SaaS Spend Will Continue To Grow: The Time To Start Managing It Is Now
As reliance on cloud-based tools continues to increase, it's essential that businesses gain – and maintain – control of their total SaaS spend. We recently launched an eBook to help you achieve control over your SaaS spend and in this blog post, we take a closer look at the business case for SaaS spend management.
Do you know how many SaaS apps your employees use across your company? Do you know how many of these tools are duplicates, or offer the same or similar function as another app? Could you estimate how much your company spends on SaaS each year? Many businesses find themselves answering “no” to these questions, which is why SaaS management is such a relevant and urgent topic to think about today.
Gartner expects global spend on public cloud services to rise by 20.4% in 2022, with end-user spending expected to reach $600 billion in 2023. For organizations of all sizes, SaaS spend can represent a huge portion of their expenditure if not managed properly. One study estimates that companies spend an average of $2,623 per employee per year on SaaS, so the costs can really add up. With employees using an average of 8.3 SaaS apps each, according to the study, there are considerable savings to be made.
As businesses continue to operate in an increasingly virtual way in a post-pandemic world, our reliance on SaaS is only going to grow. One of the challenges businesses face is making sure the SaaS tools their employees download and install are properly approved and logged, with their spend accounted for. Many organizations have yet to get a full grip on this challenge, with company money being spent on accounts that are either not used, or worse, still linked to people who have left the company.
Now is the time to assess SaaS spend
At Torii, we understand that budgeting is a key concern for CIOs. Our own research finds that - after security - managing operating costs is the second-biggest challenge for IT executives. Our research also finds that 28% of IT teams use SaaS management tools to understand their SaaS usage and costs. And that number is growing. In Gartner’s Market Guide for SaaS Management Platforms 2021 report, they predict that by 2026, 50% of organizations using multiple SaaS applications will centralize management and usage metrics of these apps with a SaaS management platform tool.
Untracked SaaS costs can quickly add up and what may seem like a drip can quickly become a flood. For example, an employee could sign up for Canva using a company card – with a recurring monthly fee – that continues to hit the company’s budget without IT ever knowing about it.
In addition to managing your company’s spend on SaaS, enjoying full control and visibility over these applications has other benefits. By managing SaaS from a single source, you can reduce the risk of cybersecurity threats and it’s also easier to remain compliant with data privacy regulations -- both of which can carry severe reputational damage, costs, or fines.
How to start your SaaS spend management journey
Keeping on top of SaaS spend management is a team effort. It’s important for IT decision-makers, heads of procurement, and CFOs to keep track of the licenses and subscriptions in use across their business. That starts with illuminating Shadow IT. Once you’re able to clearly visualize your spend in one central location, it quickly streamlines collaboration. Plus, having complete visibility over your licenses also gives you stronger bargaining power when negotiating deals with SaaS providers.
The benefits start stacking up once you start better understanding your SaaS stack, but the first step is starting even when it feels impossible.