What is SaaS management?

The SaaS revolution has changed how businesses operate, making software more accessible than ever. But this convenience comes at a cost: IT and finance teams lack visibility into untracked subscriptions and scattered information. Companies are wrestling with chaotic spreadsheets and endless expense reports to make sense of their SaaS landscape. The result? Hours of tedious administrative work each month.

Worse still, the lack of a single view of all SaaS applications leads to significant financial waste, resulting in redundant apps, unused licenses, and overspending on contract renewals. For example, in some apps at Zuora, unused licenses represented up to 20% of the user base.

Understanding which SaaS applications are being used and paid for across the organization is crucial for controlling SaaS sprawl, optimizing costs, and securing access to business applications. 

In an age where SaaS is a major line item in the budget, the need for a disciplined approach to managing these subscriptions has never been more urgent. But how do organizations take control of this complex, ever-changing landscape? The answer lies in SaaS management platforms, a product category designed to solve this exact problem.

The case for SaaS management platforms

A SaaS management platform (SMP) is a purpose built product designed to help organizations track, control, and optimize their SaaS environment at scale. In practice, it gives IT and finance teams a centralized way to understand what SaaS apps are in use, how those apps are being used, who has access to them and what they cost. Teams can then take action through workflows that support the employee lifecycle, access reviews, license optimization, and contract renewals. In other words, SMPs turn SaaS from a growing collection of subscriptions into something you can actively manage.

The financial impact

Manage unmanaged SaaS subscriptions

When SaaS subscriptions are unmanaged, it can lead to ‘SaaS sprawl,’ a term that means the uncontrolled growth of SaaS apps within an organization. The costs are twofold: financial waste and unused resources. In a world where many SaaS vendors offer easy subscription models, it’s common for departments or even individual employees to buy SaaS tools. Without oversight, this can quickly lead to duplicate tools, unused licenses, and spiraling costs. Companies that adopt SaaS management best practices can streamline workflows, reduce costs, and gain visibility into all SaaS subscriptions. 

Spend optimization

Optimizing SaaS spend is about getting the most value out of your investment. Regular SaaS usage auditing ensures the organization isn’t paying for redundant or underutilized services. Using data from their SaaS management platform, companies can determine how many licenses they actually need, negotiate better contract terms, and ensure they’re using the most cost-effective SaaS apps for their needs.

Security risks and compliance requirements

Automating SOC 2 audit records

Meeting security compliance standards are often a top concern for organizations using third-party SaaS vendors. A key certification to look for is SOC 2, which sets strict standards on security, availability, and data integrity. This is where SaaS management platforms (SMPs) come in. They provide insights into an applications’ security certifications, and automate critical security operations like access requests, access reviews, and onboarding/offboarding processes. By doing so, they make the process consistent, auditable, and SOC 2 compliant. Implementing a SaaS management platform can help reduce the risk of unauthorized access and data breaches.

Data governance in a SaaS ecosystem

Data governance is a must when dealing with multiple SaaS vendors that handle organizational data. Again, an SMP can help here. By providing automated frameworks for data storage, access and sharing protocols, SMPs create a streamlined and auditable path to compliance with international standards like ISO 27001. Not only is data managed compliantly, but that compliance is provable, a key requirement for both internal and external governance.

Operational efficiency cross-team

Workflow silos

Without a SaaS management platform or strategy in place, different departments often operate in silos, each with its own set of tools. Workflow silos can lead to inefficiencies like duplicated work, inconsistent data, and slower processes, all of which are bad for operational efficiency. A common example are project and work management tools, where you may find several similar apps in use within and across teams.

Disjointed SaaS tools and productivity

When a SaaS management tool is not in place, and SaaS tools are disjointed and don’t integrate, IT, security, and finance teams must spend extra time manually transferring data between systems. This can lead to errors, reduced productivity, and ultimately frustrated teams who are bogged down in administrative tasks instead of focusing on their core work.

The same SaaS tools that are supposed to simplify operations can become barriers to cross-functional collaboration if not properly managed. When each department uses different tools without a centralized management strategy, it can create communication and data sharing challenges across the organization.

Aligning SaaS portfolios across departments

To get true cross-functional benefits, you need to align SaaS portfolios across different departments and business units. This alignment ensures that all departments use the same set of tools to support the organization’s overall goals. Centralized SaaS management can help identify the right tools for each department while facilitating cross-functional collaboration.

SaaS management is critical for financial discipline, security frameworks, operational efficiency, and cross-functional collaboration within organizations. It’s not a task to be delegated, but a strategic imperative that impacts the organization’s bottom line and operational excellence.

SaaS management platforms: A unified solution

SaaS management platforms like 1Password SaaS Manager manage and control the usage, costs, compliance, and security of SaaS applications across the organization. They act as a command center, giving a single pane of glass into the entire SaaS estate. For organizations struggling with SaaS sprawl, compliance issues, and operational inefficiencies, SaaS management platforms offer a simple solution. These platforms automate many tasks that would otherwise require manual intervention such as inventory tracking, cost optimization, and employee lifecycle management. By consolidating these tasks into one platform, organizations can save time, reduce errors, and make better decisions.

Features to look for in a SaaS management platform

Inventory tracking

One of the key features to look for is robust inventory tracking. This feature, commonly known as ‘discovery’, will give you a list of all the SaaS applications in use, the departments that use them, and the cost associated with each. 

Spend analysis and optimization

An SMP should have tools to analyze the cost of each SaaS application and identify opportunities to optimize spend. This will allow organizations to retire ‘zombie’ apps, optimize license usage, and renegotiate existing contracts on better terms.

Employee lifecycle management

SMPs should manage processes for employee onboarding, offboarding, ad hoc access requests, and access reviews, so that employee access to business-critical tools is managed in a timely, efficient, and auditable way.

How to choose a SaaS management platform

Choosing a SaaS management platform involves considering many factors, but it helps to start with a simple question: what do you need the platform to do in your environment?

At a minimum, an SMP should help you discover every SaaS app in use, managed or unmanaged, before it introduces risk. It should identify unmanaged tools and AI applications not covered by SSO. It should automate onboarding, offboarding, access requests, and access reviews across all apps, even those not behind SSO. And it should link license usage to contract data so you can eliminate waste and optimize renewals.

Ultimately, you are looking for a shared system of record that aligns stakeholders around access, usage, cost, and risk, and delivers measurable cost savings opportunities you can take to leadership.

Once those outcomes are clear, four practical criteria will help you compare vendors:

• Scalability: The platform should scale with your organization. As you add more SaaS applications, it should be able to manage them without performance problems.

• Integration reliability: To be effective, SaaS management platforms need to integrate with the other tools in your business. It is easy for a vendor to claim they have hundreds of integrations. What matters is whether those connections are reliable, maintained, and accurate, and whether the data you are using to make decisions can be trusted.

• Ease of use: A platform that requires extensive training will hinder adoption and reduce effectiveness. Look for platforms with intuitive interfaces and easy navigation so the team can actually use the workflows day to day.

• Vendor reputation: Always check reviews and ask for references. A platform is only as good as the company that backs it. Look for vendors with a track record of excellent customer support, continuous updates, and a strong customer base.

SaaS management platforms address many of the challenges organizations face in managing their growing SaaS environments. By choosing a platform that has the right mix of capabilities, scalability, and support, organizations can take a big step toward improving operational efficiency and SaaS ROI.

Best practices for SaaS management

SaaS management doesn’t stop with choosing the right platform. Organizations should have an ongoing strategy for managing their SaaS ecosystem. Here are some best practices to use as the foundation of a SaaS management strategy.

Monitoring, not auditing

The software audit mindset was born in the days of installed and hosted software and is becoming an outdated Software Asset Management approach. SaaS adoption and license consumption is far more dynamic, so SaaS management needs to be equally agile. Regular monitoring of your SaaS portfolio is key to identifying duplicates, underutilized resources, and potential security vulnerabilities. Best practice is to automate this monitoring wherever possible. The practice will not only keep you on top of your inventory but also give you visibility into usage patterns which can be invaluable when renegotiating contracts or planning for scale.

Inter-departmental communication

SaaS tools serve multiple departments within an organization; clear and regular communication between departments is key to avoiding duplication and ensuring everyone’s needs are met. All employees should know what SaaS tools are already approved and in use, whether in their department or elsewhere in the organization. When a business need can’t be met by an existing tool, there should be a process for reviewing options and trying to address additional business needs with any new tool wherever possible. This will prevent duplication and encourage more cross-functional collaboration.

Transparency is about sharing knowledge on how different tools are being used effectively, lessons learned, and best practices. This type of information sharing will boost productivity across the organization.

Keep it personal

SaaS management sits at the intersection of multiple departments and, critically, the relationship between IT and their ‘customer’ i.e. the end user in the business, employees. 

From employees requesting access to new tools, to the workflows that ask employees to return their underutilized licenses, human interaction is a key part of any SaaS management program. This means meeting employees where they are (e.g., Slack or Microsoft Teams) and using language that is clear and collaborative. The days of IT sitting in the control tower and issuing instructions are behind us. The modern, distributed workforce expects a partner in IT, and that’s an opportunity for IT to move out of the back office and take the strategic role it deserves.

Implementing these best practices will help you refine your SaaS management strategy. When combined with a SaaS management platform, these best practices will help organizations navigate the SaaS ecosystem and maximize efficiency, cost savings, and security.

Next steps: How to make a business case for SaaS management

In an era where SaaS tools are no longer optional but part of business as usual, SaaS management is a strategic imperative. Unmanaged SaaS spending risks financial waste, security vulnerabilities, and even legal issues especially with standards like SOC 2 in play.

A SaaS management strategy in place, backed by a platform like 1Password SaaS Manager, can turn this complexity into an asset. Add in best practices like regular monitoring and inter-departmental communication and SaaS tools become not just utilities but business enablers. In short, disciplined SaaS management is not a nice to have, but an absolute necessity for risk mitigation and competitiveness. Convinced you need a structured SaaS management platform but not sure how to make the business case for it? Contact us to learn more about 1Password SaaS Manager