Tech stacks in modern companies often consist of numerous software applications across various departments.

Marketing teams use analytics platforms and automation suites, sales departments utilise CRM systems, and HR manages recruitment and employee management tools.

This variety of applications provides specialised solutions for each team but also presents challenges for the organisation.

IT departments work to maintain oversight of this diverse software landscape and implement security measures. Financial teams are tasked with tracking multiple subscriptions and identifying any redundant or unused software.

The use of department-specific tools can result in separate data repositories, which may affect cross-functional collaboration and lead to differences in reporting and decision-making.

Employees, presented with multiple software options, might use unauthorised applications to address perceived needs, adding to the complexity of the software environment.

SaaS management offers a potential solution to these challenges. This approach involves implementing processes and tools to oversee the entire lifecycle of SaaS applications within an organisation.

It can help companies gain visibility into their SaaS usage, optimise costs, enhance security, and improve overall efficiency.

Today, we will learn more about SaaS management strategies, including their definition, the entire lifecycle of them, the benefits of doing so, and some tips.

Without further ado, let’s get started.

What is SaaS management?

SaaS management is the process with the goal of keeping tabs on all your business cloud software usage. It’s about knowing what apps you’re using, who’s using them, and how much you’re spending. This covers everything from when you buy software to when you stop using it.

According to Sastrify, SaaS management can be broken down into four main areas:

1. SaaS operations management: This is about making day-to-day tasks smoother and more automatic. It includes things like setting up new users, rolling out apps, and managing who can access what. By automating these tasks, your team can focus on more important work.
2. SaaS spend management: This part is all about controlling your software costs. It involves keeping track of what you’re spending, finding apps you’re not using much, and looking for ways to save money. The goal is to make sure you’re getting good value from your software investments.
3. SaaS vendor management: This area deals with your relationships with software providers. It includes keeping contracts up to date, managing renewals, and trying to get better deals. Good vendor management can help avoid surprise costs and improve your negotiating position.
4. Shadow IT management: Sometimes, employees use software that IT doesn’t know about. This is called shadow IT, and it can cause security and compliance problems. Managing shadow IT involves finding these hidden apps and making sure they’re safe and follow company rules.

SaaS management addresses these areas, providing a clear picture of your tech setup. This clarity enables smarter choices about your apps. It improves software usage, saves money, and enhances data security.

More in Nexalab’s blog: What Is Data Normalization? Definition, Techniques, and Importance

The SaaS Management Lifecycle

Managing your SaaS apps isn’t a one-time task. It’s an ongoing process with several key stages. Let’s dive deeper into each of these:

1. Discovery and inventory

This is about finding all the SaaS apps your company uses. It’s not just the ones IT knows about, but also the ones employees might have signed up for on their own. You need to know what you have before you can manage it.

Start by talking to department heads and employees. Use tools that can scan your network and find apps automatically. Don’t forget to check expense reports for software subscriptions. Once you’ve found everything, keep a list that includes details like who uses each app, what it’s for, and how much it costs.

2. Optimisation

Once you know what apps you have, you can start making them work better for you. This might mean getting rid of apps that do the same thing or making sure you’re using all the features you’re paying for.

Look for overlaps in functionality. Maybe you have three different project management tools when one would do. Check usage stats to see if you’re paying for more licences than you need. Consider training employees to use apps more effectively. Sometimes, you can get more value just by using what you already have better.

3. Governance and compliance

This stage is about setting rules for how apps should be used and making sure you’re following laws and industry standards. It helps keep your data safe and your business out of trouble.

Create clear policies about who can buy apps and how they should be used. Make sure you’re following data protection laws like GDPR or CCPA. Keep track of where your data is stored and who has access to it. Regular audits can help you stay on top of compliance issues.

4. Cost management

Here, you look at how much you’re spending on SaaS apps. You might find ways to save money, like getting rid of unused licences or negotiating better deals with vendors.

Break down your spending by department and app. Look for trends—is your SaaS spending growing faster than your business? Identify your biggest expenses and see if you can negotiate better rates. Don’t forget about indirect costs like the time spent managing apps or training users.

5. Security and risk mitigation

This final stage focuses on keeping your data safe. It involves checking that your apps are secure and planning for what to do if something goes wrong.

Review the security features of each app. Are they using strong encryption? Do they offer two-factor authentication? Make sure you have a plan for what to do if there’s a data breach. Think about how you’ll handle it if a SaaS vendor goes out of business. Regular security training for employees can help prevent many common issues.

Working through these stages helps you gain control over your SaaS apps, ensuring they benefit rather than hinder your business.

Remember, this process requires ongoing attention. Your business growth and changes will necessitate revisiting each stage to maintain current and effective SaaS management.

Certainly. Here’s the next section on why your business needs a SaaS management strategy:

Why Your Business Might Need a SaaS Management Strategy

As businesses increasingly rely on cloud-based software solutions, the need for a SaaS management strategy becomes more critical.

Without proper management, the increasing number of SaaS applications can lead to inefficiencies, security risks, and unnecessary costs. A well-implemented SaaS management strategy can help your organisation navigate these challenges and maximise the benefits of your software investments.

Those are some of the reasons why you need a SaaS management strategy. Aside from that, it also helps your business to:

1. Cost Control: A strategy helps identify unused licences, redundant applications, and opportunities for consolidation, potentially saving significant amounts on software expenses.
2. Better Data Security: With a proper strategy, you can better monitor and control access to sensitive data across various SaaS platforms, reducing the risk of data breaches.
3. Improved Compliance: A management strategy ensures that your SaaS usage aligns with industry regulations and internal policies, helping you avoid costly compliance violations.
4. Increased Productivity: By optimising your SaaS portfolio, employees can focus on the most effective tools, reducing time wasted on redundant or inefficient applications.
5. Better Vendor Management: A strategy allows for more effective negotiations with SaaS providers, potentially leading to better terms and pricing.
6. Reduced Shadow IT: With a clear strategy, you can minimise unauthorised software use, reducing associated risks and costs.
7. Streamlined Operations: Automating SaaS management tasks can free up IT resources for more strategic initiatives.

These reasons underscore the importance of implementing a SaaS management strategy, especially nowadays, where SaaS has become the lifeblood of a business. However, knowing why you need a strategy is just the first step. The next important thing is getting to know how to develop and implement an effective SaaS management strategy.

How to Build SaaS Management Strategy: Tips and Best Practices

Developing an effective SaaS management strategy is crucial for optimising your organisation’s software ecosystem. Here are key steps and best practices to consider:

Begin with a thorough audit.

Start by identifying all SaaS applications currently in use across your organisation. Document essential information such as user counts, associated costs, renewal dates, and usage metrics. This comprehensive audit will provide a clear picture of your current SaaS landscape.

Establish governance framework

Create clear policies that define roles and responsibilities for SaaS management within your organisation. Develop guidelines for software procurement, usage, and retirement. This framework will ensure consistency and accountability in your SaaS management efforts.

Centralise your management approach

Implement a dedicated SaaS management platform to centralise tracking and management of all applications.

One example of this kind of platform is Octobits. 

With software like Octobits , you can easily monitor usage, compliance, and costs across all SaaS applications in one centralised location. This will make your management processes easier and help you make data-driven decisions about your software portfolio via the centralised dashboard.

This approach enhances visibility across departments and teams, making it easier to monitor and optimise your SaaS portfolio.

Foster cross-departmental collaboration

Encourage open communication between IT and other departments regarding software needs and usage. Involve key stakeholders in decision-making processes to ensure that your SaaS management strategy aligns with overall business objectives.

Implement continuous monitoring and analysis.

Finally, establish processes for ongoing monitoring and analysis of SaaS usage. Use this data to inform decisions about future software investments and to regularly review and adjust your strategy based on changing organisational needs.

Remember, building an effective SaaS management strategy is not a one-time event but an ongoing process. Regular review and adjustment are necessary to keep pace with your organisation’s evolving needs and the rapidly changing SaaS landscape.

More in Nexalab’s blog: Small Business Data Management Tips: 7 Things You Can Do to Get Started

Conclusion

That’s all you need to know about SaaS management. Effective SaaS management is crucial for modern businesses to control costs, enhance security, and maximise efficiency. The steps outlined in this guide will significantly improve your SaaS oversight and utilisation.

Implementing these strategies can be challenging without the right tools. That’s why you should consider using a SaaS management platform, like Octobits by Nexalab.

Octobits by Nexalab is a SaaS management platform that simplifies these processes, offering app discovery, cost tracking, security monitoring, and contract management in one centralized system.

Contact Nexalab today to see how Octobits can improve your SaaS management.