When it comes to “software hygiene” at the modern company, many well-meaning companies don’t realize how bad their problem really is around managing licenses, vendors, and costs.
Our recently announced 2017 SaaS Optimization Best Practices Report clarifies this point:
“We live in an era where cloud business applications flood the modern enterprise at unprecedented rates. End users in departments and teams are procuring their own SaaS solutions, outside the guidance of IT departments. Meanwhile, Finance and Operations leaders overlook the overwhelming number of smaller subscriptions to focus on the largest investments. The result: thousands of dollars of wasted licenses and inefficient processes leave the business suffering from SaaS overload.”
As a CIO, do you think you’re company has good software hygiene around your cloud SaaS products?
Here are 5 questions CIOs must ask about their growing number of software applications:
1. Does anyone have an accurate list of all the cloud SaaS applications we have in our company?
If you don’t have that list, who does? Many finance and procurement teams struggle to make sense of all those “clever” names given to some of these software companies or those confusing resellers?
2. How well are we using all of these licenses and solutions we’ve bought?
The average company is wasting anywhere from 15-37% on under-utilized software (source: 1E report). A wise leader once told me, “Trust, but verify.” It’s a phrase that exudes empowerment, yet it’s coupled with accountability. “Are we really getting the impact that was sold to us in the sale pitch for this product/service?”
More importantly, what checks do you have in place with budget holders to measure that impact?
3. How empowered should teams/departments be to buy their own SaaS products/services?
Many SaaS companies sell to the end user at the team or department level. Sometimes it’s good for IT to let business units run with a lightweight technology that requires no help. Other times, teams fail to manage licenses and scopes appropriately (like IT has done for years with enterprise-wide software). What kind of partnership exists between IT and the departments to drive efficiency, maximize impact and deliver the greatest value to the company?
4. How are we responsibly re-evaluating impact, scope and alternatives before renewing with a cloud SaaS vendor?
The proverbial, “Yep, go ahead and pay that invoice” are 7 words that will get companies in trouble if they’re playing reactively with their SaaS vendors. Most companies leave money and increased impact on the table with vendors because they haven’t scrutinized the value they’re getting from this vendor before renewing. It’s like continuing to fill up your car with another quart of oil because you don’t have time to go figure out why it’s leaking so badly. How are you thinking and planning ahead before you have to renew with the vendor?
5. As a CIO, how have I prepared my team to adapt and take on new technology to drive our business forward?
How are you leveraging cloud-based solutions to scale and integrate where necessary? Or are your legacy systems continuously holding you back from the advantages of today’s technology?
Financially speaking, do you have a discretionary budget for opportune purchases of new tech that could dramatically lift your performance? These are the deeper questions that underlay how you manage cloud SaaS across the enterprise.
Overall the SaaS Optimization Report confirmed 92% of CIOs, CFOs and Operations Leaders, admit that they have some work to do:
If you can relate to any of those takeaways or to the five questions above, it’s probably time to start taking control of the software applications, licenses and vendors at your company.