In today’s fast-paced business environment, scalability and efficiency are paramount. Software as a service (SaaS) solutions have become a cornerstone of efficient operations for scaling businesses. Offering readily accessible and adaptable software, SaaS empowers businesses of all sizes to streamline operations and achieve their goals.
From sales tools to project management software, companies now use an average of 130 SaaS applications to streamline various aspects of their work. However, this rapid adoption of SaaS can lead to unforeseen challenges that hinder growth.
Let’s explore three common issues businesses face with SaaS and how to tackle them.
1. Data security in a multi-vendor environment
Trusted suppliers usually have plans to recover your data and backup options to keep it safe. But, if you’re dealing with many suppliers for tools, your data might not be as secure on their platform. Unexpected events, like data breaches or other issues, can put your sensitive information at risk, making you responsible for any data loss. This could lead to financial losses or legal expenses for your business.
Solution: Implement safeguards and set vendor expectations
The company software owner plays a crucial role in safeguarding data by:
- Establishing a robust recovery and backup plan for data restoration in case of unforeseen events.
- Securing service-level agreements (SLAs). These formal contracts with vendors clearly outline their service provision, maintenance obligations, and data protection responsibilities.
Even with reliable vendors, a comprehensive SLA serves as a safety net, outlining the expected services, data protection measures, and maintenance provisions. This clarity minimises ambiguity and empowers you to address any potential issues effectively.
2. Cross-departmental SaaS duplication
When a company adopts multiple SaaS tools that do the same job, it’s called SaaS duplication. This often happens when different people in the organisation, often departmental heads, have the authority to purchase software and create their own workflows and processes. This can result in the acquisition of multiple tools serving the same purpose.
For instance, if one team subscribes to Asana for project management, but another is using Trello, it creates SaaS duplication. When multiple tools within an organisation address the same task, fragmented workflows and decreased productivity ensue.
Solution: Gain total visibility over your SaaS stack
To prevent duplication, it’s essential to have a clear view of your entire SaaS stack and how software is used across the organisation. Metrics that are crucial to track include:
- Subscribed applications
- Number of licences held for each application
- Price per licence, billing frequency, and annual expenditure
- Renewal dates and termination periods
- Function of each application and which teams use it
By monitoring these factors, procurement teams can identify and eliminate unnecessary subscriptions, streamlining workflows and optimising resources.
3. Wasted spend due to underutilised licences
In addition to the costs associated with duplicated SaaS, underutilised or unused subscriptions can easily slip through the cracks. These dormant subscriptions drain budgets and offer minimal returns. Research suggests that nearly a third of SaaS spending falls into this category.
Solution: Regular reviews and right-sizing through application rationalisation
Again, having full visibility over your organisation’s SaaS stack is crucial here. It’s important to establish a policy where procurement teams consistently assess the company’s SaaS usage and contract terms. This proactive approach allows you to:
- Identify apps that are no longer used or having low adoption and engagement rates
- Adjust subscriptions or terminate them entirely if deemed redundant
- Renegotiate contracts to seek more suitable terms, such as reducing licences or bandwidth allocation to align with your current needs.
By doing so, the organisation can effectively identify when applications are underused or no longer necessary, allowing for adjustments to the software portfolio and ultimately helping to reduce the impact of wasted SaaS spend.