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Software as a Service (SaaS) monthly or annual subscriptions have proven to be a very successful software delivery and licensing method. SaaS is a tailor-made asset that can satisfy any business size, as your software footprint is adjusted to your company's consumption, features required, and users in scope. Through subscriptions, customers can access cloud-based software with a high degree of flexibility and ease.
In general, cloud environments are highly appreciated because of the incredible agility and scalability offered to companies of all sizes and industries. The all-in-one subscription pricing usually covers the usage, storage, maintenance/updates, and security-related services. Plus, it is easy to procure, enabling a convenient way of spinning up IT applications without having to wait on your IT department to deliver infrastructure and services – expediting time to value.
As a result of the increasing cloud-based nature of SaaS, complex and rapidly evolving environments introduce serious risk of license compliance or software waste that often goes unmanaged. To date, most IT vendors have maintained their software audit focus on customer deployments of on-premise software. While they aren't common today, cloud audits or SaaS true-ups will become a common practice by publishers.
Staying on top of your license management game is fundamental when it comes to keeping safe during audits, either on-premise or in the cloud. More than ever, Software Asset Management (SAM) and Cloud Cost Management (CCM) are essential programs for effectively mitigating compliance and over-spend risks resulting from this evolution. As a strategic decision-maker, you need to be prepared for the costly challenges raised by SaaS –proactively assessing, managing, and monitoring your current subscription landscape. Here's how.
Everything starts easily; you can purchase a SaaS subscription in just a few clicks. While made very simple, it also creates shadow IT for organizations and increases the complexity of license management. Knowledge is key (i.e., your SaaS application inventory), but the required knowledge is not always easy to obtain, given SaaS deployments are not tracked by traditional IT tools.
With SaaS comes a decentralization of IT and procurement, creating siloed IT-like functions across your organization. In some cases, this may align with your business model, but for many organizations, this creates greater challenges for IT leadership. Regardless of your company’s operating model, there's no way to ensure commercial economies of scale and limit the amount of compliance and security exposure introduced into your environment without having a comprehensive understanding of your SaaS deployments. SaaS can be purchased online with a credit card, bypassing any need for IT or Information Security approval. This increases your risk of cybersecurity attacks, software non-compliance, and additional financial liabilities for your company.
User access management is a nightmare to track without proper SAM and CCM processes and even more difficult to restrict. As a result, over-subscription risk and application redundancy are common outcomes of SaaS customers who lack control over their environments. Not to mention, having stale or inactive users poses unwanted security threats to your enterprise and data.
Unfortunately, traditional SAM tools and service providers have not been able to keep up with digital transformation and widespread SaaS adoption. Obtaining a full picture of your current software deployments is never a trivial task, but baselining your subscriptions and measuring actual usage is even more daunting. Also, keep in mind that IT suppliers don't lock down most subscription features within SaaS applications, so inadvertent software over-use is more common than not. Application “stickiness” is a goal for most supplier sales teams.
Consequences are clear: there is a considerable risk of licensing imprecision. Of course, license over-consumption must also be avoided. Still, there is also a high chance of over-paying for subscriptions, features, and users that are not required – wasting IT dollars that can help fund other key business or digital transformation initiatives.
Developing a SaaS management strategy is essential as part of your overall SAM program and can no longer be ignored. Powered by leading-edge partner technologies, we have developed a three-step approach to gain control of your overall SaaS usage and establish proactive Cloud Cost Management, starting with a mock audit.
Gather data and evaluate the current situation. Uncovering what you do not know is empowering and necessary. It means identifying the SaaS applications and features in use, the users with current access, and the frequency of the usage.
Determine a precise mapping of vendor GL data to each application to understand who buys SaaS internally and how much is spent on each product. Then, by reconciling this usage data to your subscription entitlements (and payments), you will easily discover if any discrepancies need to be addressed, whether license over-use or waste.
Conducting a mock SaaS audit is a leading practice you should definitely incorporate into your overall license management discipline. It will tell you everything you need to know and more. Get the appropriate support beforehand to ensure both process efficiency and accuracy of the results. You can adapt leading practices from trusted providers and/or licensing experts, transferring knowledge and skills to internal staff. Also, having the right SaaS discovery tool is critical to ensuring the completeness and accuracy of your SaaS management efforts. Selecting the wrong technology will preclude you from producing data-driven insights that allow you to meet these SaaS-driven challenges.
Step 2: Optimize and Secure
When and only when you have reliable SaaS deployment and usage data, you can start making smart decisions on optimizing your licenses, reducing the footprint where appropriate, and securing your user base. Assess licensing deltas resulting from your software reconciliation and identify capability and/or application redundancies that can be rationalized. You will be in a stronger position to lead any discussion with your SaaS suppliers to re-negotiate terms upon renewal or recalibrate any current subscriptions.
Develop proactive SAM and CCM processes, taking into account SaaS management. Establish compliance and security governance over software licensing, both on-premise and in the cloud. Follow up closely and regularly on this matter, staying ahead of the curve to help avoid costly surprises. Account for IT shock events (e.g., proverbial audit letter or true-up requests) and ensure you have established data analytics and reporting to support your SaaS findings.
Jumpstart your SaaS management and SAM program with our cloud and licensing experts today. Whether you need a complete SaaS mock audit or would like to prepare for a specific vendor subscription renewal (e.g., Salesforce, Microsoft Office 365, etc.), Connor is here to save you time and money. Contact us at softwareadvisoryservices@connor-consulting to start your no-risk SaaS assessment today.
