Read on about all the ways a vendor management system can improve your overall IT Asset Management (ITAM) practice, the benefits of taking an automated approach to both software and hardware, and an overview for Finance and IT teams ready to collaborate on implementation.
Organizations aiming to grow need the right tools to be successful. However, an ever-expanding portfolio of tools, apps, services, and physical assets can take on a life of its own.
SaaS alone represents a huge growth vector. The average company uses 137 unique SaaS apps — a 30% increase from 2018. Overall spending on these services has grown 50% in just two years. And this is to say nothing of onboarding and offboarding users (which include changing permissions and workflows), shifting suppliers over time, and guarding against maverick spend and its associated risks.
Complicating this is the fact that, in many organizations, software and hardware procurement is spread out across individual departments and not regularly monitored. This decentralization handicaps IT, reducing its control over the selection, evaluation, and security of the systems it’s responsible for.
If you manage SaaS in spreadsheets, you will hit a tipping point of unmanageability. IT needs a better way to organize and utilize its software and hardware. Scalable SaaS management calls for next-generation tools to ensure stack visibility, reduce waste, and ensure data security.
This is where a vendor management platform comes into play. Using a centralized source of truth, IT can:
This guide outlines the ways in which a vendor management system can improve your overall IT Asset Management (ITAM) practice, the benefits of taking an automated approach to both software and hardware, and an overview for Finance and IT teams ready to collaborate on implementation.
By the end of this guide, you’ll know if and when this approach is right for your organization, and how to get started.
With the proliferation of SaaS over the last few years, it’s never been more important for IT to streamline SaaS discovery, SaaS adoption, and SaaS operations. Managing SaaS licenses and administering access to interconnected systems is just as important to your overall management practice as physical asset control.
And as SaaS use grows and the balance between hardware and software purchasing shifts, effective vendor management helps organize purchasing data and processes for better decisions and more savings.
IT carries a heavy organizational weight on its shoulders. Not only must IT teams successfully implement and maintain infrastructure and physical assets, they also need to safeguard against the rising potential for threats, while simultaneously demonstrating a high level of trustworthiness to external stakeholders like business partners and customers.
Therefore, it should come as no surprise that the three biggest areas of concern for IT managers are visibility, access control, and security compliance.
Visibility is one of the most complex and persistent problems IT teams face in trying to manage assets. When teams lack granular visibility into available resources, they are at a disadvantage in terms of capacity planning, employee onboarding, resource management, and forecasting.
This lack of visibility is due in part to the increasing number of unique billing owners within an organization. Small companies average 10, and enterprise companies may have as many as 100.
What’s more, shadow IT (also known by the associated term “maverick spending”) is on the rise, with one study reporting an 8% rise in occurrences of unsanctioned SaaS applications use. These rogue application installs are difficult to detect—until they cause a reportable security incident or show up on a corporate credit card audit.
One report estimates that 75% percent of CIOs anticipate an increase in cybersecurity involvement over the next year. Visibility will play a huge role in the success of cybersecurity initiatives.
With increasing software use and interdependencies, maintaining strict access control is another ongoing IT challenge. The issue goes beyond single-user access, requiring IT to understand and manage how interconnected systems of third parties communicate, transmit, and secure critical data. Issues with the security of one software tool have the potential to jeopardize data across multiple departments and systems. Yet nearly half of organizations find it a challenge to track third-party compliance.
Being able to demonstrate highly secure systems and practices is critical. For companies pursuing partnerships with enterprise companies, SOC 2 compliance is table stakes. Without it, IT will spend considerable time responding to security questions and requests for documentation, which is a burden for all parties involved—it can even prevent sales teams from closing deals on time!
SOC 2 compliance also signals that customers and end-users can have a high degree of confidence in your services, making it not just an IT objective, but a priority for the entire organization. It’s important enough that 68% of companies prioritize threats according to the potential cost to the business. The impact they fear most is loss of data and negatively affecting customer relationships.
As IT has grown into a dynamic and integral management function within organizations, the stakes have increased. While IT enjoys more authority over business outcomes, it also becomes more responsible for the business impact of negative outcomes. This means that the process behind administering software and assets must necessarily become standardized and codified. There is no room for informal IT in a growth-minded organization.
The biggest challenges for IT teams include:
The right SaaS management approach relieves many of the frustrations and challenges facing modern IT teams, allowing them to move from reactive to proactive, driving positive organizational change and growth.
Freed from the cycle of chasing rogue assets, negotiating access issues, fending off security breaches, and responding to audit information requests, IT can serve as a change agent and help the entire organization achieve important efficiencies, such as:
Vendor management software can eliminate many of the conditions that lead to IT budget overruns and capacity planning difficulties.
Three areas where IT can save money and effectively plan future use:
Maintaining your tech stack in a SaaS management tool means you always know what tools are currently in use. Having a clear view of your portfolio makes it easier to increase usage within current suppliers, conduct SaaS spend analysis, and perform a competitive evaluation of potential new suppliers.
As part of the supplier lifecycle, IT can use automated renewals to evaluate suppliers at the close of every contract term using available benchmarking and buyer data. By incorporating evaluation into the process, IT can stay on top of changing supplier pricing and ensure the best terms and pricing over the long term without investing hours in tedious research.
Stack management works best when you have cross-departmental alignment on SaaS buying and contract and license management. It enables Finance and IT to make collaborative decisions about the projects they pursue, and the software and tools used to do it. Most important, it eliminates the information silos that lead to wasted SaaS spend, security risks, and reduced productivity.
Improving departmental alignment leads to many positive business outcomes, including:
Many IT departments suffer in silence with spreadsheets because of the perceived cost efficiency of an easily accessible, manual process.
In most cases, investing in an automated vendor management system for SaaS can result in considerable net savings for the organization. In fact, organizations that use a vendor management tool to buy software realize savings of up to 25%.
Another common obstacle to the automation of SaaS management: perceived difficulty in migrating. It can be intimidating to move to a new platform when IT is already struggling to gain visibility into its current software and assets. However, with the right process, migrating to a SaaS management platform can be a relatively quick, manageable process that results in immediate savings.
Begin your journey to better SaaS and compliance management in three steps:
Vendor management is a powerful way to stay on top of the software your company is using (or isn’t), save money on your bottom line, and effectively scale your business.
See what Vendr’s SaaS management and buying platform can save you–both in time and money.