SaaS Management

SaaS management is how organizations keep control of the cloud applications their people use. Modern companies often run hundreds of SaaS applications, many of them bought by individual teams or employees rather than through IT. SaaS management finds these applications, records who owns and uses them, manages user access, enforces security and compliance policies, and coordinates purchasing, renewals and retirement.

SaaS has made software much easier to buy, which is both its strength and its challenge. Applications can be adopted in minutes with a credit card, leading to duplicated tools, unused subscriptions and data stored in applications that IT does not know about. For IT financial management, SaaS management provides the visibility needed to control a fast-growing category of spending and to apply consistent governance across it.

Definition of SaaS Management

SaaS management is the discipline of managing the full portfolio of software-as-a-service applications used by an organization across their lifecycle. It covers discovery, ownership, access and identity, security and compliance, usage and adoption, contracts and renewals, and offboarding.

SaaS management overlaps with software asset management (SAM), which traditionally focused on installed software and complex license metrics. SaaS management adds a strong focus on identity, access and security, since SaaS applications hold company data outside the organization's own systems.

Discovery and Shadow IT

The first challenge is knowing what SaaS applications are in use. Many are bought outside central procurement, through expense reports and corporate cards, or used on free plans. This is often called shadow IT.

Discovery draws on several sources: single sign-on and identity systems, expense and accounts payable data, browser and network activity, and integrations with major platforms. Combining them produces an inventory of applications, owners, users and costs. Discovery should be continuous rather than a one-time exercise, since new applications are adopted every month.

Access, Security and Lifecycle

Each SaaS application controls access to company data. SaaS management ensures that users are added and removed in line with their roles, that applications meet security standards and that data is not left in applications after people leave. It also tracks which applications connect to each other, since integrations can move data between systems in ways that are easy to overlook.

Lifecycle management covers evaluating and approving new applications, onboarding them with appropriate security settings, monitoring use, renewing or consolidating contracts and retiring applications that are no longer needed, including retrieving or deleting data.

Each stage has a financial dimension. Approval is the point to check whether an existing tool already meets the need, onboarding is when licenses are assigned, and retirement is when costs should stop, which only happens if subscriptions are cancelled rather than left to renew.

Importance of SaaS Management in IT Financial Management

SaaS spending has grown rapidly and is spread across many budgets and buyers. Without SaaS management, organizations cannot see their total SaaS cost, let alone control it.

SaaS management also connects cost control with security and compliance, which share the same underlying data.

Because SaaS is so easy to buy, the gap between what IT knows about and what is actually in use tends to grow quickly unless it is actively managed.

Visibility and Control of Spending

SaaS management reveals the full portfolio and its cost, often showing many more applications than IT expected. It identifies duplicate tools serving the same purpose, unused subscriptions and licenses assigned to people who have left.

This visibility is the starting point for SaaS spend management, which focuses on reducing costs through consolidation, rightsizing and better negotiation.

Security and Compliance

Applications that hold customer data, financial information or intellectual property must meet the organization's security and compliance requirements. Unmanaged applications may not, creating risks that are invisible until something goes wrong.

Former employees who retain access to SaaS applications are a common security gap, especially for applications that are not connected to single sign-on. SaaS management connects application access with HR and identity processes so that access is removed promptly when people leave or change roles.