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Global Work Glossary

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Table of Contents

Why do companies need SaaS management?

What is the SaaS management lifecycle?

What are the key components of SaaS management?

What are the risks of poor SaaS management?

What are the metrics for evaluating SaaS management effectiveness?

What are the stakeholders in SaaS management?

SaaS management for global hiring and remote work

Improving employee experience through SaaS management

Leveraging Deel IT for SaaS management

What is SaaS Management?

SaaS management refers to the process of managing and optimizing the acquisition, deployment, usage, and renewal of software-as-a-service (SaaS) applications within an organization, across localized and remote devices.

SaaS management includes:

  • Acquisition and deployment of SaaS tools
  • Monitoring and controlling usage
  • Managing costs and licenses
  • Ensuring security and compliance
  • Optimizing integration with existing systems
  • Evaluating performance and ROI
  • Handling renewals or terminations

Effective SaaS management helps organizations streamline operations, reduce costs, mitigate security risks, and align software usage with business objectives.

Why do companies need SaaS management?

According to Statista, the average number of SaaS applications used by a US organization in 2023 was 112. There was a slight contraction in SaaS expenditure from the all-time-high of 2022 (130 apps), but this still demonstrates an increasing reliance on such systems, underlining the importance of effective SaaS management.

SaaS management within a company or organization fulfils a range of important roles. These include:

  • Ensure efficient tool usage: SaaS management minimizes redundancies, controls costs, and ensures all tools contribute to business objectives.
  • Mitigate risks: Proactively addressing security vulnerabilities, shadow IT, and compliance gaps.
  • Empower teams: Providing employees with the tools they need to perform effectively while minimizing tool overload.
  • Optimize costs: Identifying underutilized tools, avoiding auto-renewals for unused software, and negotiating better vendor terms.

By centralizing the oversight of SaaS tools, organizations can align their software investments with their operational and strategic goals. SaaS subscriptions can easily mount up to a substantial monthly outlay; ensuring they are being used properly is a cost-effective way to reduce expenditure and improve process efficiency.

What is the SaaS management lifecycle?

SaaS management isn’t simply about looking after an existing slate of software tools. It spans the full lifecycle of an application within an organization, including:

  1. Procurement: Identifying and acquiring the right tools to meet specific business needs. This entails regular research and the assessment of competing products.
  2. Onboarding and deployment: Provisioning licenses and ensuring seamless integration with existing systems. A SaaS manager will need to know who requires access, whether the product is used remotely, how many “seats” are provided within a given pricing tier, and how the software will communicate with existing platforms such as CMS and customer databases.
  3. Usage tracking: Monitoring application usage to assess value and identify underutilized tools. The SaaS manager will need to employ a metric for cost effective usage such as number of person-hours per month the SaaS tool is accessed.
  4. Maintenance and compliance: Keeping tools updated and compliant with regulatory requirements. This will include scheduled updates and software patches to fix bugs and incorporate new features. Some systems allow for bespoke amendments made by the manufacturer in response to client feedback.
  5. Renewal or decommissioning: Managing subscription renewals and securely retiring unused tools. The SaaS manager will need to populate a calendar of renewal dates and subscription expiries.

What are the key components of SaaS management?

As well as spanning a wide range of activities within the lifecycle of each SaaS product, good SaaS management incorporates oversight in multiple domains, including:

  • Inventory management: Maintain a centralized list of all SaaS tools and the devices upon which they are deployed, including their purpose, users, and costs.
  • License management: Avoid over- or under-licensing by ensuring compliance with vendor agreements.
  • Usage monitoring: Evaluate how tools are used to identify inefficiencies or opportunities for consolidation.
  • Cost optimization: Eliminate redundancies, negotiate pricing, and reallocate budgets effectively.
  • Security and compliance: Protect sensitive data and ensure adherence to privacy regulations like GDPR, HIPAA, and SOC 2.
  • Renewal management: Track subscription dates to prevent service disruptions or unintended auto-renewals.

A company’s SaaS stack can be thought of as the veins and arteries of the organization, a communication network through which data flows. Keeping this nervous system operating smoothly maintains the efficiency and health of the organization at large.

What are the risks of poor SaaS management?

Ineffective SaaS management can lead to several costly and disruptive risks:

  • Shadow IT: According to research by the Everest Group, over 50% of software used in companies comprises unauthorized applications, increasing cybersecurity risks and compliance violations. These unauthorized apps are referred to as “Shadow IT” and reducing this erratic and risk-laden use of software is a primary role of SaaS managers.
  • Cost inefficiencies: Research from Zylo (2023) found that up to 44% of SaaS spend is wasted on unused or redundant applications. All too often such licenses run month-by-month, unmonitored, wasting valuable resources.
  • Compliance violations: Failure to monitor tools can lead to non-compliance with regulations, resulting in fines and reputational damage. For instance, GDPR violations cost European businesses 1.1 billion euros in fines in 2021-22 alone, according to a study by law firm DLA Piper.
  • Data security breaches: Statista revealed that the average cost of a data breach in 2024 was $4.88 million, and unmanaged SaaS tools are a common vulnerability. This risk can be heightened when employees access data sources remotely through unsecured networks.
  • Operational inefficiencies: Employees overwhelmed by too many apps or lacking the necessary tools experience decreased productivity. A recent Forbes article, citing research by Slingshot concluded that many “workplace tools are not addressing the root cause of the problems, and employees want tools that help them work smarter, not harder.”

With SaaS proliferating in the 2020s, the role of SaaS Manager is an essential component of operational efficiency, risk management, and budget oversight.

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What are the metrics for evaluating SaaS management effectiveness?

To gauge the success of SaaS management, organizations can track the following metrics:

  • Application usage: Monitor the percentage of active users per tool. For example, tools with less than 20% active usage may require reassessment. SaaS managers should factor in patterns of usage, and whether users are able to access relevant tools remotely.
  • Cost per user: Divide the total cost of a tool by the number of active users to evaluate its value. This metric is most meaningful when combined with efficiency metrics, i.e., finding out if the cost per user is offset by the value of efficiency gains.
  • Redundancy rate: Identify overlapping tools; consolidating these can save organizations significant expenditure. Intelligent CIO reported that companies are consolidating to 30% of their SaaS spend, since cost per employee of software subs hit an average of $3500.
  • Compliance rate: Ensure all SaaS tools adhere to regulatory standards.
  • License utilization: check what percentage of individual licenses are being used at any one time. Aim for an 80% or higher utilization rate to maximize ROI.
  • Renewal success rate: Track proactively managed renewals versus auto-renewals to minimize unnecessary spending. If possible, flag up renewal deadlines in advance to allow for timely cancellations.

What are the stakeholders in SaaS management?

Outdated, risky, expensive, or redundant software drains resources and budgets, while poor management leads to employee frustration and turnover. Conversely, well-managed SaaS tools enhance efficiency and morale, enabling teams to work smarter.

To achieve this, collaboration across key stakeholders is essential. Here are the main teams and departments playing a vital role in SaaS management:

IT teams

The IT team plays a key role in SaaS management by overseeing the onboarding and offboarding of users, ensuring that employees have access to the tools they need.

They also monitor the technical performance of applications, identifying and resolving any issues that may arise. Crucially, IT teams are responsible for maintaining the security of SaaS tools and assets, protecting sensitive organizational data from cyber threats and ensuring compliance with data protection regulations. This includes refreshing and upgrading remote devices used to access SaaS apps.

Their proactive management of these aspects helps prevent disruptions and safeguards the organization’s digital infrastructure.

HR teams

HR teams are responsible for managing SaaS tools to improve recruitment, increase employee engagement, and shape professional development.

From applicant tracking systems to performance management platforms, SaaS tools must accord with organizational goals while supporting employees in their roles. By assessing the effectiveness of these applications and gathering feedback from staff, HR ensures that SaaS tools contribute to a positive employee experience.

Furthermore, HR plays a key role in promoting adoption and proper usage of these tools, offering training and guidance where needed.

Finance teams

The finance team’s role in SaaS management focuses on tracking spending, ensuring that budgets are adhered to, and maximizing return on investment. The SaaS manager will obtain essential cost and value metrics from such individuals.

Finance works closely with vendors to negotiate favorable contracts, avoiding unnecessary costs from auto-renewals or redundant subscriptions. Additionally, they monitor key metrics, such as cost per user and license utilization, to identify areas for optimization.

By maintaining a detailed overview of SaaS cost, they help align spending with organizational priorities and ensure resources are used wisely.

Team managers

Team managers bridge the gap between frontline employees and strategic SaaS management. They identify and promote the specific tools their teams require to remain productive and efficient.

Having direct access to frontline user experience, they monitor how well current tools meet their teams’ needs and provide feedback to IT and HR.

By taking ownership of their department’s software usage, team managers help to eliminate tool overload, improve workflows, and ensure that SaaS investments directly benefit their teams’ performance.

Vendors

Vendors play a critical role in ensuring the success of SaaS management. The best software providers actively liaise with their clients at all stages in the product lifecycle.

They provide regular updates to keep applications secure and functional, addressing potential vulnerabilities before they become problems. Vendors also assist with compliance by offering transparency regarding their tools’ security features and adherence to data protection regulations.

Vendors act as partners in innovation, introducing new features or integrations that suit evolving business needs. A strong vendor relationship can simplify renewals, improve technical support, and enhance the overall value of SaaS tools.

SaaS management for global hiring and remote work

Global hiring and remote or hybrid work amplify the need for effective SaaS management.

Standardizing software usage across regions ensures consistency, while centralized dashboards enable IT and HR teams to:

  • Provision and deprovision tools remotely.
  • Monitor international compliance, such as GDPR and CCPA.
  • Control costs across varied pricing structures.

To ensure effective growth, companies should seek out SaaS tools that provide remote access and multi-region compatibility, as well as having secure access protocols and compliant data protection measures.

Improving employee experience through SaaS management

Saas tools, primarily, should make their users lives easier. This is a good starting point for SaaS assessment and management. Canvassing user opinion may throw up all manner of operational quirks and vulnerabilities that can shape better SaaS management.

Well-managed SaaS tools can:

  • Enhance productivity by providing the right resources.
  • Reduce frustration caused by tool overload.
  • Support skill development through proper training on SaaS applications.
  • Enable seamless collaboration, especially in distributed teams.

Where SaaS tools fail on any of the above counts, it is always worth reevaluating their purpose and looking for viable alternatives.

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Leveraging Deel IT for SaaS management

Deel IT offers a comprehensive solution to optimize SaaS management, including:

  • Global procurement and vendor management: Simplify acquisition across regions.
  • Subscription tracking: Avoid redundancies and underutilized resources.
  • Compliance monitoring: Automate checks for data privacy laws like GDPR and CCPA.
  • Zero-touch deployment: Seamlessly onboard employees with the tools they need.
  • Lifecycle management: Track subscriptions and renewal dates to maintain efficiency.

Take control of your SaaS environment with Deel IT. Book a demo today to explore how Deel IT simplifies SaaS management for global organizations.