November 14, 2016
While the old saying “do it once and do it right” may be worth something in a variety of other scenarios, evaluating and monitoring a SaaS technology stack is not one of those. In fact, CIOs and IT leaders must constantly be evaluating their SaaS tech stacks on at least a monthly, if not a more regular basis, and certainly must not have the “one and done” mindset. According to Cisco research, the average enterprise now uses more than 1,200 individual cloud services across multiple departments. At that level, companies may need to evaluate their technologies on even a weekly basis to ensure there isn’t oversight of spend or utilization, and to keep employee feedback and sentiment of each application top of mind.
What is the reason that organizations must go through such regular, comprehensive evaluation of their SaaS technologies? Why doesn’t a once-a-quarter audit cut it? What should company executives and leaders look for when evaluating their SaaS technology stacks? What are the risks if they don’t? Let’s explore those questions and more:
Regular SaaS Audits Are a Non Negotiable
SaaS usage is at an all-time high for organizations—especially enterprise organizations that may have hundreds (if not more) subscription-based SaaS applications being utilized across departments and employees.
While new technologies and SaaS products are being introduced to the market more rapidly than ever before, executives are purchasing these tools and implementing them at a faster pace, too, due to the value they see in each new platform or tool. Take this staggering statistic from a recent Gartner report:
“Cloud application services (SaaS) is forecast to grow 20.3 percent in 2016, to $37.7 billion. As software vendors shift their business models from on-premises licensed software to public cloud-based offerings, this trend will continue.”
And often times, CIOs and IT executives aren’t even aware of all of the solutions employees are using or purchasing via credit cards. Decisions to move forward with renewals and upsells of SaaS subscriptions are often made at the department level within their respective budgets, creating a disparate view at the top level. Those subscription costs, whether $99/month or $500/year, add up quickly—especially when multiple employees or teams across the organization may be purchasing the same subscription as other teams without their knowing, causing redundancy and potential overlap in unnecessary features.
Employee Sentiment Is a Critical “Must Watch” Factor
Employees have strong opinions about the applications they use on a daily basis. Often times, SaaS applications are their “home base”. Email aside, it’s likely team members live in certain apps for most of their work days. Sales reps have strong opinions about the CRM they are asked to use, marketing has strong sentiment towards automation tools, HR has opinions about talent software, and so on across the entire organization. Those employee sentiments can quickly add up to either mounting frustration, or satisfaction which leads to utilizing an application to its full potential.
Organizations that don’t constantly monitor their SaaS tech stacks may have disgruntled employee sentiment towards certain applications, spend more by not receiving discounted enterprise pricing, have overlapping and often unnecessary technologies, see a spike in underutilized licenses, increase their security risks, and have a difficult time budgeting for future projections. On the other hand, organizations that unlock employee sentiment and put it to use when evaluating their current SaaS solutions not only gain employee trust, but ensure that applications are used in the way they were originally intended.
What to Look for When Evaluating SaaS Tech Stacks
When evaluating SaaS tech stacks, there are several factors that should also be considered to help alleviate the pains mentioned above. What are the questions an organization should be able to answer at any given time? Here are a few that CIOs and IT departments must consider:
What is the total cost spent on SaaS applications each year as an organization? How much was budgeted and how much represents Shadow IT?
What is your utilization of SaaS (in terms of usage or licenses) across the organization and department?
How do employees like (or dislike) using each of the SaaS applications? What is their overall sentiment?
Are there specific SaaS products that are used across various departments that could be rolled into a master agreement?
How should your company be allocating budget for next quarter, next year and beyond?
Risks for Organizations That Don’t Evaluate SaaS
CIOs and IT departments that only evaluate their SaaS tech stacks on a quarterly or even annual basis could be blind-sided—or completely unaware—of how their organization is purchasing and using technology. Without a proper handle on what SaaS applications are being used, how can CIOs and IT teams obtain real-time visibility in order to proactively roll one-off agreements into a master agreement, view spend and utilization in its entirety, and have a grasp on what employee think about each SaaS application?
CIOs and their respective teams have a big task: to keep up with the changing landscape both externally, and perhaps more challenging, internally. If an organization fails to keep up-to-date with its own internal SaaS usage to truly understand how departments and employees are engaging (or are not engaging) with technology, then how are they expected to make the right decisions for the business?
Leverage a SaaS Optimization Platform for Real-Time SaaS Information
With so many new subscription-based applications being added into a single organization on almost a daily basis, executives need a new way to manage SaaS and gain complete visibility. And not just quarterly or annual visibility that an ad hoc audit provides.
Without insight into how SaaS applications are being used and how they are performing in real-time, how can CIOs and IT departments ensure that their SaaS tech stack is what it needs to be both now and in the future? And not only that, identify how employees perceive the value of each application so applications are fully utilized?
Organizations that are ready unlock the full potential of their SaaS utilize a SaaS optimization platform, giving them access to an online command center for all cloud-based software used across the organization. A platform such as this provides visibility into what software is used and how it’s perceived by employees in terms of value and sentiment, how much is spent, and how to optimize cloud software investments.
About the Author
Eric Christopher is co-founder and CEO of Zylo, the leading SaaS optimization platform that transforms how companies manage and optimize the vast and accelerating number of cloud-based applications organizations rely on today. Eric launched the company in 2016 with 16 years of sales and management experience in the SaaS space, including his recent position as SVP of Sales at Sprout Social in Chicago.
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