How more SaaS solutions can cause more problems

SaaS Management

Vendr | SaaS solutions
Written by
Vendr Team
Published on
June 1, 2021
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Because of cloud computing, software as a Service (SaaS) is changing how we use business applications today. Instead of downloading or installing software onto our desktop computers (remember CD-ROMs?), we now access apps over the internet using a web browser.

Instead of buying the application, you pay a fee for only as much or as little as you use. In other words, the business process of procuring new enterprise software is easier and more affordable than ever.

Unfortunately, the ease and affordability of obtaining SaaS solutions can also cause some headaches (which we’ll expand on later). But first, let’s talk about why SaaS is so popular.

Why are SaaS solutions so popular?

In a nutshell, SaaS solutions are popular because they’re:

Accessible: You can access SaaS solutions anywhere, as long as you have an internet connection and (nearly any) internet-capable device.

Affordable: SaaS providers can offer lower upfront costs than traditional software download and installation delivery models with little to no customization needed. These inexpensive and usually pay-as-you-go or subscription fee pricing options are especially beneficial for agile software development.

Compatible: Because internet browsers are more standardized than operating systems, SaaS applications can run on virtually any internet-capable device.

Manageable: SaaS models allow organizations to streamline software deployment and better manage the costs of scalable SaaS solutions with multi-tenant architectures without software licenses. In particular, the greatest benefit to you is you don’t need to maintain a costly infrastructure—hardware, network, or storage. Because service providers do all the heavy lifting, you get to enjoy scalability.

SaaS is trending

In 2019 and 2020, we collected data on SaaS spend (billions of dollars) across thousands of companies, from small businesses to large enterprises to compile “71+ SaaS Statistics & Trends For 2020.”

We’ve pulled the most notable trends we think you’ll find intriguing here:

  • The average company uses 137 unique SaaS apps on average, a 30% increase from 2018.
  • Companies use free apps three times more than paid apps.
  • Customers are churning through more than 30% of their SaaS apps every year. And as existing SaaS companies add more features and upgrade their functionalities, customers abandon other apps with similar functions.
  • The unique number of apps in usage per company is up about 30% year over year. In detail, the average small business uses 102 different apps, while each mid-market business uses an average of 137 apps. Moreover, enterprises have, on average, 288 different SaaS apps in use across their businesses.

But more SaaS solutions don’t always mean better results.

More SaaS, more problems: why SaaS sprawl is an issue

The widespread use of SaaS solutions are usually a good thing for business needs. On the one hand, employees feel empowered to buy and use tools to do their jobs effectively. But on the other hand, SaaS usage can get out of control, affecting productivity, spending, visibility, and data security if left unchecked.

We call this SaaS sprawl.


How to keep SaaS sprawl in check with 3 key questions

Keeping SaaS sprawl in check is all about understanding the relationship between your people and your apps. To help you understand these relationships, you must ask these three questions.

1. Who is using our apps?

First, consider who in your organization has access to which apps, starting with your HR workflow. For example, when you’re going through the employee onboarding process, make it a point to grant access to the right apps, just as you’d hand someone a laptop or other equipment when the new team member starts.

Again, as a part of the offboarding process, suspend account access on their last day. Also, if employees change roles, ensure that they’re onboarded and offboarded onto the right tools, so no licenses or subscriptions are left unused.

Second, take an inventory of the external partners and contractors who have access to documents or apps in your organization. Further, check that each person or group has the appropriate permissions to view or edit documents. Also, check that their logins to SaaS apps or systems remain updated if they’re no longer collaborating with your company.

Related: Use this template as a starting point to better, cleaner SaaS organization.

2. Are we using our apps efficiently?

Put another way, how are employees using our SaaS subscriptions? For example:

  • After a month or two of use, are they abandoning them or using only free features? If so, it might be time to downgrade or cancel the subscription.
  • Are there power users that could train other employees on the same tools? Empower them to put on a lunch-and-learn, making SaaS usage efficiency a collaborative task.
  • Are there several SaaS apps used in the same department for similar functions? Maybe you could eliminate one or two of them.

Discovering these types of inefficiencies will help you optimize SaaS spend and ensure the right tools are in place to make your teams perform at their best.

Learn more about “SaaS User Management: How to Track Employee SaaS Usage.”

3. Do we have the right (or any) security policies in place?

The key to establishing a good policy is removing human error from the equation whenever possible. Considering that 86% of people reuse passwords that were already leaked in a data breach, your organization can start with automating password management and requiring the use of two-factor authentication.

According to the Online Trust Alliance study, “90% of breaches are preventable with the right policies in place.”

One more thing to keep in mind: If you pursue any compliance requirements, such as SOC 2, you’ll want to have a plan in place to know who’s accessing which parts of your systems and data, when, and why. This way, if something goes wrong, you can fall back on detailed audit trails.


How to simplify the SaaS chaos with Vendr

Vendr can help you gain critical real-time visibility into the relationship between your people and apps. We also provide tools to take control of SaaS usage and spend across your organization.

In other words, we can help you to surface the apps your teams love to use and some they don’t. Overall, here’s what you can do with Vendr:

  • Discover apps used throughout the entire company
  • Benchmark your SaaS vendor spend and app usage based on your company’s stage with data from thousands of companies. Think of it as “software measuring.”
  • Track your vendor-spend over time by team and department and identify any significant trends.
  • Understand employee tool adoption and usage to make informed purchase and renewal decisions.
  • With OneLogin™, you get a cloud-based identity access management (IAM) providing end-users a secure SSO portal to access all their applications from any device, in the cloud, and on-premises.
Vendr Team
Vendr's team of SaaS and negotiation experts provide their curated insights into the latest trends in software, tool capabilities, and modern procurement strategies.

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