SLA with your customers to take into account. A third party SaaS provider can either break or muddy those considerations, and without proper software asset management, a ‘simple’ security breach could turn into major legal ramifications.

Just look at Ticketmaster back in 2018. The company found themselves fined £1.25 million due to a data breach. The reason? They installed a third-party chatbot on an online payment page that had security vulnerabilities. Data exposed by attackers meant that customers' financial details were exposed. In its ruling the ICO listed failure to ‘adequately assess risks’ and no steps to implement ‘appropriate security measures to negate risks’. All steps that a good software asset management system would instill in a company.

Better control of spend

Without a SaaS Management tool, software spend can spin out of control. With proper asset management, a company is back in control. Organisations are spending an average of £467 per employee a month, according to data from Cledara. The budgets, as well, are confused with subscriptions languishing in departments that IT or Finance might not even think to look at. The chance of duplication is high, and without proper software asset management the same tool could be being used in a PR department, an accounting department, by HR and by IT without anyone being aware. 

In gaining control of spend, an organisation also has improved bargaining power. By knowing what your business needs and how it is already helping departments, it is easier to reach out and see where the costs could change. Many SaaS offer bespoke pricing alongside simple subscription payment structures. This means that discounts and negotiations could be being left on the table. With most SaaS subscriptions relying on recurring costs and trial periods, those who signed up themselves might not even be aware of what is leaving a company credit card at any particular moment. 

According to research by Gartner this year, organisations see an average overspend of 40% when it comes to cloud costs. In a period of massive digital acceleration due to COVID, proper software asset management stops this acceleration from spinning out of control and crashing an organisation into unnecessary costs. 

Team Empowerment

Employees and teams know which tools they want and need. While they might not always be 100% right, giving them the access and the empowerment to ask for what they need is a vital element of productive teams. With proper SaaS Management, everyone can be aware of what employees are requesting, and find a way to offer software simply, safely, and at the best cost to the company, without duplication 

Being leader of the pack

Having a software asset management policy is one thing. Having one that is modernised and up to date is another thing entirely. In that way, asset management for SaaS works rather like SaaS subscriptions themselves. You apply it, see the benefit, and then months later realise you are still doing something but aren’t really sure how much it’s costing you, if it still does the job you expected, or who really should be owning it.

As we just demonstrated, the advantages of good software asset management are not simply financial. There are a number of really positive side effects to understanding software asset management and utilising it effectively that can affect an entire company in different ways. 

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This post was inspired by questions from readers like you. We love receiving new and interesting questions that help us think about our data in new ways. If you found this post interesting and would like to keep yourself updated on big trends in the SaaS industry, subscribe to our newsletter by entering your email below.

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Jenny Liu
Head of Finance @ Marshmallow