In the 1700s, Benjamin Franklin writing under the pseudonym Richard Saunders for his yearly publication — Poor Richard’s Almanac — is supposed to have given profound advice: Beware of little expenses. A small leak will sink a great ship. 

An average company uses over 250 SaaS tools; not all come into the system through a predefined procurement process. Of this, even one unused SaaS license can add up to thousands of dollars over a year. This is the problem a thorough and automated SaaS user management solution will solve. 

In this guide, we will look into the following:

  • Complexities organizations face in their SaaS user management
  • What effective SaaS user management should look like
  • Proven best practices while implementing a SaaS user management system
  • How to choose the right SaaS user management tool for your business

Complexities of SaaS user management

Employees today buy SaaS tools in two ways: by raising a request with the procurement team or buying them directly and reimbursing the expense — a process we call decentralized buying. This creates several complexities in the way access, costs and security are managed. 

Shadow IT from decentralized purchasing

When employees try and buy their own software for their work, it opens up several challenges around redundancy, overpaying, security and, critically, user management. For instance, if an employee buys marketing automation software without going through procurement channels, the CFO wouldn’t have visibility into the following:

  • How many team members are using it
  • How long the contract is for
  • What head should that expense be accounted under
  • Should they be accounted as Cost of Goods Sold (CoGS) or not
  • What data the tool has access to, etc.

Unplanned SaaS renewals

SaaS contracts are structured to be renewed every month/quarter/year. Without a robust user management system, the CFO would end up paying indefinitely — due to automatic renewal setups — irrespective of the tool being used or the user belonging to the organization. 

Moreover, renewal dates are an excellent opportunity to renegotiate and optimize SaaS contracts. A lack of user and usage tracking will hinder CFOs and procurement teams from having the right negotiation levers. 

Low adoption and negative user sentiment

Given how easy it is to try/buy SaaS, it is common for employees to sign up for multiple tools. However, they might not be actively using all of them or even find those they use satisfactory for their needs. 

Without a sound user management system, organizations cannot track adoption, usage, sentiment and satisfaction with their SaaS tools.

Unfounded cost optimization

Gartner found that 25% of a company’s SaaS tools are unused or underused. How would a CFO know which 25% is wastage? Often, finance leaders make assumptions with whatever data they have and cut costs. This ends up being detrimental to the team’s efficiency and productivity.

Key elements of effective SaaS user management

Effective SaaS user management is the practice of tracking access, permissions, usage, data-sharing and security. The components of SaaS user management are:

SaaS license tracking

Licenses and contracts are typically scattered across emails, Slack, local folders and digital sign tools. A good user management system enables real-time monitoring of who uses what tool, which license they have, the license terms, whether it auto-upgrades, how long the contract is for, etc.

Access management

A recent study found that “84% of the companies had employees using an average of 3.5 SaaS applications that were breached in the previous three months.” Hacking a SaaS tool to access privileged company data is a widespread security threat today. Robust user access control can help prevent it or the least alert cybersecurity teams when a break occurs.

Visibility and control

You can control or optimize only things you can see. A comprehensive user management system that is updated in real-time gives visibility into the entire technology landscape. This empowers the organization to respond quickly to several situations:

  • Revoking the tool access when an employee leaves the organization or switches teams
  • Cutting off access to accounts that have been compromised
  • Downsizing tools that are not critical or widely used
  • Preventing password-sharing or unauthorized use

Administrative efficiency

Onboarding and offboarding a user on every tool takes significant time and effort from procurement, finance and IT teams. A good SaaS user management tool minimizes this administrative burden by automating processes and sending timely alerts as needed.

On the other hand, a centralized tool to request new tools or renewals empowers employees to manage their own access, further reducing administrative overhead.

Data security and compliance

When there is a centralized location from which all SaaS user accounts are managed, ensuring the consistent application of security protocols and access controls becomes infinitely simpler. It can also accelerate compliance through automated reminders.

Cost optimization

The last but most important element of effective SaaS user management is the right sizing of costs. A consolidated view of all SaaS users and usage enables the CFO to reduce costs by optimizing licenses, eliminating unused subscriptions, negotiating contracts and consolidating vendors.

Proven SaaS user management best practices

Conduct regular SaaS audits to identify unused or underutilized licenses. Next, optimize spending by reallocating licenses or canceling subscriptions as needed.

Continuously monitor the SaaS tool stack to assess its relevance, usage and value. If a tool is unused for an extended period, send user sentiment surveys to check if your team needs it. If two similar tools are being used within the organization, consider consolidating them. 

Leverage usage data to negotiate better terms and pricing with SaaS vendors. For example, if a tool is highly critical to your business but not very much liked by your teams, you can find an alternative tool or train them to use it more effectively.  

Accelerate approvals by letting leaders make decisions quickly from wherever they are. Integrate with Slack, where people can receive requests and reminders and approve them from right within. 

Keep an eye out for new tools or upgrades to existing tools. The SaaS market is constantly evolving, with every vendor adding new features constantly. A good SaaS buying platform can help evaluate these advancements and measure the cost of making the switch.

Choosing the right effective SaaS user management platform for your business

User management platforms are a dime a dozen. But not all of them are created equal. SaaS user management is especially complex because it needs to handle a number of tools, different licenses, varying contract terms and so on. So, a good SaaS user management platform needs to have the following.

Ease of onboarding: Does the platform make it easy to bring your existing SaaS stack into one place? For instance, ​​Spendflo integrates with Microsoft Azure Active Directory and Okta

Scalability: Does the platform scale well with the growing number of SaaS tools and users?

Vendor trust: As the number of vendors you buy SaaS tools from increases year-on-year, does your user management platform accelerate onboarding based on the vendor’s reputation, experience and level of customer support?

Integration: Can it seamlessly integrate with your existing IT infrastructure and SaaS tools? Spendflo integrates effortlessly with Slack allowing you to perform a number of tasks from right within.

Reporting and analytics: Does it offer robust reporting, customizable dashboards and meaningful analytics about your SaaS usage? Spendflo’s Spend Analytics does all this and more.

User experience: Is the platform intuitive, user-friendly and aligned with your organization's user expectations?

Compliance and security: Does it provide strong compliance and security features, including access controls and data encryption?

Once you have the answers to the questions above, request a trial or demo before making a final decision. Evaluate its usability and determine if it aligns with your organization's goals.

Simplify and optimize SaaS user management with Spendflo

See how Spendflo’s user management features help you onboard faster, prevent wastage, save costs and ensure security. Book a demo now.

Ajay Ramamoorthy
Karthikeyan Manivannan
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