Unsanctioned SaaS purchases might make up a significant portion of your budget - or they might not. How’s that? Then-Secretary of Defense Donald Rumsfeld said it best during a news briefing on Iraq: “There are also unknown unknowns - the ones we don’t know we don’t know.”
What we do know is this: Studies from both Gartner and the Everest Group report that Shadow IT comprises between 30-50% of IT spending. SaaS purchases are bound to make up some portion of that number, given the proliferation of SaaS in the marketplace.
It might start rather innocently by empowering employees to try out any tools that would make them more efficient and effective at their jobs. And then it snowballs, as employees continue to make purchases with no oversight or approval. IT and procurement officers are left with no visibility, their only option to manually pick through ERP or expense software to identify SaaS spend.
Employees still need access to critical SaaS tools, and businesses need to know where their money is going in order to optimize spend. What can be done to address the growing problem of unsanctioned SaaS?
If you can relate to the scenario above, you’re not alone. There is a light at the end of the tunnel - but you have to do some serious work to bring unsanctioned SaaS purchases into your purview. Below is our recommended plan for getting - and maintaining - total SaaS purchase visibility.
Make it a safe space.
Before you take any action, think about how to frame the conversation with employees. This is not about wrist-slapping - it’s about gathering a centralized view of the company’s expenditures. Your goal is to make sure the employees get what they need in the most cost-effective way possible.
With that in mind, create a communication plan to share the new strategy. Write an email message (or even a few) introducing the new initiative, share a presentation at a regular company meeting, or even consider making a video explaining the problem and the solution in a fun way. Maybe throw in an incentive for the first group of people to come forward and report their purchases.
Offer an easy way to gather data on unsanctioned SaaS purchases.
Put some thought into how you ask for the information, and don’t ask employees to email it to you. What tools do you or your staff already use to gather information? An online survey tool, helpdesk ticketing system, or a workflow in your ERP could all be options. Look at the ones with the highest response rates.
Once you’ve decided on the format, make a short of list of data inputs. A few pieces of data like the person’s name and department, the SaaS tool they purchased, what they use it for, the type of license and cost, and the method of payment may be all you need to track down and categorize SaaS purchases.
Gather up the unsanctioned SaaS data and match it up to your records.
If you’ve done your homework and and are proactive about SaaS vendor management, you already have a list of your known SaaS vendors. Armed with the data on unsanctioned SaaS purchases, match it up to your existing list.
First, look for redundancies in SaaS platforms. These are situations where several different departments have separate contracts and licenses for the same platform. Identify areas where you could merge contracts for volume license discounts. These will likely be your biggest savings opportunities
Next, tackle situations where you have multiples of the same tool. Maybe you have 3 different client success teams, and they each use 3 different CRMs. Find out why they are using these 3 separate SaaS platforms - there might be differentiating features, or it could be a case of silo’ed SaaS purchasing.
For those that don’t fall into these two categories, add the SaaS platforms and their associated inputs to your list of SaaS providers, to improve your overall picture of SaaS spend.
Create a lightweight process to push SaaS requests through appropriate channels.
A recent McAfee study showed that almost 40% of participants reported using unsanctioned SaaS because “it allows me to bypass IT processes,” with another 18% reporting that IT constraints “make it difficult to do my job.”
Employees are tough customers, and you can’t guarantee any process will have 100% adoption. However, you can make the process easier and faster to encourage participation. You’ll need your thinking cap again to determine the most effective request processes already in the business. Limit the number of data inputs, make sure the information you are asking for is easy to capture, and consider how you might drive faster approvals by pushing it to managers and directors (instead of all the way to IT or Procurement).
Communicate the new request process to all stakeholders.
Once you’re finished with the initial push of gathering unsanctioned SaaS, let the company know what you were able to do with all that data. Share the approximate savings amount, tool consolidation, reduction in license redundancy - whatever you were able to accomplish with their help, let them know.
And while you’re telling them, make sure to mention the process you’ve launched for new SaaS requests. Explain how the process works, and share it in multiple company channels to get the word out. Consider an incentive like the one you used for the initial push. Publish the average turnaround time for requests, so employees know how fast you process them.
Stay on top of of governance.
Don’t let all the hard work you’ve done get stale by letting processes lapse. In order to keep your eye on SaaS spend, employees and managers have to comply. If all of a sudden the request process dries up, check with management to see how SaaS purchases are being made. Be willing to make changes to your process to encourage adoption. And set up quarterly audits to catch any outliers. Stay vigilant.
Unsanctioned SaaS is a persistent problem for businesses of all sizes. Tackling it is like climbing a mountain - just approach it one step at a time. With the right tools and processes, and an open mind, you can take steps to eliminate it and get a broader picture of your SaaS landscape.