A Simple Guide to SaaS Vendor Management in 2021

A Simple Guide to SaaS Vendor Management in 2021

This should be the year when you finally put a SaaS vendor management system in place. Ineffective SaaS vendor management leads to wasted money and resources.

In this guide, we’ll explain what SaaS vendor management is, why it matters, as well as some basic principles to not only reigning in your costs but ensuring that you make the right decisions for your business this year and well into the future.

What Is SaaS Vendor Management?

“Vendor management” isn’t a new concept, but SaaS vendor management is, given the immense popularity of software-as-a-service. What does vendor management mean in the context of SaaS?

Managing vendors is about:

  • Finding the vendors that offer the right service or solution
  • Negotiating the best contract for your company
  • Ensuring you’re not dealing with too many vendors
  • Mitigating vendor risk
  • Establishing relationships with vendors that benefit the customer, rather than just the vendor

SaaS vendor management is about making sure that:

  • You’re using the right SaaS applications for your firms
  • You’re getting the best contracts with SaaS vendors
  • You cut down on duplication – you’re not dealing with SaaS vendors who provide similar solutions
  • You reduce vendor risk
  • You create relationships with the SaaS vendor where you have greater leverage in the renewal process

Why Is SaaS Vendor Management Important?

Now that it’s clear what SaaS vendor management is, let’s look at why it matters to the enterprise.

Today, there are a record number of SaaS application users in the enterprise. Firms with up to 50 employees use between 25-50 apps, while companies with over 250 employees use over 100 applications.

Thanks to shadow IT, employees feel empowered to use whatever apps they like to get their jobs done, regardless of the effect on the company. As a result, the IT department has limited visibility into which apps employees are using, or whether they’re even safe.

Moreover, when you renew a contract with a SaaS vendor, are you getting the best possible terms? Are you paying for licenses and features you don’t need (or that employees aren’t really using)?

SaaS vendor management ensures you use the right apps that are safe for your company without spending more money than necessary.

SaaS Vendor Management Best Practices

With all of that in mind, let’s explore some SaaS vendor management best practices. Here are a few things to understand about effectively managing SaaS vendors:

  • Automation is critical for SaaS vendor management
  • You need visibility into SaaS apps
  • It’s not just about the licenses

Automation Is Critical for SaaS Vendor Management

There’s one thing that you should know about SaaS vendor management: there are many moving parts. You have to track:

  • The number of seats per app
  • Cost per subscription
  • Renewal dates
  • Who “owns” the app
  • The app’s compliance status
  • Any processes related to onboarding, security, and privacy

That’s why using manual methods such as spreadsheets doesn’t work well. They don’t automatically update when there’s a change (such as when you add a license or give one up). As a result, you don’t have an accurate way of tracking the true number of licenses you have, or any information that’s related to licenses.

Whichever SaaS vendor management system you choose, it must be automated. Automation ensures that no one has to enter information into a document – it comes out of systems of record without human intervention. With automation, you never have to worry that your SaaS vendor management system is out of date or contains inaccurate information.

You Need Visibility into Your SaaS Apps

Another crucial part of SaaS vendor management is gaining visibility into your SaaS apps. Gaining visibility allows you to see:

  • What apps your employees are using
  • Who’s using which apps
  • How many people use a given app
  • If there are any redundant apps (for example, you’re paying for a Webex license, yet your employees have downloaded Zoom for free)
  • If there are any apps that are “orphaned” (meaning there’s no clear line-of-business owner)

Did you know that 71% of organizations have orphaned apps? Furthermore, were you aware that the cost of orphaned apps can be as high as $8,520 every year per subscription?

When you have visibility into your apps, you can avoid orphan apps, redundant apps, as well as apps that put your firm at risk for hacks.

It’s Not Just about the Number of Licenses

Don’t get us wrong – purchasing the right number of licenses is important. However, there’s another secret to SaaS vendor management: the business value of applications.

What do we mean by “business value”?

Business value looks at both the tangible and intangible benefits you gain from using an app. We’re all familiar with the tangible benefits – cost savings and revenue boosts are the first things that come to mind – but we often tend to gloss over intangible benefits, such as greater productivity, a better employee experience, and whether the apps you’re using fit into your overall business strategy.

The next question, then, is how do you determine whether an app is bringing value into your business?

You need a SaaS vendor management solution that gives you an in-depth insight into who’s using your apps and how you’re using them.

Productiv: Giving You Insight into the Business Value of Your Apps

Productiv’s SaaS vendor management solution gives you insight into the business value of your apps. It shows you:

  • Gaps in the adoption of specific features or within specific teams
  • Collaboration patterns across your organization
  • Which apps drive the greatest collaboration
  • Which apps are redundant
  • Whether you need to upgrade to the next tier or downgrade to a lower tier
  • How you’re doing relative to other companies in your industry

With Productiv, you can effectively manage your relationship with SaaS vendors by making decisions based on analytics, rather than guessing how many employees are using apps, or if they’re using these apps to the fullest extent possible. Not only will you save money, but you’ll be using apps you actually need to drive your business forward. Learn more.


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