How to root out shadow IT and maximize SaaS investments
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Growing reliance on SaaS has opened the door to shadow IT: SaaS applications bought by individual employees without the knowledge or approval of their organization’s IT department.
While shadow IT can be an opportunity for innovation, if left unaddressed, it can lead to risks like duplicate subscriptions, wasted IT spend, a lack of compliance and greater risk of a data breach.
By leveraging SaaS management and taking some steps, businesses can more effectively manage shadow IT, gain a competitive edge, reduce unnecessary costs and empower a distributed workforce.
To avoid the negative consequences associated with shadow IT, you need to give IT teams visibility into your organization’s entire SaaS portfolio. Once IT has a line of sight into all applications in use and how they are used, they are positioned to optimize investments. Maximize your SaaS investments with these tips:
Implementing self-service SaaS at your organization is easier than you may think.
Discover all SaaS applications and spending
Some organizations take a spreadsheet-based approach to managing their SaaS applications. Others turn to web browser plugins, single sign-on tools and cloud access security brokers. But these discovery processes can be time-consuming and involve piecing together SaaS inventories from disparate sources, often resulting in records that are out of date before they’re even completed.
Even the most detailed, frequently updated spreadsheet is not always the most effective way to manage SaaS, especially when you consider that organizations manage over 650 SaaS applications on average, and they underestimate the number of SaaS applications within their ecosystem by two to three times. If you don’t know a SaaS application exists, how can you manage and budget for it?
To optimize your SaaS portfolio, you have to start with gaining complete visibility. Tools like SaaS management platforms with machine learning capabilities that detect SaaS purchases enable continuous discovery of software. These solutions can also integrate with your financial management systems to discover purchases.
It’s critical for this strategy to happen in real time so you have a picture of your tech ecosystem that’s always complete, accurate and up to date.
Optimize and rightsize licenses and features
Do you have as many active users as you accounted for or could you downgrade your plan? Perhaps an employee left, but their accounts were never deactivated. In practice, you may not need all the premium features or seats you’ve paid for, which means there could be opportunities to reduce your SaaS spend.
In a typical month, 38% of all SaaS licenses go unused. But this issue can easily be addressed with a more effective strategy. By rightsizing your licenses and features, you can scale down overlapping or redundant functionality, eliminate duplicate subscriptions, enable license optimization and ultimately optimize your budget.
When examining rightsizing opportunities, consider the following questions:
- Does the current list of licensed users include any former employees or employees who aren’t using the software anymore? If so, these seats can be eliminated or reprovisioned.
- Do you need all of the features you’re paying for? For example, Zoom’s premium license allows users to meet for more than 40 minutes for a monthly fee per employee. But if your premium users are always meeting for under 40 minutes, you can move them to the free plan to minimize your SaaS spend.
Forecast and plan renewals
Forecasting your technology investment is a challenge. Usage data may not be readily available (and it’s usually spread across a variety of platforms), and thanks to shadow IT, you may have duplicate applications and multiple subscriptions to the same application that are unaccounted for. Organizations often purchase licenses based on what they think they need, and it’s easy to overestimate, which results in wasted budget.
To successfully forecast for the coming years, you need growth estimates and utilization data. You can gather this information through survey data, stakeholder meetings or by contacting the vendor. However, since this information could be used against vendors to negotiate licenses, they aren’t always willing to make utilization data readily available. And that’s where a SaaS management platform can help.
Thanks to direct integrations, these platforms let you access renewal information and utilization data so you can plan ahead and budget for renewals. You can also determine a SaaS application’s ROI and monitor its renewal date. If you discover rightsizing opportunities before it’s time to renew, you can negotiate with vendors more strategically.
Empower distributed workforces with compliant self-service SaaS
Employees aren’t always aware of all the SaaS tools already available to them, which can lead them to buying their own subscriptions. With many organizations now employing hybrid and remote workers, it’s even harder to keep track of your subscriptions and make a comprehensive list available to employees who need to use them.
But if you have an effective strategy and a system of record, you can give your employees access to vetted and approved applications. A system of record with self-service functionality acts as the organization’s application catalog, enabling employees to quickly browse and request access to all of the applications your organization already pays for.
This approach effectively increases employee productivity by allowing them to quickly get the tech they need and minimizes wasteful spend. It also ensures the applications in use at your organization are secure and compliant.
Implementing self-service SaaS at your organization is easier than you may think. Once you’ve gained visibility into your subscription and established a baseline inventory, you can create a review and approval process for all new applications that enter your tech ecosystem. After implementing this process, place your applications into a catalog with self-service functionality and watch as shadow IT declines.
Keep your spend under control
Shadow IT is a growing problem, but there are ways to contain it and ensure your budget remains stable. With a management strategy that prioritizes continual discovery and visibility, you can more effectively forecast for your organization, enable license optimization and maximize your investments.
Reducing shadow IT doesn’t mean reducing innovation and productivity at your organization — you can still give your employees access to their preferred applications, just not at your expense.
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