SaaS has helped companies in optimizing operations but failure to track subscriptions can hurt a company’s finances. Optimize software spends with...
A Business Owner’s Guide to SaaS Subscription Management Software
As more companies opt into SaaS subscriptions, demand for SaaS subscription management software rises. Use Spenmo to manage your software subscriptions.
And while these developments are exciting for smaller companies and allow them to adapt and compete in the market with access to cutting-edge technology, there are some challenges too.
For one, most businesses don’t have the tools or systems in place to manage multiple SaaS vendors and recurring payments. This can result in overcharging, missing cancellation dates on recurring billing, and overlaps in software which leads to unnecessary payments.
What is SaaS subscription management software?
The rising number of SaaS subscriptions that the average company opts into has resulted in a demand for SaaS management software.
These platforms or systems aim to track and manage a company’s SaaS subscriptions to avoid unnecessary payments or overcharging. They also optimize a company’s use of software by minimizing overlaps in the types of software purchased.
This is normally achieved by giving companies a more comprehensive view of payments made monthly or annually – all through a single dashboard or interface.
What’s the difference between IaaS vs PaaS vs SaaS?
It’s easy to get confused between infrastructure, platform, and software-as-a-service since three are hosted in the cloud. We identify its differences below:
Infrastructure as a service (IaaS)
Unlike on-premise solutions, IaaS allows users to buy resources on-demand instead of outrightly purchasing hardware. By delivering cloud computing infrastructure, IaaS clients are able to manage their infrastructure without physically housing servers.
All servers are outsourced through a virtual data centre in the cloud, saving IaaS users the need to physically maintain hardware.
Platform as a service (PaaS)
PaaS are cloud platform services that provide components of software to be used for applications. These services deliver frameworks for developers to expand upon and create their own customized applications. However, developers only need to maintain management of these applications, while servers, storage, and networking are handled by third-party providers.
Software as a service (SaaS)
Software as a service, or cloud application services leverage the internet to deliver applications to users on an on-demand basis. Most SaaS applications are run through web browsers and do not require clients to download or install the service.
The advantages of SaaS
The main advantage of Software as a Service platform is that they don’t need to be managed by users. These services are managed completely by third-party vendors, saving your business the headache of managing, maintaining, and upgrading software and requiring you to hire an extensive IT team.
Without the need to constantly fix bugs and maintain software, technical staff is free to focus on other work within your business.
What are the typical SaaS platforms companies use?
Customer Relationship Management
Customer relationship management (CRM) involves the ways companies interact with their customers in the most effective ways possible. Through the use of data, companies can decide how to customize and improve their interactions with customers with CRM tools.
Examples of SaaS CRM software: Salesforce
Enterprise Resource Planning
Enterprise resource planning (ERP) software helps businesses keep a birds-eye view of all main business processes within your organization. This could involve finance, HR, inventory management, sales and ongoing projects.
Examples of SaaS ERP software: Oracle Fusion Cloud ERP, Sage X3, SYSPRO
Accounting software is what keeps track of all outgoing and incoming transactions within your company and is typically deployed by the Finance department. Automated accounting software can be extremely useful to reduce the workload of your Finance team.
Examples of SaaS accounting software: Quickbooks, FreshBooks, Sage 50Cloud
Content management system (CMS)
Content management systems (CMS) are used to house all content within a business in an organized and streamlined way. SaaS CMS platforms offer businesses a way to streamline their content through web services without having to download or install software.
Examples of SaaS CMS software: Magento, Joomla, Wix, Squarespace
E-commerce software is considered the backend of a business’s online store. Using this software, businesses can sell products, manage their inventory, accept and process payments and handle fulfillment.
Examples of SaaS e-commerce software: BigCommerce, Shopify, Volusion
Expense management software
Expense management software allows businesses to track transactions within their company in an automated fashion.
Instead of asking employees to fill out expense reports and submit claims manually, these platforms allow employers to track all transactions automatically.
Spenmo’s expense management solution does exactly this and helps companies have a bird’s eye view of all expenses within a single interface. Transactions are tracked using automation in real-time, creating seamless workflows for employees, the finance team as well as management.
Why businesses need SaaS management software
Despite the clear advantages, using SaaS for your business requires meticulous renewal management – especially when using multiple services.
On average, businesses use 137 different SaaS services. Managing these monthly subscriptions to different vendors can be time-consuming and ineffective without optimization of SaaS management processes.
This often results in overcharging due to missed cancellation dates, overlapping subscriptions for similar services and ignoring low SaaS usage for certain software.
Many companies are turning to SaaS management softwares to more efficiently streamline their SaaS subscriptions instead of relying on more traditional methods like Microsoft Excel spreadsheets.
Why tracking SaaS subscriptions with an Microsoft Excel or Google spreadsheet is inefficient
But wait, you might be thinking. Why not track SaaS subscriptions through an Excel or Google spreadsheet? Wouldn’t that be sufficient?
The reality is that a spreadsheet is not sufficient to effectively track and manage ongoing subscriptions, regardless of how many or few Saas solutions your business uses. Here are a few reasons why.
Any system that requires manual entry is prone to errors, and spreadsheets tracking SaaS subscriptions are no exception.
This could involve something as simple as forgetting to notify someone you’ve made changes to the document or it could be multiple typing errors that add up over time.
Eventually, with all the tiny mistakes left unchecked, you get a less clear view of what your ongoing SaaS subscriptions and payments actually look like.
With the average company taking out 137 SaaS subscriptions at a time, keeping on top of ever-changing subscriptions can be a headache if managed using a spreadsheet.
Part of the appeal of SaaS subscriptions is that they can be opted into and out of easily through a simple subscription cancellation. However, this is exactly what makes it tricky to track manually.
On top of that, different software typically varies in subscription billing rules, payment methods, owners across different business units, and usage metrics – making managing them all using a spreadsheet all the more complicated.
SaaS license management for software licenses for software used by different departments can also prove a challenge without proper vendor management.
Tracking SaaS subscriptions using a Microsoft Excel or Google spreadsheet ultimately means that at least one of your employees will be tasked with updating it frequently.
With the sheer volume of data involved with new or ongoing subscriptions, effective tracking is impossible for a single person to handle. The more contributors add input to the spreadsheet, the more room for errors when employees fail to communicate amongst each other about updates made in the document.
Every hour employees spend manually tracking these subscriptions is an hour that could be spent by them contributing in a more productive way.
What challenges to expect in SaaS management and how to overcome them
Security & compliance
When procuring SaaS software, employees often do not need to run their selections through the IT department. This can compromise your business’s security when software installed leads to potential data breaches.
Employees often have usefulness and user-friendliness in mind when selecting software, neglecting to inform IT before purchasing it. Shadow IT occurs when employees sign up for online cloud services without the authorization of IT. 83% of CIOs report unauthorized cloud provisioning within their organization.
Without a procurement process where both parties have a clear view of SaaS software being purchased, your business is left vulnerable to data breaches and security attacks.
SaaS spend management
Managing SaaS applications using an Excel sheet that is updated by IT and employees is often inefficient and makes it more challenging to optimize SaaS subscriptions.
Without knowing the total amount being spent on these subscriptions for applications purchased by different departments, setting budget goals can prove challenging for management.
This lack of visibility also leads to app redundancies with multiple similar SaaS apps purchased but kept unseen by management. With recurring payments every month, it can be all too easy to let payments roll every month for under-utilized SaaS investments.
To counter this, companies are turning to SaaS software asset management tools to empower their employees in procuring software while still maintaining access control and visibility of purchases for IT and management.
Limited SaaS operation capabilities
Without understanding your SaaS landscape, your business may be more likely to fall into the following missteps when purchasing software:
1. Ignoring app redundancies
Without a comprehensive view of all SaaS investments made within your business, it becomes very challenging to keep track of any redundancies or under-utilized applications. This leads to wastage of resources as well as complications in your day-to-day operations when employees use multiple applications for the same type of task.
2. Fall into vendor lock-ins
Certain third-party SaaS vendors may have terms that prevent you from switching to other applications, potentially preventing you from using the best app to meet changing demands. This is especially likely if you do not have a clear understanding of your ongoing subscription terms and fall into vendor lock-ins.
Building a SaaS management strategy
There are a few components to an effective SaaS management strategy:
SaaS discovery is about fully understanding your current SaaS stack as a whole. This often involves collaboration from different departments which purchase different software.
While this is typically done by tracking subscriptions on a spreadsheet, this is an ineffective method as it requires continuous data input from several parties and leaves the process open to errors. Instead, a better SaaS management platform is needed which automates this process.
Building IT frameworks within the SaaS procurement process allows IT to flag potential data threats before the software is purchased. This is only achievable when IT is included in the process of procuring new applications and has comprehensive visibility for better access management.
SaaS application lifecycle
Understanding all SaaS application and subscription terms will help you strategize how to optimize your SaaS landscape for maximum effectiveness in your business. Renewal dates, lock-in policies, and pricing need to be fully understood to better plan for resources and spending.
How to choose the best SaaS management software
There are three key components to an effective SaaS management software:
Ease of use
- Enables automated tracking of SaaS purchases
- Is straightforward, with a user-friendly interface
Integration between business units
- Enables a comprehensive view of purchases for IT and management
- Provides a central repository documenting all SaaS purchases
- Is cost-effective with maximum results in bringing savings on SaaS spend
- Helps reduce SaaS costs through optimization
Security & compliance
- Provides visibility of SaaS subscriptions for management and IT
If you’re ready to get a better handle on your SaaS subscriptions, why not try Spenmo’s expense tracker? Avoid unnecessary payments and optimize your Saas usage today!