SaaS Spend Management is a Program, not a Product or Application
SaaS spend management has become a prominent topic in businesses in 2023 for a variety of reasons, converging all at once. The rapid growth of SaaS adoption, expansion of the SaaS marketplace, need for cost optimization and efficiency, lack of visibility and governance, security and compliance concerns, and an increasing business focus on ROI and value optimization are all driving the increased importance of managing SaaS expenditure.
Further complicated by the ever-changing business landscape, characterized by diverse economic pressures and the likelihood of an atypical recession deviating from the usual 6-18 month duration, it is crucial to adapt and rethink traditional cost-saving approaches. Two key factors make the situation exceptionally unique: the accelerating adoption of Software as a Service (SaaS) amidst declining spend, and the likelihood of sustained high interest rates and increasing labor costs for years to come. Consequently, organizations must shift their focus from one-time cost-cutting measures to structurally transforming their approach to managing expenses.
The conventional strategy of negotiating with vendors and renegotiating contracts, only to witness costs gradually rise again, is no longer effective. It is time to recognize that SaaS spend management alone is a temporary fix. To truly address the challenges ahead, organizations should embrace a holistic approach to SaaS management that begins with User Lifecycle Management. By prioritizing this approach, businesses can optimize productivity through innovative and sustainable methods that go beyond short-term savings and instead provide a foundation for lasting cost management strategies.
By acknowledging the unique characteristics of the current macro environment and the changing dynamics of the business landscape, organizations can navigate the challenges ahead with confidence. Rather than viewing SaaS spend management as a mere product or service to be outsourced, it is essential to recognize it as a comprehensive program that is built in partnership with a mature approach to User Lifecycle Management. This programmatic approach enables organizations to proactively adapt to the evolving economic conditions, ensuring long-term financial stability and sustained growth. In a world where traditional methods no longer suffice, it is time to embrace a new paradigm of SaaS spend management and seize the opportunities it presents.
The Prominence of SaaS Spend Management
In today’s rapidly evolving business landscape, widespread adoption of SaaS applications has driven a surge in spending, prompting organizations to pursue the evaluation and effective management of these costs.
Organizations recognize the significant impact of SaaS spending on their overall IT budgets and strategic objectives, leading them to actively seek effective strategies and solutions to manage and optimize their SaaS expenditure.
SaaS Spend Management Requires a Program and Process, not just a SaaS product
This multitude of pressures causes many organizations to look for a solution in the form of a product or application to manage costs and spending. However, relying solely on a SaaS software product or application to handle SaaS spend management is not a viable approach, and here’s why:
Given these challenges, organizations must take ownership of SaaS spend. The most effective approach involves manually gathering spend data, identifying cost reduction opportunities, negotiating contracts directly with vendors, and implementing automated User Lifecycle Management (ULM) practices. By focusing on hygiene, such as automating ULM processes to allocate licenses based on need and removing them when employees leave the organization, organizations can make significant progress in controlling costs.
Relying solely on a SaaS software product or application for SaaS spend management is inadequate due to the limitations in obtaining spend data, the need for direct contract negotiations, the complexity of the SaaS landscape, the involvement of services for comprehensive management, and the limited cost savings achieved by third-party vendors. Organizations must adopt a hands-on approach, leveraging their own resources and implementing processes that align with their specific SaaS spend management goals.
User Lifecycle Management as the Foundation
User Lifecycle Management (ULM) is a critical component in effectively managing SaaS software spending and optimizing SaaS software usage within organizations. ULM encompasses various stages, including onboarding, mid-lifecycle management, self-service, and offboarding, each playing a vital role in controlling costs and ensuring efficient SaaS utilization. Here’s how ULM serves as a foundation for effective SaaS management and SaaS spending:
Implementing ULM automation significantly contributes to managing SaaS spending. It reduces IT ticket volumes by streamlining user onboarding, offboarding, and access management processes, freeing up IT resources for more strategic initiatives. Additionally, ULM brings high visibility and accountability to the organization, demonstrating a commitment to data security, compliance, and operational efficiency.
ULM’s impact extends beyond cost savings, providing scalability for global expansion by enabling seamless onboarding processes without heavy IT involvement. By automating ULM, organizations unlock operational efficiencies, improve employee experiences, and focus on strategic initiatives, leading to broader returns on investment.
ULM serves as the foundational pillar for effective SaaS management. By implementing ULM automation, organizations can ensure proper entitlements, reduce IT ticket volumes, enhance visibility and accountability, enable scalability, and realize a broader return on investment beyond cost savings. Prioritizing ULM sets the stage for comprehensive SaaS management, optimizing usage, and achieving long-term success in controlling SaaS software spending.
How BetterCloud Can Help
When it comes to SaaS Management, BetterCloud is the most qualified and trusted vendor, offering comprehensive solutions that address the critical aspects of SaaS Management and beyond. By starting with the strong foundation of ULM, BetterCloud enables organizations to effectively manage SaaS application access and entitlements, maximizing business productivity, and eliminating low value tactical work that saves IT organizations thousands of hours every year.
BetterCloud’s deep expertise in ULM, comprehensive SaaS management platform, advanced security capabilities, vendor-agnostic approach, thought leadership, and proven track record position them as the most qualified vendor to help organizations with their SaaS management needs, which includes offering guidance about emerging trends like the topic of SaaS spend management. By starting with the foundation of ULM and leveraging BetterCloud’s SaaS Management Platform, organizations can optimize utilization of SaaS applications, enhance security, and unlock the full potential of their SaaS ecosystem while managing SaaS spend.