Software as a Service (SaaS) dominates the enterprise technology market. Its lower cost of ownership compared to on-premises solutions make it an attractive option for reducing costs. However, if you don’t have full visibility and control of SaaS spending across your enterprise, your SaaS solutions might not be as cost-effective as you think they are.
Why SaaS Expense Management Matters
SaaS has become increasingly important to enterprise operations. The average firm with over 250 employees now uses more than 100 SaaS applications. Enterprises relied on many of these tools, from business intranet to video conferencing platforms, to stay operational following the COVID-19 pandemic. And it continues to play a pivotal role as the world adapts to hybrid working.
But the more SaaS solutions you adopt, the harder it is to manage what your enterprise spends on them. CFOs and your internal teams lack the capacity to track every subscription across hundreds of services and thousands of users. The cost of licenses adds up fast. And if you’re not careful, your enterprise will end up paying for more than it needs, which will hurt your bottom line.
To prevent this, you need a way to monitor and control your SaaS spend for every service across your entire enterprise. This is where expense management services can help.
How To Make Major Savings With SaaS Expense Management
SaaS expense management services find and rectify any inefficiencies in your SaaS spend.
The goal is to identify:
- All the SaaS services your enterprise uses
- Who uses them
- Whether they are cost-effective
This allows you to save your business significant costs in two ways.
1. Optimize Your SaaS Usage
Enterprises often use multiple SaaS apps with overlapping functions. For example, you might be using three different SaaS apps to host video calls: Zoom, Teams, and WebEx.
Complete visibility of your SaaS services allows you to make smarter decisions and streamline how you use them. By analyzing usage data, you can see which app is used the most and phase out the other two, so you’re not paying for multiple apps that serve the same purpose.
You can also examine your tiered subscriptions. You may be paying for features you no longer need and can move to a lower cost, or even free, tier.
2. Identify and Cancel SaaS Licenses You Don’t Need
Unused software is a major source of waste. On average, companies waste 37% of their software spend on it, and in the U.S. alone it costs $30 billion.
There are several causes of SaaS waste, including:
- Teams abandon one service in favor of another, and forget to cancel it before the subscription automatically renews
- Employees exit the company, but their software licenses aren’t terminated
- Enterprises pay for licenses for every team member when they could use more cost-effective license models
You can prevent this waste with SaaS expense management services. It allows you to identify abandoned or unused software, cancel unnecessary subscriptions, and rightsize your licenses. So, you only pay for what you need.
How Much Could SaaS Expense Management Save Your Enterprise?
SaaS should save your enterprise money, not waste it. But with so many services, licenses, and users to keep track of, it’s all too easy to lose control of your SaaS spend and find yourself throwing away a large portion of your IT budget.
SaaS expense management empowers you to take control. It gives you full visibility of your environment, so you can reap all the benefits of SaaS while also making smarter decisions that save significant costs.
Topics: TEM
