How to eliminate the top 5 SaaS management mistakes that are costing you money

Post by
Maggie Ryan
How to eliminate the top 5 SaaS management mistakes that are costing you money

If you’re a fellow SaaS enthusiast, try counting the number of applications that you use on a daily basis. If that was too simple, try to identify which features you use religiously, and which you haven’t touched in months - for each product. Naturally, the more you have in your SaaS inventory, the harder it becomes. 

Now imagine doing this for everyone on your team, and you will start to understand the pain that managers deal with when accounting for all of the different tools, licenses, and subscriptions that an organization is using.

Hundreds of thousands of dollars are wasted every year on dormant subscriptions, unused features, and duplicate licenses, so we’re going to break down the five most important steps you can take to eliminate mindless spending.

SaaS Spend Management and SaaS Sprawl

According to a Gartner research report, more than 30% of SaaS fees paid by organizations are wasted on features, subscriptions, and licenses that are not being used to their full potential. In other words, nearly a third of the average company’s SaaS spend could be allocated towards more productive business activities. 

Especially for teams that are composed of multiple departments or sprawled across different countries and time zones, SaaS management becomes a daunting task that can be seemingly impossible to gauge. Add multiple tools into your SaaS inventory, and you will soon find yourself in the midst of a SaaS sprawl which occurs when administrators lose track of the number of third-party integrations that are being used on a certain network.

If you are looking to reduce your SaaS spend, here are five things to keep in mind…

1. Centralize your SaaS spending

While accounting for SaaS inventory used to be as simple as a spreadsheet overseen by the IT department, fast growing teams and remote work trends have drastically shifted the landscape in terms of onboarding and off-boarding for SaaS tools.

Being out of the office, employees have more leverage to experiment on their own terms and add tools to their stack without necessarily going through the administrative approval process. Furthermore, individual teams require different tool stacks to carry out their day to day operations, making it difficult for departments to coordinate on registration and cancellation processes, especially in large companies.

Think of how many times you’ve tried a tool but then realized it didn’t suit your needs or there was a better alternative available. Many people tend to hold on to a subscription that doesn’t fulfill their needs while searching for one that does or simply forget to go back and cancel the previous one after making a switch. When these changes go undocumented, a SaaS sprawl is dangerously inevitable.

SaaS management is a multifaceted responsibility and we highly recommend automating the SaaS procurement process with a tool like Sastrify if you’re working with a diverse tool stack.

More specifically, Sastrify can manage all of your SaaS subscriptions, negotiate contracts with vendors to get you the best subscription and pricing plan possible, and give you recommendations about what licenses should be added or dropped. If you’re on the administrative side of portfolio management or finances, you can thank us later.

2. Cancel abandoned licenses and duplicate subscriptions

If we had a dollar for every time we tried a new tool, forgot about the subscription, and sat on the phone with customer service for hours in a desperate attempt to get a refund, we might actually have enough money to pay for that subscription. All jokes aside, abandoned licenses and duplicate subscriptions are two of the biggest money eaters when it comes to SaaS costs. 

The first one is pretty self explanatory. If someone leaves the company, shifts roles or teams, or no longer has the need for a tool that was unique to a specific project, their license should be terminated immediately or at least put on hold for the time being. 

It’s easy to forget about subscriptions, especially if you’re not the one paying, so it’s critical to have a centralized system in place to oversee the onboarding and off-boarding processes for SaaS tools and avoid paying monthly or yearly for a license that is not being used.

The second one is not so obvious, but often gets overlooked. Sometimes, tools have features that parallel one another meaning that you could be paying for two tools that are fundamentally different, but have elements that overlap. In this case, we advise you to do some research to find out if there is an even better tool that integrates all of the features from the two tools in question to avoid paying for duplicates.

Take Leadjet for example. Before Leadjet, users were forced to conduct research manually, then copy and paste data from LinkedIn to update a CRM contact. Now, Leadjet users can prospect on LinkedIn and enrich leads, update expired contacts, and edit custom fields and deal statuses without ever having to leave the platform thanks to the tool’s two-way data synchronization. 

There are a myriad of tools that offer one or two of these features, but with Leadjet’s all-in-one design, users only have to manage (and pay for) a single subscription.

3. Don’t be afraid to downgrade (or upgrade) your subscription tier

Wouldn’t it be nice if we could hand select the features that we use and build our own subscription plan for many of the SaaS tools out there? Too often, lower level tiers are lacking in features that could further your success while upper level tiers are loaded with features that the average person doesn’t need. Both of these scenarios result in money lost, whether it be investing in a low tier plan that restricts your capabilities or investing in a high tier plan that is not being used to its fullest potential.

Keep in mind that SaaS procurement should be a fluid process. Not everyone in the same team or department will have the same needs depending on their mission, so it is important to ask for feedback from individual users to determine if it is necessary to downgrade or upgrade. 

By taking the time to assess each user’s needs and investing in the correct subscription tier that corresponds, you will maximize both productivity and ROI.

4. Identify hidden costs

Whether it’s automatic renewals or “freemiums,” many SaaS providers will go out of their way to get that extra dollar in their pocket. Although these practices may appear to be deceiving, it’s up to consumers to stay on top of their subscription plans and act accordingly if something is expected to change. 

Remember that “hidden” costs are not always hidden or deceptive. For example, you might be paying month by month while you could be saving a large percentage of the annual cost by committing to a yearly subscription. On the other hand, you might invest in a yearly subscription and then soon discover that the tool is no longer necessary. 

With that being said, make sure you know the terms and conditions of any subscription plan before typing in your credit card credentials to ensure that you won’t be paying more than you should be before it’s too late.

5. Consider buying in bulk to leverage your negotiating power

Did you know that you can significantly reduce the cost of your SaaS spend through negotiation? If you’re only purchasing one or two licenses, you may be out of luck but if you’re purchasing upwards of 10 or 20 licenses, there’s a high chance that the provider will be willing to provide you with a discount.

After all, it’s basic equilibrium.

Source: Sastrify

Purchasing in bulk is a viable option for large teams that are all using the same subscription tier, but refer back to pointer number 3 to remember that SaaS procurement is not always a “one size fits all” decision making process. 

While you may be inclined to purchase a large quantity of licenses to save money, it’s still important to take each user's individual needs into account, because you might be better off buying high and low tier licenses individually, than high tier licenses in bulk. It all depends on your team, your mission, and your budget.

Bottom Line

SaaS management is by no means an easy task, but following these 5 pointers will be sure to put you on the right track. 

As long as you use a data driven method to monitor your activity and identify opportunities to cut back or invest, the results will pay off over time when you see how much money you’ve saved and how much more efficient your workflow is when you’re using the right tools. Choosing the correct plan and monitoring the ROI from every license in your portfolio might seem overwhelming, but luckily there are resources like Sastrify to take the guesswork out. 

Good luck!

If you would like Sastrify’s team of SaaS experts to assist you with your decision making process or subscription management, you can get in touch with a representative at hello@sastrify.com or visit https://www.sastrify.com/.

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