How SaaS Application Optimization Controls Costs and Manages Risks

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How Does SaaS Application Optimization Control Costs and Manage Risks?

The growing use of software-as-a-service (SaaS) has gained incredible momentum in recent years. In 2015, organizations used fewer than 10 SaaS applications on average. By 2021, that average had risen to 110. While SaaS offers tremendous business value, you need an application optimization process to control expenses and minimize security risk.

Over time, your business accumulates unnecessary or redundant applications as your needs and technologies evolve. Those unneeded applications add to your expenses, create opportunities for error and increase the risk of security failures. More SaaS applications means your company is more vulnerable to ransomware and phishing attacks, resulting in security and data breaches that can cost companies $4-9M on average.

By regularly reviewing and assessing your organization’s applications, you can identify cost-saving opportunities and potential vulnerabilities. While your business can quickly realize some benefits of optimization, this is an ongoing process you can tackle in numerous ways.

Regardless of what process you choose for app optimization, there’s a wide variety of resources and support available. Learn how optimizing SaaS applications helps your organization take control of costs and risks, and check out our tips for getting started.

What Are the 4 Benefits of SaaS Application Optimization?

Optimizing applications requires reviewing some of the most important aspects of your business performance. Here are some of the most common benefits of this process.


Reduced Costs

Lowering your costs is one of the biggest benefits of application optimization. When you optimize app subscriptions, you reduce wasted and unnecessary spending while lowering future costs.

Reviewing your applications can help you identify and remove apps that aren’t needed and don’t provide value. This process also helps your long-term cost strategy because you better understand your current spending, your needs and what’s most important to your organization. You can also apply those insights to negotiations with potential vendors, further reducing your expenses.

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How Do You Manage Risk with SaaS?

SaaS applications have a wide range of potential uses and can benefit employees at every level of the enterprise. These tools can be easily obtained and accessed, which also introduces additional risk to your organization from shadow IT. That term describes when people use software or devices without the knowledge or approval of your organization’s IT department.

Application optimization allows you to manage this risk by helping you identify and resolve potential data and security vulnerabilities. This helps you avoid the potential issues associated with security risks, such as compromised and lost data, additional expenses, fines and lower confidence.

How Can You Achieve Improved Efficiency and Productivity?

Optimizing your apps isn’t just about reducing costs. The process also helps you find the most efficient and productive license usage management workflows for your organization. Optimization highlights how applications are used, along with what problems they’re solving, and provides an opportunity to better track and allocate resources where they are needed most, particularly as employees enter and exit your company.

When you streamline your applications, you can focus resources where they’ll drive the greatest benefit, such as reducing response time. Meanwhile, employees don’t have to guess the best way to accomplish a task. Making work easier improves employee satisfaction and engagement, which also contributes to greater efficiency and productivity.


Can You Get Greater Visibility Into Your SaaS Stack?

One key aspect of optimization is gaining comprehensive visibility into your inventory. This includes vital metrics and information, such as the total number of users you have and key renewal dates. This centralized view of your SaaS stack enables better decision making and planning, helping you stay on top of important updates and key events, usage patterns and trends.

With a deep understanding of your SaaS usage and performance, you can also identify areas that may be underperforming and develop a plan to address them. This is critical to improve performance, control costs and manage risks.

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How to Optimize Your SaaS Applications

While there are many variables, some of which are unique to your organization, there are also fundamental ways to start optimizing your SaaS applications. Here are five steps you can take.
Conduct an Audit of Your SaaS Apps
Complete a cost-benefit analysis of your applications and determine how you’ll prioritize each of them. Consider organizing applications based on total investment, total number of users, renewal date or other factors specific to your business. Determine what critical applications you have that are essential versus those that can be consolidated or terminated. The audit also helps inform forecasting efforts.
Remove Unused SaaS Applications
Once you’ve identified unused or little-used applications, you can uninstall or otherwise remove them. Use a SaaS management platform or the application’s management dashboard to view log-in and usage activity. This step also helps you identify employees who are overprovisioned, as well as inactive users and even former employees who still have access.
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Consolidate SaaS Licenses
During the optimization process, you might discover opportunities to consolidate applications for additional cost savings. Examples include reducing multiple licenses for a single application or finding an alternative solution that offers greater flexibility. For example, if teams are using redundant programs for similar projects, consider reducing them to a single application with overlapping functionality. Consolidation can also lead to cost and service efficiencies, as you might get discounted rates or expanded services when increasing the total number of users.

Negotiate SaaS Contracts

Once you’ve removed and consolidated unnecessary applications, you should have a clear understanding of your optimal environment. From there, continue to look for savings, including by negotiating with your suppliers. You might ask for price reductions in exchange for long-term agreements or additional users. Use these opportunities, including renewals, as a chance to review contract terms and possible alternatives.
Keep Monitoring Your SaaS Usage

Reviewing your costs on an ongoing basis helps you stay optimized, efficient and in budget. It’s also important to remember that app optimization takes time. Begin by focusing on incremental change. This helps you learn from previous optimization efforts while continuing to improve. Repeat the optimization process frequently to keep up with changes in your applications and workforce.

6 Tips for SaaS Business App Optimization

After completing your initial optimization efforts, there’s always more to be done. Here are six tips for continuing your application optimization journey.

Prioritize Security
Make sure your apps are configured with the appropriate security protections, such as two-factor authentication and encryption, and that you have a plan for monitoring and responding to security incidents. This preparation is critical for managing risk, staying in compliance and avoiding the pain of breaches and ransomware. Prioritizing security measures can also improve app stability and performance, which promotes trust and engagement from users.

Use Automation

Consider automation tools to help you streamline services and free up more time for your team to focus on other important work. For example, automated bill pay processes can ensure you maintain continuous service and avoid late fees without the need to manually manage payments.

You can also use automated services to expedite invoice approvals and help reconcile usage across invoices and contracts. By cutting the need for manual reconciliation, you can drastically reduce the risk of errors and improve data accuracy. Not only does this improve tracking and performance, but it can help you make more informed business decisions.

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Implement SaaS Governance
SaaS governance is a set of practices and processes that ensure your applications are used effectively and efficiently. Establishing SaaS governance includes creating policies for the procurement, use and disposal of applications. One of the biggest benefits of SaaS governance is giving your IT department centralized control over your organization’s SaaS usage. It can also improve your overall security by making sure only authorized users have access and that data is properly secured.

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Test Multiple Optimization Techniques

There are numerous techniques for optimizing applications, including performance, resource usage and user experience. Each technique has advantages and drawbacks, so test them to determine what works best for your business.

One technique is mathematical optimization, which is the process of optimizing based on the best solution to a mathematical problem. For example, linear programming is a mathematical optimization technique that’s used to determine the best solution for a problem with given constraints, such as optimizing available resources.

Computational optimization is another process to consider. It involves finding the best solution for a problem by using algorithms to explore all possible options and determine the most appropriate. This technique helps when optimizing factors such as time or resource usage.

Achieving the best results often requires a combination of optimization techniques over time.

Develop a Renewal Plan
Take a proactive approach to application renewals. This is where a solid audit, complete inventory and deep visibility help you understand what apps you’re responsible for, when they need to be renewed and on what terms. When you see renewals coming, you can negotiate better terms based on your needs and ongoing usage. Make sure you compare your vendors against alternatives for price and value.
Partner With a 3rd-Party Expert
While there are numerous ways to optimize your applications on your own, many organizations turn to third-party experts. Certified partners use their specialized knowledge and experience to guide you through the process. Whether they track a database of hundreds of cloud application providers or they analyze the way their collective customer base spends millions on technology, they can help you understand your options and decision variables, and they offer proven methods for optimizing application investments. Look for an expert that provides the resources and support you need to reach your goals, including tools to help with cost and ongoing usage monitoring to capitalize on new opportunities. It’s also important to consider how a partnership can help you review your environment and provide regular insights

Making the Most of SaaS Application Optimization

Application optimization is a complex but increasingly important project for businesses, and many are partnering with cloud management service and solution providers. Gartner estimates that by 2025, 90% of large organizations using legacy cloud applications will use external service providers for additional support.

Whatever your approach, do your homework, follow best practices, and see what works best for your circumstances. Continue to monitor and analyze your applications for new opportunities to improve performance and reduce expenses.

Ultimately, application optimization is essential for any organization that relies on SaaS applications. This process can be challenging and time-consuming, but by taking advantage of the resources, tools and support available, your business will reap the rewards.

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