Reliable SaaS license management - why and how


Michael Fornander


September 15, 2023

Each year more and more SaaS tools are being launched on the market, aimed at saving the time, efforts, money, etc of organizations. But, as those tools get easier to acquire, including by employees, it’s getting hardly possible to keep track of them or the value they bring.

If we only look at the SaaS tools available in the sphere of marketing, between 2014 and 2020 those tools have grown with more than 7,000! Indeed, it is common for marketing departments to utilize numerous digital technologies in their job, but the trend is similar for other departments as well. 

No organization would want to cut down on digital technologies usage, if they truly contribute to increasing work efficiency. That is the reason why organizations are, instead, turning to SaaS license management - a process that helps them to identify and optimize their SaaS expenses. But how to establish a solid and reliable SaaS license management process? Check out the steps we have suggested below.

Step 1: Realize and admit that SaaS license management is an issue for the organization

The first step towards finding the best solution for SaaS license management is making clear that you have a problem and figuring out the size of it. Start by asking questions like:

  • What SaaS products our company is actually paying for
  • Are employees using tools that the organization is not aware of?
  • Are employees taking advantage of all functionalities and benefits available to them via the SaaS tools? Is there functionality overlap between the different tools?
  • What is the total amount of SaaS license spend? Who is paying for those licenses?

Once you take the time to get a response to the above questions, they will give you visibility on the growth of your SaaS, on what part of it goes fully uncontrolled, in terms of both costs and risks. You will also get a good picture of the extent to which there is inefficient license purchasing and lack of forecast and management on the SaaS expenditure.

Step 2: Set up a SaaS License Management Strategy

With an efficient SaaS license management strategy in place, any organization can get visibility into cloud-based SaaS license usage and spend. It can then start to effectively manage the license renewals and usage, as well as new SaaS purchases. When you take the time to establish SaaS management in your own organization, you will be able to control and manage the risk and costs, while still encouraging the usage of technology in a workspace that’s becoming more and more distributed.

Define the goals for setting up SaaS license management

If you are not sure how to start setting up a SaaS management strategy, responding to a few questions regarding the goals you pursue via this strategy would really help.

A few examples of goals and questions would be:

Goal: Increasing employee productivity
Question: Are the tools we are using the most appropriate and quality ones?

: Reducing costs
Question: What is the total expenditure for SaaS tools? Do we need all seats purchased for the same software?

: Increasing SaaS ROI
Question: Are we using the full set of functionalities offered by the SaaS we are paying for?

Goal: Controlling risk and staying compliant
Question: Have we verified that all SaaS tools are secure and compliant?

Goal: Digitalizing the workspace
Question: Are these tools supporting us on the road to digital transformation?

Once you have clearly defined your goals, you are ready to continue with the 4 steps required for an efficient SaaS management:

2.1 Discover all SaaS tools your organization is currently using. Figure out which employees are using them, how they interact with them and how much is spent for each.

2.2 Optimize the spend by filtering out unused tools and increasing efficiency.

2.3 Plan your future renewals and forecast projected SaaS spend.

2.4 Control the SaaS management process across the organization, so all SaaS spend can be efficiently managed in the future as well.

SaaS Discovery

The goal of this first and very critical stage is to detect the current tools used across your teams and departments. You need to ensure you get the full list of SaaS tools used, so you can get the understanding you need to proceed further.

SaaS license management begins with discovering all apps used by the organization
Companies underestimate the apps they use by two or three times, with the average number of apps being 651!

You need to get a response to questions like: How many SaaS tools are used across the organization? What are the available options to buy such tools? Does purchasing SaaS tools require approval and by whom? What is the cost for each tool used? Where can we see those costs reflected? Is there functionality overlap between the different cloud software we are using?

Optimize the Usage and Spend

If your organization is a big one, you might be faced with a huge list of tools you need to go through. Rank the list items by total spend and start optimizing from the top 10 on this list - your cost optimization opportunities might be the highest for those tools. Split the process in several steps:

Eliminate unused licenses

  • Figure out whether all licenses are being used
  • Track licenses obtained for former employees
  • Find out if upgraded packages are still needed and used

After completing the above, make sure that all unneeded or unused licenses are terminated or redistributed and downgrade those for which an upgraded functionality is not needed or used.

Detect duplicate subscriptions

With a big organization, it is very likely that more than one employee signed up for the same cloud tool. Make sure you identify duplicate subscriptions and evaluate whether an enterprise license would provide a more efficient license cost per user.

Identify applications with overlapping functionalities

Applications for web conferencing, project management, analytics, team collaboration, file storage and sharing are among those that are very likely to share the similar functionality. Review those applications, identify the features used in them and choose to stay with the solution(s) that provides the full set of most used functionalities.

Plan your renewals

Now that you have the full picture of the contract details, cost, seats purchased and renewal date for each SaaS tool, you can schedule a review of the tool usage well in advance of its renewal date. Book a slot in your calendar and make sure to carefully examine the ROI of each tool that is about to be renewed. With most tools being renewed on a monthly basis, have in mind that you may end up with several and more renewals to review each day, depending on the size of your organization.

Most organization have to process multiple renewals every business day

Establish a process for software procurement control

By setting up an organization-wide process for software procurement and ensuring everyone is familiar with it and is following it, you can ensure that your SaaS management efforts do not go wasted. In this process, you can define:

  • SaaS subscriptions that are widely used in the organization and need to be fully managed by IT
  • SaaS tools that only require to be supported by IT, but not managed by them
  • Tools that IT does not need to manage or support, but the purchasing for which should still go through an approval process

This process can be customized depending on the flexibility needs of the organization, but must be in place so SaaS management can continue in the long run.

How can Viio help with executing the above SaaS management steps? Find out in a personalized demo!

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Michael Fornander

Chief Executive Officer

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