The honeymoon phase of SaaS adoption is officially over. While companies continue to rely heavily on cloud-based software, executives are increasingly focused on maximizing the return on their SaaS investments.
SaaS spending has exploded in recent years. Gartner predicts that global spending on public cloud services exceeded $600 billion in 2023. This surge, coupled with economic uncertainty, has put pressure on businesses to justify every dollar spent.
The Challenges of SaaS Management
- Visibility Gaps: A recent study by Productiv found that 33% of SaaS licenses go unused. This lack of visibility makes it difficult to optimize spending and ensure employees are using the tools they need.
- Integration Complexities: Integrating various SaaS applications can be a major challenge, leading to data silos and workflow inefficiencies.
- Renewal Risks: Auto-renewals and complex pricing models can lead to unexpected costs and make it difficult to negotiate favorable terms.
- Shadow IT: Employees often subscribe to SaaS tools without IT approval, creating security risks and compliance issues. Zylo reports that the average organization has 291 SaaS applications, with 40% of those being Shadow IT.
Executives are demanding clear evidence that SaaS investments are delivering tangible business value. This means:
- Measuring Usage and Adoption: Tracking key metrics like active users, feature usage, and employee engagement.
- Optimizing Licenses: Identifying and eliminating unused or underutilized licenses.
- Streamlining Workflows: Integrating SaaS tools to automate tasks and improve collaboration.
- Negotiating Better Contracts: Leveraging usage data to negotiate favorable terms and discounts.
- Enhancing Security and Compliance: Implementing robust security measures and ensuring compliance with relevant regulations.
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