Duplicate Apps Are Costing You
Mergermarket’s 2016 Global M&A Report counts 17,369 deals were sealed last year, 4,951 of them in the U.S. alone. These mergers and acquisitions span virtually every industry, with borders of no consequence. With every M&A comes a host of challenges.
Integrating systems ranks at the top of the list. Each company has its own systems and applications, creating a tug-of-war of which ones are best to keep. SaaS applications are no different. Each separate company has their favorite SaaS apps. When two companies are combined, duplication is sure to follow.
In order to get control over the SaaS landscape and SaaS spend, companies must follow a protocol to avoid duplication. Duplication means wasted costs and increased risk. With all of the many concerns and to-dos that come with a merger or acquisition, it’s easy to fall into the mindset of, “I’ll get to that later.” At first glance, consolidating SaaS apps seems like the last thing an IT department would need to tackle. This would be a costly mistake
Gartner says cloud spending represents up to 24 percent of the entire IT budget and 30 percent of software license costs are wasted on insufficient management, such as allowing duplicate applications to infiltrate the environment. Duplication, or redundant apps, make up a significant portion of the waste.
How does a newly merged company begin to get control? First and foremost, you need visibility. You can’t manage or control what you can’t see. You must invest in the right technology to ensure you have complete and total transparency across the every division, department, and team, down to the individual employees who use the apps.
Even if your originating company had perfect management of its SaaS platform, the merger changed everything. You are essentially starting from scratch. There will most definitely be redundancy, along with underutilized apps, underutilized licenses and underutilized features.
Where to begin? We offer up four key questions to ask yourself:
1. Which SaaS apps will be used for each purpose?
Every department and perhaps, every team, may want to use their own SaaS app for similar purposes. Alternatively, there will be plenty of corporate SaaS apps that will be standard across the enterprise. Who is using what, and why? You want to avoid different apps being used for the same purpose as much as possible. Why pay for three project collaboration apps when the company would likely agree on one?
Determining which SaaS apps have been authorized is essential. These apps will be managed by IT and under IT’s supervision. Be sure not to miss the shadow IT, a.k.a. phantom IT. It is rare for any company, large or small, not to have shadow IT lurking somewhere. An M&A gives IT a perfect opportunity to nip shadow IT in the bud.
2. How many licenses are there?
You will need to review contracts and the number of licenses purchased. Be sure the number of licenses purchased align with the new number of users. In the case of a merger, it is likely that the contract will either need to be renegotiated or expanded to include new users. Before you get to that point, however, carefully analyze license usage. Frequently, there are unused licenses that can be extended to new users.
This may sound cut and dry, but there is another level to consider. Even when it appears there are no more licenses to go around, look a little deeper. Is every license being fully utilized or can any be reallocated to someone who would use it to its potential? See my next point.
3. Are all of the licenses being fully utilized?
Once you know the number of licenses, it’s time to consider whether or not every license is being fully utilized. Some companies rely on single sign on to see which SaaS apps are being logged into, but this doesn’t tell the whole story.
If employees are considered “users” simply because they are automatically logged into an app when they sign in for the day, IT doesn’t really get a good picture of whether or not that employee is actually using the app. Logins don’t always equal utilization.
You need visibility and data to see which users are actually using the app. How long are they in the app and what are they doing while they are there? Is there real activity? Which features are they using? Information like this will help IT determine if an app is being fully utilized - per user. All of those apps that aren’t can either have their licenses reallocated or the apps may be eliminated completely from the platform. Either way, the company is going to save money.
How to Keep Track of It All
The best way to track all of this data is to create a SaaS catalog that would help manage redundant technology. You can piggyback off of your IT hardware tracking database. Think of every descriptor, such as vendor name, product name, version, license count, license type, names of users and their department. Then you’re going to want to know login dates, duration and usage for each employee. It may appear to be a bit overboard, but this is where some companies drop the ball.
Understanding who is using what is critical. If a user, who the company has purchased a license for, is no longer or rarely using the SaaS app, that’s a wasted license that costs the company money to maintain. Multiply this across the entire employee base and you can see where Gartner gets its staggering numbers.
A SaaS catalog must be in real time. A merger is chaotic with plenty of changes. A spreadsheet is grossly insufficient and unmanageable. It simply cannot give you the visibility you need to eliminate redundant SaaS apps and manage them effectively. The more you automate SaaS management, the greater the transparency.
An automated system will make your catalog simple, flagging potential threats as well as opportunities. Say, for instance, there is a SaaS app that was being used in the past but hasn’t had activity in months. An automated system will flag this app to bring it to your attention. You can then view who was the last person to use it and how it was used. You can also scan the catalog to see if there was a similar app brought onto the platform that took its place. Retiring unused apps is a great way to lower costs and keep the platform streamlined.
As you work through all of the side effects of a merger, be sure to keep your eyes on redundancy. With the right technology, you can spot duplicate apps a mile away and make the proper adjustments to keep your platform lean.