6 Practical Tips to Reduce SaaS Costs
With the rise of SaaS (Software as a Service) adoption, businesses of all sizes are enjoying flexibility, scalability, and increased efficiency. However, this growth comes with a significant challenge: unnecessary costs associated with poorly managed or underutilized SaaS subscriptions. For IT professionals, controlling this environment is essential to ensuring that each SaaS investment delivers real business value.
In this article, we’ll explore practical strategies to reduce costs, avoid waste, and optimize the use of SaaS subscriptions in your business.
- Perform Regular Usage Audits
The first step to optimizing SaaS spending is understanding what is being used. Many software applications are purchased to solve temporary problems or by departments that end up not fully utilizing the service.
SaaS Management Tools: Use SaaS subscription management tools to actively monitor usage. MattZero provides visibility into which applications are in use and by whom, allowing you to identify unused or duplicate subscriptions.
Periodic audits: Conduct quarterly audits to identify underutilized subscriptions and cancel them or adjust your plans.
- Centralize SaaS Subscription Management
Often, different departments within a company purchase subscriptions in isolation, without coordination with the IT team. This leads to duplication of solutions or, in some cases, subscriptions to tools that offer redundant functionality.
Creating a centralized inventory: Centralizing SaaS subscription management allows you to control what was purchased, avoid duplicate purchases, and negotiate better contracts.
Catalog of approved applications: Establish a catalog of approved software that meets the needs of the company, preventing teams from purchasing solutions outside of IT control.
- Optimize Subscription Plans and Contracts
Many companies end up paying for features they don’t use or subscribing to larger packages than they need. Revising subscription plans based on actual usage is an efficient way to reduce costs.
Negotiation with suppliers: Negotiate with vendors to tailor plans to your company’s actual needs. SaaS vendors often offer discounts for annual subscriptions or for companies that centralize their purchasing.
Reduce unnecessary licenses: Evaluate the number of licenses purchased versus the licenses actually in use and consider reducing the number of inactive licenses.
- Automate Renewal Management
Automatic subscription renewal is a common pitfall. Services continue to be paid for even after their use is no longer necessary or obsolete. Automating the renewal process, with alerts before renewals, ensures that each subscription is carefully reviewed.
Automation tools: SaaS management tools can be configured to alert you when a renewal is approaching, allowing you enough time to evaluate whether or not to continue with the subscription.
Renewal Review Policy: Establish a policy that requires reviews of all SaaS renewals, ensuring that subscriptions are only renewed when absolutely necessary.
- Implement IT Governance and Policies
Unregulated SaaS growth can lead to financial chaos. To avoid waste, it is crucial to implement clear governance for SaaS management, including guidelines for purchasing, using, and retiring services.
SaaS Acquisition Policy: Develop a policy that requires approval from the IT or purchasing team before any new subscription, ensuring that all solutions are aligned with the company's IT strategy.
Team training: Educate your employees on the importance of using SaaS responsibly and how they can help the company avoid unnecessary costs.
- Tool Consolidation and Integration
In many companies, there is an overlap of SaaS solutions that perform similar functions. Consolidating these tools can help reduce costs and simplify management.
Identification of redundancies: Analyze existing SaaS solutions and identify tools with similar functionality that can be consolidated into a single, more comprehensive solution.
Platform integration: Use SaaS platforms that offer integration with other solutions already in use, facilitating the workflow and increasing the value delivered.
The exponential growth of SaaS has brought undeniable benefits, but it has also created new challenges in cost management. For IT professionals, it is essential to ensure that SaaS subscriptions are well managed and bring tangible value to the company. In order to help you manage SaaS in your company, MattZero invites you to a conversation. To schedule an appointment with one of our experts, just click here link.
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