Why Finance Teams Need a SaaS Management Software

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Did you know that SaaS spend is the third largest spend in organizations next to employee and office lease spend? Our SaaS spend analysis revealed that an organization spends $3,500 per employee per SaaS application.

What we realized from our 2023 SaaS spend trends and insights report is that CFOs and finance teams are looking to cut down their costs on SaaS applications by 30%.

Finance teams can try consolidating their vendors, right-size licenses based on usage and rationalizing their stack to optimize costs. However, a vital element often overlooked in this process is determining which apps to consolidate or licenses to eliminate.

Traditional or manual approaches will take time; spreadsheet-based app tracking is counter-productive for the team. Finance teams need a modern app management system that can streamline this process.

This is where SaaS management platforms come into play, and in this article, we’ll discuss how SMPs like CloudEagle can help finance teams optimize their SaaS spend.

SaaS management software: An all-around solution

SaaS management software is a tool built to help organizations get complete visibility over their SaaS stack, including apps, spend, contracts, licenses, and vendors. They can help organizations in various ways, like:

• Get complete control over the SaaS portfolio
• Optimize SaaS spend
• Prevent SaaS sprawl and shadow IT
• Manage and right-size licenses
• Centralize SaaS assets
• Streamline procurement
• Automate provisioning and deprovisioning.
• And so on.

While several SaaS management tools exist, only a handful offer extensive features covering the entire lifecycle of SaaS—from research and procurement to management and renewals.

For instance, platforms like Vendr excel in SaaS procurement, while SMPs like Zluri specialize in SaaS app management. However, what's truly needed is an all-in-one platform that addresses SaaS and spend management, vendor and contract management, user management, and procurement.

One such comprehensive solution is CloudEagle. It serves as a SaaS management and procurement platform, providing essential features crucial for CFOs and finance teams to reduce SaaS expenses by up to 30% during uncertain economic conditions.

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Let's dive into a detailed exploration of how an advanced SaaS management solution like CloudEagle can significantly aid in SaaS spend management.

How SaaS management softwares can help finance teams?

Preventing SaaS sprawl and shadow purchases

SaaS sprawl refers to the uncontrolled proliferation of various SaaS applications across an organization, often resulting in redundant, overlapping, or underutilized software. Shadow purchasing is the practice of purchasing and using unsanctioned applications within an organization.

Yes, when left unchecked, shadow purchases lead to SaaS sprawl. Both phenomena will lead to increased costs, security vulnerabilities, and difficulties in managing and maintaining these applications.

Shadow purchases are one of the leading factors that cause SaaS spend to escalate due to hidden costs, auto-renewals, etc. Since these apps are unaccounted for, it’ll be hard for finance teams to track them.

SMPs like CloudEagle will send proactive alerts when they detect unsanctioned, free, or duplicate apps entering your system. You can be aware of these and prevent shadow purchases from occurring in their early stages.

You can also quickly identify the users involved in shadow purchases and train them on the cost-consciousness and risks of maverick spending.

Eliminate duplicate, redundant, and free apps

Redundancies in your portfolio are another factor that escalates overall spending. A SaaS management software will integrate with your SSO, finance, HRIS, and contract management systems to provide complete visibility into all apps and their relevant spend.

SMPs like CloudEagle will automatically identify and organize all duplicate, free, and redundant apps in one place, making it easier to make the right optimization decisions.

Automated monitoring and alerts within these platforms notify finance teams promptly about new app installations or usage that might lead to redundancy or non-compliance.

It enables finance teams to access the complete billing history of these applications, enabling them to pinpoint the users responsible for their purchases. Engaging with these users allows for a better understanding of the app's necessity within the team, aiding in informed cost optimization decisions, whether it involves eliminating or consolidating redundant apps.

Without a SaaS management system, identifying these applications, tracking relevant spending, and accessing billing details would be incredibly time-consuming. Tools like CloudEagle have saved organizations over 400 hours from this cumbersome process.

Application consolidation

Within enterprise environments, it's common for various teams to use multiple applications that perform similar functions. For instance, the Sales team might use Outplay for emails, while the Marketing team relies on Mailchimp for campaigns.

App consolidation involves identifying and merging such applications and streamlining operations by opting for a unified solution.

However, pinpointing these overlapping applications in an extensive portfolio can be challenging. Without identifying duplicates, it's difficult to consolidate and optimize spending.

SaaS management systems offer complete visibility, like CloudEagle, which automatically identifies and organizes apps with overlapping functionalities in a single dashboard.

Moreover, these systems send proactive alerts when an application with overlapping functions is being purchased, enabling early intervention for finance teams.

Once flagged, finance teams can swiftly analyze costs, usage, and licenses to determine which applications can be consolidated. This process can be completed within a few hours using CloudEagle, which would otherwise take days to identify similar applications.

Consolidating applications can lead to cost savings by reducing the number of subscriptions, licenses, and maintenance fees associated with various software tools that serve similar purposes. It also cleans out the SaaS stack, making it easier to manage.

Right-sizing licenses

Purchasing surplus licenses as a proactive measure to accommodate anticipated growth is a common practice among organizations. However, the challenge arises when these forecasts don't align with the actual growth trajectory. This mismatch often leads to unused surplus licenses, resulting in wasted spending and poor ROI.

Unless finance teams right-size these licenses with relevance to actual usage, the ROI won’t get better. To identify these unused licenses, your team has to visit each application and gather the data manually, and it’ll take you days to have the complete data.

However, SaaS management platforms (SMPs), such as CloudEagle, streamline this process with their integrations. They furnish precise usage insights for each license, detailing usage and provisioned users. CloudEagle identifies unused licenses within minutes, enabling teams to optimize ROI by engaging vendors to right-size licenses based on usage during renegotiations.

Finance teams can establish usage thresholds for licenses; when usage falls below, CloudEagle alerts admins for low usage. Additionally, you can also configure license reclamation workflows. If usage dips below thresholds, it automatically deprovisions the license from the user, and you can later reallocate it to someone in need.

CloudEagle also has SaaS buying experts who can engage with specific vendors, help you right-size your licenses, and save on spending if your team lacks the bandwidth.

Reduce tail spend

Reducing tail spend, is crucial for finance teams aiming to optimize budgets and improve cost efficiency. Tail spend refers to small or sporadic purchases across different organizational departments or teams.

These individually insignificant purchases collectively contribute to a substantial portion of overall spending. Unmanaged tail spending adversely impacts an organization's financial resources, posing risks to its economic well-being.

Tail spend is often hidden, making it difficult for finance teams to identify and optimize it.

However, SaaS management softwares offer visibility into all software purchases across departments.

This centralized view enables finance teams to effectively monitor and consolidate these scattered purchases, paving the way for improved cost management and optimized spending.

Prevent auto-renewals

When apps and spend are tracked using spreadsheets, auto-renewal of contracts will likely occur. Spreadsheets cannot track renewals or send reminders to get the team to renew the contracts.

Finance teams can use CloudEagle to track renewals effectively. It’ll create a renewal calendar based on the renewal date, and you can configure workflows to send reminders 30, 60, or 90 days before the renewal deadline.

This will give you enough time to prevent auto-renewals, analyze usage, and prepare a negotiation plan to cut down on unused licenses and save on spend. You’ll receive alerts via Slack and emails, which will only stop when the contract is renewed.

Auto-renewals hurt finance teams the most, as sometimes the contract will be auto-renewed even though the application or licenses are being used effectively. This results in wasted spending and poor ROI.

With CloudEagle, finance teams can stay alert for upcoming renewals and optimize costs by collaborating with IT and procurement teams to analyze usage and negotiate with vendors.

Enhancing budget analysis

SaaS management platforms significantly contribute to comprehensive budget analysis for finance teams, offering insights that enable better financial decision-making and resource allocation.

Platforms like CloudEagle provide detailed breakdowns of SaaS spending across departments, vendors, and applications. Finance teams gain granular insights into where the budget is allocated, allowing them to identify areas of overspending or underspending. This granularity helps formulate more precise budgets aligned with actual usage and organizational needs.

Utilizing historical spending data and usage patterns, CloudEagle facilitates forecasting and predictive analysis. Finance teams can anticipate future spending trends, allowing for proactive budget adjustments and optimal resource allocation.

This foresight enables better preparation for financial fluctuations or changes in software requirements. By comprehensively tracking SaaS expenses, SMPs enable accurate cost allocation.

Finance teams can allocate costs based on actual usage metrics, ensuring a fair and transparent distribution of expenses across departments or cost centers. This precise allocation strategy supports informed decision-making and aids in justifying expenses.

Conclusion

There you go, this is how SaaS management platforms can help finance teams optimize SaaS spending in these uncertain market conditions.

Efficiently managing SaaS expenses is pivotal for financial health. SMPs like CloudEagle are the answer to optimizing software spending. From curbing sprawl and redundant apps to optimizing licenses and enhancing SaaS budgeting, they empower finance teams with crucial insights for informed cost optimization decisions and streamlined budget analysis.

CloudEagle's robust features offer detailed spending insights, automated workflows, predictive analysis, and precise cost allocation, allowing finance teams to align budgets accurately, predict spending trends, and allocate resources effectively.

Here's how Sophie Wang, the Head of Finance at Wefunder optimized spend using CloudEagle:
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For finance teams aiming to cut SaaS costs by up to 30% and gain comprehensive SaaS control, CloudEagle is the solution. Book a demo today to explore how CloudEagle can revolutionize your SaaS management and drive significant cost efficiencies.

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