IT Leader’s Guide to Optimizing SaaS Operations

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Managing SaaS operations effectively requires IT leaders to strike a balance between resource optimization and operational efficiency. Streamlining SaaS management not only enhances performance but also improves user satisfaction and ensures alignment with business objectives.

This guide provides actionable insights to help you assess, refine, and elevate your SaaS operations, ensuring your organization maximizes value from its software investments.

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TL;DR

• IT leaders face challenges like lack of visibility, redundant tools, shadow IT, fragmented data, and compliance risks in managing SaaS operations effectively.
• Automating SaaS discovery and building a centralized framework helps IT leaders prevent shadow IT, consolidate licenses, and optimize resources.
• Zero-touch onboarding, automated access reviews, and time-based access controls empower IT leaders to strengthen security and streamline workflows.
• Monitoring license usage, automating renewals, and using AI-driven benchmarks allow IT leaders to manage costs efficiently and avoid unnecessary expenses.
• CloudEagle.ai equips IT leaders with 500+ integrations, spend management, procurement workflows, and automated processes for seamless SaaS operations.

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Challenges faced by IT leaders in SaaS operations

IT leaders face several challenges in managing SaaS operations.

1. Lack of visibility: Many organizations operate a mix of managed and unmanaged apps. While IT strongly supervises managed apps, unmanaged apps are often used without IT's knowledge. This lack of visibility makes tracking usage, costs, and performance challenging.

According to CloudEagle.ai's SaaS spend report, enterprises use an average of around 500 apps. Unfortunately, most IT leaders struggle with visibility into these apps, as spreadsheets track many manually.

This manual tracking makes it hard to monitor usage and spending effectively. As a result, IT leaders struggle to allocate resources efficiently and identify potential issues without a clear overview.

2. Redundant subscriptions and shadow IT: Often, different teams independently subscribe to the same tools. This leads to unnecessary spending, as organizations pay for multiple licenses for the same service. Shadow IT compounds this redundancy, where employees use unapproved apps without IT’s knowledge.

This situation arises directly from a lack of visibility, making it difficult for IT leaders to track all software. Gartner estimates that shadow IT accounts for 30-40% of IT spending in large companies.

Additionally, shadow IT can increase costs through auto-renewals, as finance teams may be unaware of these subscriptions. The financial implications can be significant, creating budget overruns without delivering added value.

3. Fragmented data: In different SaaS operations, information is often spread across various apps, resulting in fragmented data. IT leaders cannot completely view business performance when data is siloed in different tools. This lack of integration can impact resource allocation, and budget management

Without easy access to unified insights, IT leaders may struggle to identify trends, evaluate software effectiveness, and make informed decisions that align with the organization’s goals. Addressing data fragmentation is crucial for improving collaboration and enhancing overall business performance.

4. Compliance risks: IT leaders face the ongoing challenge of ensuring that only authorized people can access sensitive apps. Unauthorized access to apps poses significant compliance challenges for organizations. Employees using unapproved or improperly managed apps can expose the organization to legal and regulatory risks.

The complexity of managing user access across multiple platforms increases the risk of non-compliance, potentially leading to audits, fines, and reputational damage. Without effective supervision, organizations may struggle to maintain compliance with industry regulations and internal policies.

5. App access reviews: One major challenge in SaaS operation management is the need for regular app access reviews. Without these reviews, IT leaders can’t easily check if users have the right access based on their roles. This lack of supervision raises the risk of unauthorized access, putting sensitive data at risk.

6. Time-based access: Another challenge is implementing time-based access controls. Without these controls, employees may keep access to apps longer than necessary. This can lead to compliance risks and increase the chances of data breaches, as inactive users can still access important systems.

7. License harvesting: Managing software licenses is also difficult. Many organizations struggle to reallocate licenses from inactive users to those who need them. This can waste resources and lead to unnecessary costs, as IT teams often don’t clearly understand how software is used.

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Focus areas for IT leaders in SaaS operations to drive business growth

To drive business growth, IT leaders should focus on several key areas:

1. Best practices for SaaS discovery and visibility

Use automated tools: Implement automated SaaS discovery tools to identify all apps in use. These tools connect with your existing SSO, HRIS, finance systems, and other browser plugins to scan your organization’s SaaS stack, uncovering managed and unmanaged apps.

By analyzing SaaS usage, you gain valuable insights into which tools are utilized, helping you track costs and ensure compliance with company policies.

Leverage usage reports: Regularly reviewing usage reports helps you understand how apps are used. These reports provide data on active users and usage frequency for each app. By analyzing this information, you can identify essential tools and those that are underutilized, enabling informed decisions about renewals and subscriptions to eliminate unnecessary costs.

Identify duplicate licenses: Regular audits of your SaaS inventory can reveal duplicate licenses, as multiple teams may unknowingly subscribe to the same service. By eliminating these duplicates, organizations can save money and streamline operations, reducing costs and simplifying management by consolidating licenses.

Prevent shadow IT: Clear guidelines for app usage are essential to prevent shadow IT. Employees may use unapproved tools for convenience, leading to increased spending.

About 85% of businesses globally have experienced cyber incidents in the last two years, with 11% attributed to unauthorized shadow IT usage. Organizations can promote compliance and security by educating staff on the dangers of unauthorized apps and providing a list of vetted tools while helping employees make informed choices.

2. Building a framework for SaaS optimization

When establishing a centralized SaaS management system, you take the initiative to consolidate tools across departments. This makes managing subscriptions, controlling user access, and generating reports easier. It also helps you see how apps are used, track spending, and ensure everyone follows the organization's policies.

These policies are essential for guiding teams in their interactions with SaaS apps. These help employees understand which tools are approved and how to use them correctly, including onboarding new apps and following security protocols.

Employees should be reminded to use only sanctioned apps and adhere to license limits. Exceeding these limits can lead to contract breaches, which can result in financial penalties. Additionally, encouraging users to check if other departments utilize similar tools can help avoid unnecessary duplication and spending.

A strong governance framework reduces risks associated with unauthorized app usage and fosters a culture of compliance. You must leverage a SaaS management platform to establish a framework for SaaS operations. This can greatly improve the efficiency of managing software subscriptions.

3. Strengthening security with SaaS access management

Implement zero-touch onboarding and offboarding: Automating user onboarding and offboarding is crucial for security. Zero-touch onboarding allows new employees to access necessary apps, while offboarding automatically revokes access when they leave, preventing unauthorized access to sensitive information.

Manage privileged and time-based access: It is important to control access based on user roles and specific timeframes. Implementing role-based access ensures that only those with appropriate responsibilities can view or modify sensitive data. Time-based access limits can also be set for temporary projects, reducing risks once a project is completed.

Automate access reviews: In a world where data breaches are common, your organization needs a strong access management mechanism.

“It’s not enough to protect your data; you need to protect your customers’ data too.”

– Satya Nadella, CEO of Microsoft

To achieve this, it’s crucial to regularly conduct access reviews to keep your SaaS environment secure and compliant. These reviews help organizations understand who can access which apps and ensure that permissions align with current job roles.

Organizations can quickly identify unnecessary or outdated access rights that could compromise sensitive information by automating this process. This approach not only enhances security but also helps meet compliance requirements by providing clear records of who can access what.

4. Cost management strategies for SaaS subscriptions

The average SaaS spending per employee increases as SaaS usage grows, with small and medium-sized businesses (SMBs) spending more than larger enterprises. Therefore, optimizing resources to prevent waste and maximize the value of your SaaS investments is important.

Monitoring license usage: To effectively manage software costs, it is essential to establish a process for regularly monitoring license usage. This data is crucial for making informed decisions about software subscriptions. By employing a SaaS management platform, you can gain detailed insights into several key types of data regarding app usage:

• Active user counts: Track how many users actively engage with each app to assess utilization.
• Usage frequency: Analyze how often apps are accessed to identify rarely used tools.
• Feature utilization: Monitor which features are used most frequently to gauge an app’s effectiveness.
• Engagement trends: Observe changes in usage over time to identify patterns and trends.
• Cost vs. value analysis: Compare usage data against subscription costs to evaluate return on investment (ROI).

App rationalization: One efficient way to manage and optimize software costs is through SaaS app rationalization. This key strategy involves evaluating all software apps to determine their value and necessity. Organizations can analyze usage data, costs, and how well each app aligns with business goals.

By identifying which apps to retain, enhance, replace, or retire, companies can eliminate redundancies and ensure they invest in the most valuable tools. This approach reduces waste and streamlines operations, resulting in significant cost savings.

Renewal management: Effective renewal management helps keep SaaS subscription costs in check. This helps track expiration dates for licenses and subscriptions while reviewing usage patterns before renewal. Analyzing how frequently apps are used helps identify underutilized licenses that may not need to be renewed.

Additionally, negotiating with vendors for better terms or considering alternative providers can significantly reduce costs. This ensures that companies only pay for what they genuinely need while maintaining access to essential tools.

License harvesting: Managing SaaS licenses can be challenging, leading to unused licenses as employees stop using or underutilizing apps. To optimize unused or underused licenses, you should take action to revoke those licenses and reassign them to new employees. This can be efficiently managed using a SaaS management platform with license harvesting workflows.

Automated alerts: You can use SaaS management platforms to set up automated alerts. These alerts notify IT teams when licenses are underutilized or nearing expiration, allowing for timely interventions.

5. Streamlining procurement and vendor management

Leverage AI-Driven Benchmarking Tools: The SaaS pricing benchmark helps you make informed procurement decisions. It allows you to compare vendor pricing and services and provides insights into market trends.

With a SaaS management tool like CloudEagle.ai, you access a database of over 150,000 vendors. This database updates weekly with insights from industry experts and billions of transactions.

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Based on your company size and license details, you can easily check if your pricing aligns with benchmarks. This actionable data strengthens your position in negotiations and ensures you never overpay.

Automate renewals: Automating the renewal process is key for maintaining subscription continuity. However, auto-renewals can lead to increased spending. Contracts may renew without proper review, resulting in unnecessary payments for unused subscriptions.

This can strain budgets and make negotiating better terms or exploring cheaper options difficult. Teams may also risk losing access to important tools if renewals are overlooked.

In this situation, implementing an automated renewal management system with regular reviews and alerts is essential. This ensures contracts are renewed on time and provides insights into usage and spending.

Integrate approval workflows: Connecting your SaaS management platform with Slack can transform how your team handles approval processes. Employees can easily request app access by sending messages directly in Slack, eliminating the need for lengthy email chains or manual forms. This streamlines the workflow, significantly reducing approval times and improving overall efficiency.

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Utilizing a Slack bot allows team members to submit procurement requests with just a few clicks. This bot can guide users through the necessary steps, ensuring all required information is included. Automated notifications can alert relevant stakeholders when a request is submitted, making it easier for them to review and approve quickly.

Utilize assisted buying services: If you lack the time or bandwidth for vendor negotiations, consider opting for assisted buying services. SaaS procurement experts are an extension of your procurement team in these services, managing essential tasks like market research, vendor evaluation, and contract negotiations.

“Don’t be afraid to change the model.”

- Reed Hastings, Co-Founder & CEO, Netflix

This approach is especially beneficial for lean teams, simplifying the buying process and supporting complex purchasing decisions. By utilizing these services, you can save time and reduce the complexity of acquiring SaaS apps. This allows your internal teams to focus on their core responsibilities while ensuring that procurement is efficient and effective.

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Want to manage diverse SaaS operations? — You just need CloudEagle.ai

To manage your organization’s SaaS operations effectively, you need CloudEagle.ai. This SaaS management and procurement platform helps you discover, manage, optimize, and renew SaaS solutions within one centralized platform.

Here’s how IT managers can leverage CloudEagle.ai to enhance the efficiency of various SaaS operations:

1. SaaS app management

CloudEagle.ai makes managing your SaaS apps straightforward and efficient. With over 500 integrations, including SSO, HRIS, finance systems, and browser plugins, it seamlessly connects to your existing systems. In just 30 minutes, you can uncover every app your organization uses—sanctioned and unsanctioned.

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Another key feature is rationalizing your SaaS stack. The tool helps you identify duplicate or unused apps, which can drive up costs. You can eliminate redundancy and consolidate your tools effectively by providing insights into how often each app is used.

This visibility helps you tackle shadow IT—unauthorized apps that could put your data at risk—and ensure everything is properly managed and compliant. You can also set up alerts to catch unauthorized apps purchased with company credit cards, allowing you to address potential security risks early on.

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Finally, categorizing and allocating resources becomes a breeze with CloudEagle.ai. Its smart engine organizes apps by department, making it easy to see which teams use what software. This allows for better resource allocation and cost management, ensuring every department has the necessary tools without overspending.

You can check out this inspiring success story about how Heath Ceramic's IT and Finance team achieved 100% SaaS visibility and spend data using CloudEagle.ai.

2. Spend management

CloudEagle.ai makes spend management straightforward by giving you a clear overview of your SaaS costs. You can see how much each department spends on software, which helps you track spending and hold teams accountable. This transparency is key for managing budgets effectively.

The platform offers detailed usage insights, such as recorded Zoom meetings and opportunities created in Salesforce. This data helps identify wasteful spending, like unused licenses or underutilized features, enabling smarter financial decisions and cost savings.

Want to learn how CloudEagle.ai helps Falkonry make informed software choices and optimize spending? Read the inspiring story here.

3. Onboarding and offboarding automation

It will take significant time to manually assign necessary SaaS tools to new hires. However, with CloudEagle.ai, you can streamline onboarding and offboarding processes and assign those tools in just minutes. Its automated user provisioning workflows enable you to grant new employees access to the required apps quickly.

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It's also crucial to revoke access to SaaS tools when employees leave, ensuring security and reducing the risk of unauthorized access. For this, you can use CloudEagle.ai's offboarding workflows to efficiently revoke access to apps for departing employees.

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Discover how streamlining employee onboarding and offboarding with auto-provisioning and deprovisioning workflows with CloudEagle.ai can benefit your organization in this testimonial from Alice Park at Remediant.

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4. Access management & compliance

As an IT leader, you must ensure that all employees have the required SaaS access—no more than necessary—and that the tools they use comply with regulatory standards. To achieve this, you can utilize an automated tool like CloudEagle.ai, which streamlines app access monitoring and compliance reviews, saving organizations time and effort.

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Instead of manually checking user access for each app, CloudEagle.ai automates the process. With just a few clicks, you can generate compliance reports and detailed logs of user activities, allowing you to focus on more important tasks.

“Security is not a one-time event. It’s an ongoing process.”

– John Malloy, Cybersecurity Professional

5. Self-service app catalog

CloudEagle.ai helps eliminate shadow IT by offering a user-friendly self-service app catalog. This lets employees quickly search for and request access to approved applications through Slack or MS Teams. Employees can get the necessary approvals in just minutes, so they’re less likely to turn to unapproved apps out of frustration.

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Moreover, with less shadow IT, IT admins can focus on more important tasks instead of managing numerous access requests. With CloudEagle.ai, you can create a secure environment where employees have the necessary resources while controlling software usage.

6. Time-based access

Many industries have rules about who can access data, and time-based access helps organizations follow these rules to avoid fines. Time-based access is a security feature that allows organizations to allow users to access systems or data at specific times.

You can set limits for certain hours or days, like work or project times. Access is automatically removed when the time runs out, helping keep your data safe. Restricting access at certain times lowers the chances of data breaches and misuse.

IT leaders can give temporary access to contractors or team members without worrying about long-term risks. With CloudEagle.ai’s time-based access, you can let users access systems, like AWS root, only during specific times, making everything safer and easier to manage.

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7. Privileged access management

CloudEagle.ai helps you protect your sensitive data with its privileged access management. You can define roles to control who can access critical data and what actions they can perform.

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With the right controls and approval processes, you can ensure that only authorized users make important changes or access confidential information. CloudEagle.ai also tracks all access events, providing detailed logs that help you meet security standards and compliance requirements, giving you peace of mind.

8. License management

Managing software licenses can be tricky, but CloudEagle.ai makes it straightforward. The tool provides a clear view of all your licenses, allowing you to effectively manage license types, assigned and active users, login frequency, activity, and spending for each license from one dashboard.

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With CloudEagle.ai’s license management feature, you get detailed SaaS usage insights that inform your decisions regarding license optimization. The platform offers deeper insights into license utilization, including tracking user engagement to identify power users and those rarely log in.

It helps spot overlapping licenses across teams, making consolidation easier. You can analyze feature usage to determine which tools are frequently used and which go unused, guiding decisions on upgrades or downgrades.

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For example, you can see how Zoom usage data reveals which features are used and how much resources are being wasted. Based on this information, you can downgrade or eliminate unused licenses, enabling the organization to save money and allocate resources more effectively.

9. License harvesting

When companies purchase more licenses than necessary, it leads to resource wastage. However, you can use license harvesting to right-size these licenses based on actual usage.

Using CloudEagle.ai’s license harvesting workflows, you can revoke and redistribute licenses to teams needing them rather than letting them go to waste. Reclaiming these unused licenses can cut costs and efficiently allocate resources.

Additionally, you can set usage limits for licenses. If a user’s activity falls below this limit, the license can be automatically deprovisioned and reassigned to someone who needs it.

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Conclusion

According to Grand View Research, the global SaaS market will experience a compound annual growth rate (CAGR) of 13.7% from 2023 to 2030. As a result, IT leaders' responsibilities will also expand.

IT leaders need to optimize SaaS operations to support organizational growth. By addressing challenges such as visibility and compliance and prioritizing best practices in security and cost management, they can drive significant business growth.

Creating a solid framework for SaaS optimization and streamlining procurement processes will improve efficiency and maximize the value of investments. As reliance on SaaS solutions increases, proactive management will be essential for staying competitive and achieving long-term success.

To automate various aspects of your organization’s SaaS operations, consider an all-in-one SaaS management tool like CloudEagle.ai. Everything will be streamlined from onboarding to offboarding, vendor management, and access controls, enhancing overall effectiveness.

To learn more about how to optimize your organization’s SaaS solutions, schedule a demo with CloudEagle.ai.

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