SaaS management strategies to maximize the ROI of your SaaS tools
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Software-as-a-service, or SaaS, has turned business software consumption on its head. Where powerful programs once cost a fortune for companies and had to be purchased sparingly, modern SaaS pricing have enabled businesses to access low-cost solutions through subscription methods like “pay-per-month” or “pay-per-use.”
The only problem? The barrier for entry is deceivingly low for a SaaS management platform. For example, many SaaS providers offer a free trial tier which then becomes a paid, auto-renewing subscription if not canceled. This causes businesses to bite off more than they can chew, lose track of those they’ve previously purchased, and end up with SaaS sprawl.
The result? Unforeseen, sky-high monthly bills and a less-than-efficient solution stack from a SaaS provider, as well as limited application usage. So, how do you manage your SaaS tools for optimal functionality and cost savings?
3 SaaS management tips to maximize ROI
The goal of SaaS management is to develop a policy for onboarding SaaS tools, assess which tools fit your business needs, and fully utilize the tools you have to optimize and augment decision-making processes across your business.
1. Gain full visibility of your current software stack
Managing your portfolio of SaaS applications starts with seeing exactly what you have in your cloud based software stack and in what capacity. That means having a clear picture of the following information and updating it in real-time:
- All the existing SaaS tools across the company
- Subscription frequency and cost of each tool
- How much you spend on each product
- All software license holders
- The functionality of your SaaS subscription management across departments
- Automatic renewal dates
- The pricing structure and renewal terms of all products
- Any minimum user tiers, product usage tiers, or monthly minimums
Here’s why having this information on hand—and updated in real-time—is crucial for your financial well-being:
- Awareness of license holders helps you identify and prevent over-licensing. In enterprise companies, there’s often auto-renewing licenses from personnel that no longer work for the company—or, similarly, under-used licenses in departments that don’t need that product. You should only pay for cloud based software your employees are actually using.
- Having a top-down view of SaaS features helps you tackle feature overlap and pinpoint duplicate subscriptions, ensuring more efficient use of SaaS spending.
- Awareness of all renewal dates and billing details helps you avoid surprise billings.
Full visibility over all parts of your company is necessary for an effective financial strategy—SaaS spend is no exception.
2. Track vendors in real-time to avoid “SaaS creep”
SaaS products are far too easy to acquire by employees—and just as easy to bill to the company. As unapproved SaaS purchases “creep” into your software stack and rack up your vendor spending, your only defense is to catch them as they happen. Waiting until the end of the month or quarter is too late.
That’s why the only way to track vendors is to monitor them in real-time.
Real-time vendor spend analysis and management allows you to:
- Avoid “SaaS Creep,” or the rapid (and sneaky) proliferation of SaaS products under the nose of the IT department. Real-time tracking helps you identify new purchases as soon as they happen and stop unapproved SaaS spending before it hurts your bottom line.
- Identify cost-saving opportunities proactively by cross-checking SaaS purchases across all employees and departments. This way you never miss on bulk licensing opportunities and deals.
- Stay on top of crucial license, policy, and software changes, so you can ensure optimal software functionality and speed at all times.
- Have access to all vendors and contract owners in one place to avoid data leaks from undetected SaaS procurement.
The right SaaS tools management software will enable real-time vendor management through functionality like:
- Setting controls on SaaS spending per line of credit.
- Locking payment methods to prevent unauthorized purchases.
- Notifications when SaaS (or any vendor) spend increases.
- Integrating with company-wide messaging platforms to allow for immediate purchase approval and rejection with SaaS usage.
- Automating the SaaS procurement process by sending instant alerts to administration when teams try to purchase new SaaS apps or features.
3. Streamline SaaS-tool adoption by establishing key decision-makers
When each employee is solving minute problems with individual SaaS purchases, integration and steep learning curves can make SaaS adoption inefficient and costly. With inconsistent APIs and difficult-to-integrate software, a lot of SaaS spending—and employee time and energy—is wasted.
Proper vendor management means centralized control of SaaS procurement across departments. That includes centralized decision-making. Here’s why:
- API consistency – Having an open line of communication between the IT team and department heads allows you to maintain consistency in software APIs for optimal compatibility. As a simple example: Instead of having Sales use Trello for their organization and Marketing use Asana, you can create a company-wide consistency for cross-department efficiency and utilize bulk pricing for SaaS spend optimization.
- Software learning curves – It takes time and resources for an employee (especially if it's a team of employees) to get comfortable with a new product. What good is top-of-the-line software if people don’t know how to use it? The key decision-maker should evaluate software choices and choose one that integrates well with current teams’ knowledge base.
- Communication with IT – When key decision-makers are clued into new SaaS purchases, they can make better decisions for their teams. For example, department heads can work with the IT and finance team to approve SaaS purchases that align with their team’s existing skill set, integrate well with their current software stack, and make sense for your bottom line.
In all these points, there’s one ubiquitous factor: establishing a key decision-maker. Instead of having employees pick and choose software, department heads should control SaaS subscriptions and adopt new software that aligns with current workflows seamlessly.
Why companies of all sizes need SaaS management
When your workforce is small enough that you know all your employees by name and don’t require departmental structure, it’s easy not to see SaaS creep for the threat it is.
However, vendor management is as vital for small operations as it is for enterprise companies.
If SaaS procurement isn’t controlled from the beginning, efficient spending, strong security, and software adoption can quickly become unruly. If you want to grow your company and meet your full potential, you’ll need a SaaS management solution that can scale as you do.
Here’s why small businesses need SaaS management software now:
- Allows you to get the best deals on SaaS subscriptions from the get-go.
- Ensures you are acquiring the right licenses for the right people.
- Helps you maintain compliance and bolster cybersecurity as you expand.
- Refines your SaaS spending early on, so you’re never overpaying vendors or wasting money on redundant software.
Why SaaS management is key to scaling your operations
As your company grows, single-member teams transform into whole departments and employees turn from familiar faces into names on a roster. In other words, your visibility into your company decreases significantly—opening the floodgates for SaaS creep and overspending.
Once you have a variety of separate teams and departments like sales, R&D, HR, and IT, you’ll need centralized control over SaaS procurement more than ever. SaaS tools management avoids double-dipping in software subscriptions and redundant point solutions.
Don’t neglect the benefits of seeing and controlling your SaaS solutions in real-time—even tiny pay-per-month bills can become exponential burdens when they’re expensed without your knowledge.
Let Ramp handle your SaaS
With Ramp, you don’t have to manage your SaaS stack alone. Our Vendor Management platform gives you a single view of all of your vendor details and contracts. Ramp users can upload contracts automatically to the platform, which will then extract key details from SKU numbers to start and end dates. This makes it easier to analyze your spend and discover new insights..
Here’s how you can leverage Ramp to manage your vendors:
- Track your SaaS spending as you grow so that you’re never in the dark about how much you spend on a given vendor over time.
- Banish SaaS creep by keeping track of all vendors and contract owners in a single easy-to-read dashboard, all while updating them in real-time.
- Keep an eye on your upcoming spend by identifying active subscriptions, their owners, future payments, and expected costs.
Check out Ramp today and see how you can enhance your business.
Download our ebook to learn how to reduce the cost of your SaaS tools: