In large enterprises, CIOs are struggling with the growing proliferation of SaaS applications. Chances are that inside your corporation, there are a lot more employees using Software as a Service or SaaS applications than anyone knows. SaaS solutions are popular for their ease of use, which can explain their growing presence inside the enterprise.
But there can be too much of a good thing, and not all SaaS offerings will merit a place in your business. As Forbes explained, “When SaaS entered the picture, everyone in the organization became a buyer. SaaS vendors marketed straight to business units while employees purchased applications on their credit cards. Now, there are thousands of applications used in a company where there used to be tens.”
Forbes noted it’s common to find companies running redundant applications, with productivity and messaging software being the most used (83% of CIOs saying they had at least two redundant applications in these categories). As many as 57% of CIOs saw three redundant applications in use. And 36% said employees keep five or more of these SaaS applications running throughout the day.
Understanding what software is being used the most is one useful metric, but it’s best to look at it from a quality perspective too, according to Forbes. For example, a CIO might see 1,700 employees using Microsoft Teams while 1,400 are using Slack. At first glance it might seem like Microsoft’s application is the most suitable choice. But if the CIO digs in and observes that employees are engaging with each other 10 times more with Slack than they do with Microsoft Teams, this data can guide whether to renew one application or another.
The proliferation of SaaS Applications
It’s safe to assume that SaaS usage will continue to grow in the enterprise, so you’ll want to address its proliferation sooner rather than later.
The cloud services market was expected to reach $266.4 billion by the end of 2020, up 17% from the previous year, according to the latest figures from Gartner. And Gartner expects that SaaS “will remain the largest market segment, which is forecast to grow to $116 billion next year due to the scalability of subscription-based software.”
Multiple Platforms Leading to Fragmentation and proliferation of SaaS Applications
There is an embarrassment of riches in Software as a Service solutiona. It’s easy to see how employees might start using more and more SaaS applications, to address pressing business concerns. As Digitalist put it, “Most companies deploy 10-12 large application platforms to manage the various business functions like finances, human resources, sales and marketing activities, customer support, supply chain, manufacturing, procurement, retail store operations.”
The proliferation of applications is supported by the need for workers to, for example, find convenient ways to manage data and run analytics on the information. But being encumbered by multiple applications can keep your enterprise from being nimble enough to stay ahead of competitors, and to meet changes in consumer demand.
What’s called for is an updated application architecture, which Digitalist says “articulates the purpose of each application – business (HR, finance), functional (analytics), and technical (database, middleware).” The idea is that it will be easier for you to keep track of your inventory of applications, who owns them, what the associated expenses are, and the dates when SaaS contracts come up for renewal.
Gaining Control Over the Growing SaaS Proliferation
CIOs can gain greater control over the proliferation of SaaS applications in their enterprise with five main tasks, according to CIO:
* Map the Flow of Crucial Data: When the data your company is working with turns out to be riddled with inaccuracies or is available inconsistently or turns out to be otherwise unreliable, it can slow you down, wasting employees’ time as they try to sort out the confusion.
Gain a better understanding of all mission-critical data and how it is flowing in different SaaS applications, so you can judge the value of those applications.
* Compile Details on What You’re Spending: As more and more employees use SaaS applications, it can be challenging to get a list of all of them.
But compiling a list of the software titles, their costs, and when their contracts are up for renewal will prepare your company to negotiate costs when it comes time to discuss contracts with vendors.
* Find Applications That Could Put the Company at Risk: Chances are that some applications you’re using now could put you in violation of regulations such as HIPAA, ISO, PII, PCI, and FedRAMP.
So, the list of applications you compile to understand costs will also be invaluable in finding older software that could expose you to fines for failing to adhere to industry standards and best practices.
* Get More Out of Data From Vendors with APIs: Connect with your various application vendors, to see if you can get more data or functionality out of their application programming interfaces.
You may be able to wring more value out of your IT spending when you assign a team to handle application integration, harnessing the vendors’ APIs.
* Report on Application Usage: A company doesn’t function optimally if it doesn’t have the facts about something as foundational as software usage. Using your tools to control access to applications, you can see how many employees are using a particular SaaS application, and how often.
At this point, you may opt to put a hold on adding any more applications. It will also be time to examine your policy concerning allocating software, such as whether the marketing department requires licenses for multiple project management applications or if the team can get by with just one.
Prioritizing SaaS Management
With so many different SaaS applications being used in your enterprise, it will be useful for you to prioritize their management. For example, you can identify if a department is using outdated software or is working with the least useful version of a particular application, cutting down efficiency.
You’ll also want to invest time in finding out which applications might make you run afoul of government regulations.
While SaaS will play a significant role in your company, there’s no point in letting its deployment proliferate to the point where it takes more time and effort to manage the various applications than the benefits might justify.
A thoughtful and prudent approach to SaaS application portfolio rationalization is the need of the hour.
Is your company struggling with the growing proliferation of SaaS Applications? How are you managing them?