You might be spending more than you should on your Software as a Service (SaaS) applications. Redundancies, unused licenses and assumption-based purchasing decisions make managing your SaaS applications a messy, and costly, experience.

Organizations are moving toward a cloud-first mentality when evaluating new applications. In fact, 50% of new applications adopted in 2017 are expected to be composed of SaaS solutions.

However, without the right usage data to show the true cost and value of SaaS applications (ex. unit rate), organizations are losing money year-over-year to unnecessary expenditures and inefficient license and contract negotiations.

Reigning in your SaaS application portfolio management requires a shift from assumption-based purchasing to data-driven, consumption-based purchasing.

Understanding usage trends will maximize the value of your current subscriptions (ex. moving licenses from one department to another based on changing business demand); and it will provide supporting data for planning out future years (ex. high/low usage requires more/less licenses at contract renegotiations).

SaaS portfolio management fails without the right data

Siloed operational and financial data drives wasteful SaaS portfolio management. Application and service owners have usage data and vendor owners have contract and cost data. Only in combination do you see how usage drives cost. Without breaking the data silo, business stakeholders can’t determine if demand for SaaS capabilities is satisfied by the current portfolio or if new capacity is needed.

Consequences of wasteful SaaS portfolio management

  • Poor view of SaaS portfolio usage hides cost trends from cost center owners
  • Over-purchasing leads to waste or under-purchasing doesn't optimize price per SaaS license
  • Lack of visibility into usage data results in allocated but unused licenses
  • Disconnect between cost and usage limits negotiation leverage with SaaS vendors.

A SaaS portfolio management solution must automatically extract SaaS financial and operational data and deliver calculated metrics to show the cost, adoption and usage of SaaS solutions. 

5 must-have capabilities for SaaS portfolio management

  1. Aggregate SaaS spending by vendor, product, and license type
  2. View accurate measures of cost per license
  3. View SaaS licensing costs with appropriate burdening
  4. View SaaS license usage by license type, user, and group
  5. View SaaS utilization by service and user

Vendor and application owners are asked to provide oversight on the usage and cost of SaaS applications, but without the ability to combine operational and financial data, vendor managers are unable to optimize SaaS license purchases based on demand/usage.  And application and service owners can’t understand the burdened SaaS application total cost of ownership.

Download Right-size Your SaaS to Optimize Cost and Utilization to find out more about the capabilities you need to face the challenges of SaaS portfolio management.