IT vendor management: A guide to managing and scaling SaaS
Discover the ultimate guide to IT vendor management and SaaS optimization. Learn how to streamline operations, enhance security, and maximize efficiency in your organization.
It’s no secret that businesses are increasingly relying on technology to drive operational efficiency, innovation, and growth. This dependence on technology necessitates an effective IT vendor management system, a critical aspect of a successful IT infrastructure.
IT Vendor Management is a strategic process that involves selecting, managing, and overseeing third-party vendors providing IT products and services. Key functions include vendor selection, contract negotiation, performance evaluation, risk management, and relationship management.
Effective IT vendor management offers many benefits to businesses. It enables cost savings by negotiating favorable contracts and ensuring efficient use of resources. It improves service quality and delivery through constant performance monitoring and feedback. Moreover, it mitigates risks associated with vendor-related issues, such as non-compliance, security breaches, and service disruptions.
However, managing IT vendors can be a challenging task. Businesses often struggle with keeping track of multiple vendors, monitoring their performance against agreed-upon service levels, and mitigating risks, such as contractual breaches and data security issues. This is where our ultimate guide to IT vendor management comes in.
Whether you're a seasoned IT manager or a business owner looking to improve your IT infrastructure, this guide will equip you with the knowledge and tools to effectively manage your IT vendors.
Why software asset management (SAM) matters to it
In an era where digital evolution is driving business growth, organizations are increasingly reliant on a myriad of software and hardware tools. As IT and procurement leaders, you understand the challenges that accompany this expansion - managing a growing inventory of assets across different departments, maintaining visibility and control over your software suite, and ensuring optimal security and compliance.
Navigating these challenges requires more than just spreadsheets and manual tracking systems. They demand a modern, scalable solution that can streamline and centralize your vendor management efforts. This is where a vendor management platform becomes not just a tool, but a strategic ally.
A robust vendor management platform does more than simply track your IT assets. It empowers you to effectively manage, scale, and optimize your software stack. It provides a centralized source of truth for every piece of software and hardware in your organization, enabling you to efficiently provision, de-provision, and utilize assets. Moreover, it plays a pivotal role in facilitating SOC 2 compliance activities, a paramount concern for any IT leader.
But how do you leverage a vendor management platform to its full potential? Here are some specific and actionable strategies:
Centralized asset repository
Create a unified and up-to-date repository of all your IT assets. This will enhance visibility and control, making it easier to track, manage, and optimize your assets.
Automated provisioning and de-provisioning
Automate the provisioning and de-provisioning of assets based on user roles and lifecycle events. This will reduce waste and ensure efficient utilization of resources.
Use the platform's built-in features to facilitate SOC 2 compliance activities. Regularly monitor and audit your assets to identify and mitigate compliance risks.
Collaborative vendor management
Foster collaboration between your IT and finance teams. Shared access to the vendor management platform can streamline budgeting, cost tracking, and contract management.
By the end of this guide, we'll delve deeper into these strategies and explore how a vendor management system can augment your IT Asset Management (ITAM) practices. We'll also discuss how it can automate software and hardware management, and foster a collaborative approach to vendor management between your IT and finance teams. This knowledge will equip you with the practical insights needed to transform your vendor management process, ultimately driving efficiency, security, and growth in your organization.
SaaS Vendor Management as Part of ITAM
With the proliferation of SaaS applications in recent years, it has never been more critical for IT to harmonize software procurement and management with the overarching IT Asset Management (ITAM) strategy.
Effective vendor management plays an instrumental role in organizing purchasing data, enhancing decision-making, and realizing cost savings.
The biggest concerns for IT teams
IT teams bear substantial responsibilities, from managing infrastructure to safeguarding against threats while demonstrating trustworthiness to external stakeholders such as business partners and customers. Therefore, it's unsurprising that the three most prominent concerns for IT managers in are visibility, access control, and security compliance.
Visibility into IT resources
Inadequate visibility into available resources presents a considerable challenge for IT teams. The lack of granular visibility hampers capacity planning, employee onboarding, resource management, and forecasting. This lack of visibility is exacerbated by the growing number of unique billing owners within an organization.
How vendor management helps
Centralizing the purchasing process and involving IT in software approval ensures visibility and control over the technology stack. This approach allows individual stakeholders to identify and evaluate software while ensuring a high level of visibility for the IT department.
Access control of applications
In an era of interconnectivity, maintaining stringent access control is an ongoing challenge for IT. The challenge extends beyond individual user access, requiring IT to comprehend and manage how third-party systems communicate, transmit, and secure critical data.
How vendor management helps
By maintaining a contract record that outlines how specific suppliers handle data, organizations can prevent breaches and investigate incidents effectively. A centralized and collaborative SaaS approval process also enhances vendor selection, ensuring suppliers meet minimum security requirements.
Compliance with SOC 2
Demonstrating highly secure systems and practices is imperative. For companies seeking partnerships with enterprise organizations, SOC 2 compliance is a prerequisite. Lack of SOC 2 compliance can lead to significant time spent responding to security inquiries and requests for documentation, potentially hindering sales processes.
How vendor management helps
A centralized source of truth for compliance information streamlines SOC 2 audits and reduces the time spent on preparing for audits. Vendor management software centralizes relevant data, offering auditors a high level of visibility into supplier compliance data, information storage, and security protocols. Effective data management enables IT to spend more time on enhancing the organization and less time on compliance verification.
The hidden costs of informal IT practices
Combatting SaaS waste
Unstructured IT practices often lead to wasted resources, such as unused software licenses, which can cost companies a significant amount of money. In fact, businesses worldwide spend an average of $135,000 per year on services that go unused.
To avoid wasting your budget, be proactive. Use an IT Asset Management (ITAM) system to track your software licenses and find unused or underutilized ones. This way, you can cut unnecessary expenses and optimize your IT budget.
Inefficient provisioning and de-provisioning
Without a smooth process for setting up and removing employee access to necessary apps and services, onboarding and offboarding can be a huge hassle, wasting time and resources.
To solve this issue, you need clear procedures for giving and removing access to linked systems. Using automated tools for provisioning and de-provisioning can save time and effort, making transitions smoother for new and departing employees while keeping security top of mind.
Escalating cybersecurity risks
Cybersecurity threats, whether originating internally or externally, pose a serious challenge to IT professionals. The global instances of data breaches, ransomware attacks, and other security threats continue to surge. These attacks could have been prevented with thorough due diligence, stringent security compliance checks for third parties, and robust access control protocols.
Effective vendor and user management practices are key to mitigating these risks. A comprehensive vendor management platform can provide visibility into third-party security practices, while robust user management protocols can prevent unauthorized access to your systems. Adopting these practices can significantly reduce your cybersecurity risks.
Empowering IT teams with SaaS management
A robust SaaS management strategy empowers IT teams to transition from reactive to proactive roles, enabling positive organizational change and growth.
Key benefits include:
Better budget optimization
Vendor management software eliminates conditions that lead to IT budget overruns, focusing on deduplication, license utilization, and reduced cost per license.
Deduplication of SaaS tools
Reducing redundant contracts and tools streamlines the technology stack and reduces monetary waste.
License and asset utilization
Having a clear view of available licenses ensures you have enough without costly surpluses. Automation helps understand license utilization rates for each tool, identify abandoned licenses, and right-size software assets.
Reduced cost per license
Streamlining contracts and tools allows for volume pricing, resulting in lower costs per license for essential tools.
Easier software selection and evaluation
Maintaining a clear view of the software portfolio streamlines usage analysis, spend evaluation, and supplier benchmarking.
Improved cross-departmental communication
Vendor management promotes alignment between Finance and IT, enhancing visibility, security, compliance, and overall efficiency.
Getting Started with SaaS Management
Transitioning to an automated vendor management system may appear intimidating, but it offers substantial cost savings and improved control over software assets. Here's how to get started:
Identify key applications
Start by identifying the most commonly used software tools, both department-specific and organization-wide.
Analyze upcoming projects
Review your current SaaS stack for upcoming renewals, expansions, or new purchases.
Designate a point person
Successful SaaS management requires collaboration between IT, Procurement, Finance, and departmental stakeholders. Appoint a champion to centralize information and facilitate this collaboration.
How Vendr can help IT manage your SaaS stack
Vendor management offers an efficient approach to managing software assets, reducing costs, and facilitating business scalability. By embracing modern tools and practices, organizations can achieve better visibility, security, and compliance.
Ready to optimize your IT and software management? Explore how Vendr's SaaS management and buying platform can save you time and money. Take your IT management to the next level by harnessing the transformative power of vendor management.