How to avoid the SaaS management ‘law of diminishing returns’
Mar 15 | 5 mins read
Cost reductions from SaaS spend management solutions can be impressive, but once the tools are in place to optimize license usage, you’re not going to repeat the big initial savings. To avoid this law of diminishing returns and maintain your ROI long term, consider solutions that deliver strategic improvements in IT operating efficiency, compliance and security. To justify investments in SaaS management solutions, or in anything else for that matter, the management team needs assurances that the ROI is meeting (and hopefully exceeding) their expectations. When it comes to SaaS management, getting an accurate view of ROI means tracking certain performance indicators, but these depend on how broad and comprehensive an approach you take. For example, while many SaaS management solutions deliver only ‘one-hit’ spend management savings, others offer longer-term benefits like improved IT operating efficiency, compliance and security. The question is, what kind of savings metrics should you be using to accurately report on SaaS management ROI? And how can you go beyond spend management to maximize your ROI in the long term?
Where to look for your SaaS spend management ROI
To begin any analysis of SaaS management ROI, take a look at these three broad areas:
1 - Savings from application consolidation
One of the key benefits of effective SaaS management is the ability to identify duplicated apps and functionality across the organization. Consolidation of apps in the portfolio, for example, means less redundancy and greater economies of scale when purchasing licenses for preferred tools. It’s also an excellent idea to track the total number of applications being used by your departments and teams, plus the average license cost per employee. Both of these metrics should, of course, have fallen significantly since you deployed your SaaS management solution, allowing you to measure and report your ROI.
2 - Savings from optimized renewals processes
By bringing control to your renewals processes for SaaS license agreements, SaaS management tools can deliver major cost savings. With visibility of upcoming renewals, you can a) avoid entirely unwanted subscriptions by cancelling them in time, and b) reference actual usage and engagement data to right-size your licenses and negotiate a better deal. Tracking savings from proactive SaaS renewals planning contributes to your overall ROI.
3 - Aligning SaaS spend with actual usage
Your spending on SaaS apps may fluctuate significantly due to unexpected events, expected growth in user numbers, or expansion of your SaaS portfolio. The challenge is to understand the real needs of your users so you’re effectively calibrating their access to key business tools (and by extension your costs).
A common issue is the provisioning of “birthright” apps to all new joiners. This approach has the benefits of consistency and operational simplicity, but it also increases your SaaS spend with every new member of staff. If people are not actually using these birthright apps, though, the result is wasted budget and yet more unused licenses. This is a particular risk in fast-growth technology businesses with rapidly evolving user and technology needs.
SaaS management allows you to take a more nuanced approach, giving employees a clear and easy route to accessing the apps they need on-demand, with no assumptions about what they need on the part of the IT department. This approach has the added benefit that any apps requested by employees – and subsequently left unused – can be deprovisioned automatically.
Tying your SaaS license costs to actual, demonstrable user needs delivers ongoing savings that can be calculated by comparing actual cost to the potential cost of all employees being licensed for a given app. As such, it’s one more way to calculate ROI, and demonstrate the value of your SaaS management strategy to the leadership team.
Going beyond spend management to maximize ROI
To maximize SaaS management ROI in the long term, solutions are needed that can optimize IT operating efficiency as the technology stack and app portfolio become increasingly decentralized.
These kinds of solutions provide long-term cost savings in the following areas:
1 - Savings from increased IT operations efficiency
The right SaaS management solution will have features that reduce manual interventions in IT and user management processes. For example, employee onboarding and offboarding workflows that might currently involve a lot of manual user setup effort and notifications via several different channels can be significantly streamlined. While no SaaS management platform can magically automate everything, there are solutions available that reduce manual setup requirements and harmonize the overall process with centralized tracking and notifications – delivering significant and ongoing savings in the process.
2 - Savings from increased compliance efficiency
Ensuring user access compliance for your enterprise apps can be a costly and time-consuming business, particularly when ownership of some of these tools is decentralized in the organization. The IT operations features mentioned above go part of the way to addressing this challenge. However, the leading SaaS management solutions deliver even greater efficiencies by automating compliance checks and balances to verify, in an auditable way, that processes are being followed consistently. The associated time and cost savings boost long term ROI and also directly support business critical initiatives such as SOC 2 and ISO27001 security certification.
3 - Savings (and peace of mind) from enhanced SaaS security
SaaS management solutions that help you increase app and data security can also provide long-term ROI compared to pure-play spend management solutions. The cornerstone here is uncovering “shadow IT”, which is a perennial requirement that’s easily ignored if you’re only focusing on the apps that cost you money.
The right SaaS management solution will be looking continuously for app usage that deviates from your established policies, and notifying the right people as soon as issues are identified. Monitoring and addressing usage of unsanctioned file sharing tools, or users granting access to sensitive company data in email accounts or drive folders, has huge risk management benefits – and these can be addressed efficiently and elegantly by the right SaaS management solution.
How Trelica can help you deliver more ROI from your SaaS investments
Trelica’s holistic approach to SaaS management helps you maximize your ROI, from tactical spend optimization quick wins through to ongoing efficiencies. We deliver longer-term time and cost savings by automating and standardizing common SaaS operations tasks, allowing you to do more with less and achieve significant IT operations efficiencies.
To discover more about Trelica’s comprehensive SaaS management capabilities, and the benefits for long-term ROI generation, check out our solution features. You can also request a free trial directly below 👇, or use the ‘book demo’ button above to contact the Trelica team.