12 Steps to Deep and Worry-Free SaaS Savings, Smart Vendor and Contract Management
By Doug Barney
COVID-19, or Coronavirus, has already plunged us into a worldwide recession. Enterprises are not just , but cutting costs in order to survive the pandemic, and reemerge on solid economic footing.
That means any and all areas of IT waste be must addressed and eliminated – NOW!
Here are 12 steps to recovering from your SaaS spend problem, saving 30% in the process.
1. Admitted We Were Powerless Over SaaS, That Costs Had Become Unmanageable
According to Gartner, Shadow IT represents 30-40% of IT spending in large enterprises. Even more shocking, the Everest Group argues that spending on technology that is outside IT budgets and control is half or more of total spend on IT.
Cisco research finds the average large enterprise uses over 1,200 cloud services and 98 percent (1,176) of them are in essence Shadow IT. Many of these Shadow apps are a waste of money since there are already corporate standard apps that handle these functions, and in too many cases the Shadow tools are either malicious or present other security vulnerabilities.
Finally, a Logicalis CIO survey found that 90 percent of CIOs are simply bypassed by line-of-business managers in IT purchasing decisions some of the time, and 31 percent of CIOs are bypassed on a routine basis.
Simply put, Shadow IT wastes vast amounts of money.
2. Came To Believe That A Power Greater Than Ourselves Could Restore SaaS Spending Sanity
While Gartner research found that Shadow IT is 30-40% of total IT spend, there is an answer. addresses a broad spectrum of SaaS applications — 40,000-plus, and discovers both approved and Shadow SaaS apps, and tracks usage, costs, renewal schedules, and security and compliance status. Alpin drives deep license and subscription savings, with a typical reduction of 30%.
With Alpin, you can also:
- Reduce costs – optimize license costs (unused and underutilized licenses, and redundant applications).
- Avoid penalties – comply with license requirements, which exist even for cloud apps.
- Avoid surprises – be alerted to all upcoming renewals.
- Negotiate smarter – leverage app usage details to gain an advantage in renewal discussions.
3. Made A Decision To Turn Our SaaS Billing Lives Over To The Care Of A SaaS Management Platform () Solution
Alpin’s vendor product lists show what the vendor offers versus what your company actually uses. And it shows all the licenses you have for specific SaaS solutions. In the vendor list, each vendor has data items underneath billing accounts, including:
- Bills and payments
- List of products, including products the vendor offers, and the list of products the customer itself uses
- For each product, there is a set of licenses
- Documents that could be also linked to billing accounts
- Data breaches and certification information
Let us see how this all works. “Take Google as an example. In this case, there are multiple billing accounts. The billing account shows what you are buying from Google, for instance G Suite. In the case of Microsoft, we could show you are buying Office 365, but also have a bill for Asia for Microsoft Dynamics. You can also see bills for on-premises licenses,” said Julian Denaes, CoreView president and co-founder of Alpin.
This becomes a master vendor list for all software. “Every time you have a new thing, you can add a billing account, which could be based on the contract itself. People sometimes use billing accounts as contracts that they have with this vendor. There are multiple ways of using billing accounts,” Denaes said.
You can have a default billing account, so every time you create a bill, document or payment, it will be automatically assigned to the right billing account. Bills and payments also includes related products, which may have related accounts.
Vendor lists are key to , but they are far more than just lists. Instead, they contain all relevant and related vendor data. “With the vendors, you have multiple data points — the different billing accounts, the different bills, and as well as payments you have for one specific vendor,” Julien Denaes, vice president, Alpin, said.
Alpin billing and accounts views are about making sure that you can manage your different cost centers, billing accounts, and contracts you have with a specific vendor.
Billing data is updated either manually, or by integrating with expense systems in order to retrieve bills every month, and simply assigning that to a vendor.
4. Made A Searching And Fearless Inventory Of Our SaaS Products
Managing SaaS and optimizing spend – meaning reducing spend – requires finding all SaaS apps, especially Shadow IT, and then overseeing vendor relationships through data gathering and analysis. With SaaS vendors popping up every week, in every department, in every location, there is no way to manually keep on top of it all – even if you have discovered all the SaaS and Shadow IT solutions.
Many turn to spreadsheets, and have one gigantic work sheet full of vendor information, that is hard or even impossible to manage.
Whether you are still using a spreadsheet and experiencing classic spreadsheet growing pains, or just now developing a vendor management process, . With Alpin, you can get a consolidated list of all of your SaaS vendors. Moreover, for each one, you can store or link to important documents, view contracts and financial records, see product usage statistics, identify compliance with regulations and certifications, and more.
5. Admitted The Exact Nature Of Our SaaS Billing Wrongs
Tracking bills is critical to identifying savings, and paying on time – staying in license and contractual compliance. With Alpin, bills and payments are retrieved automatically from Expensify, Concur, NetSuite and so on. You can also upload them. You can even combine payments, and pay two bills or five bills at the same time in one payment.
Understanding costs and allocations is critical. SaaS products might start with a centralized IT purchase. More likely, a small team or a single person starts the process, and soon, the product is adopted by people in other areas. It might even be free until it gets big enough. Where is the billing? What system is it in? Are there multiple subscriptions for the same product? Alpin consolidates info from all your systems, and it knows who is using each product. So you can see costs by product, department, team, individual, geography, and more.
6. Were Entirely Ready To Have A SaaS Management Solution Remove Our License Renewal Defects
Information is power in negotiations, especially license renewals. And you get that information through Alpin. Imagine a scenario where you ask a vendor for a renewal negotiation meeting before they do. Moreover, you know just as much or more than they do about usage, users, and more. That puts you in a position of power for negotiations with the vendor.
Significant cost savings come from identifying unassigned or inactive licenses and reducing these costs through carefully curated license management, license redeployment, re-harvesting, and the re-assignment of inactive licenses.
This license analysis is a critical basis of any renewal negotiation. “Heading to negotiations with the right information is a key factor in the success of any negotiation. Having current licenses, hardware, and software information gathered in advance, and having it organized in an accessible way is a critical step,” said Emerset Consulting Group. “When you show up to the negotiation table, having this information meticulously organized in advance helps you know where you want to go with future technology and licensing, and puts you in the leadership role.”
Experts agree that a detailed analysis of licensing needs should be part of the renewal negotiation process. “To minimize TCO and maximize usage rights, companies need to take preparatory steps in the months leading up to every purchase or renewal,” explains NPI in its bulletin. “When purchasing or renewing, there are a variety of important choices to be made that have a major impact on cost. In some cases, customers know about them – and are confused. In other cases, customers are not even aware of their options. Striking the right balance of cost and flexibility requires full understanding of the options, license scenario cost modeling and license scenario cost/benefit analysis.”
Rick Gibbons, a licensing analyst for the ITAM Review, agrees that licensing is not always understood by those that pay those bills. “The cloud has made it more difficult to be under-licensed, but the issue people are looking at is over-licensing,” Gibbons told Computer Weekly.
Understanding the need for billing and actual usage data is one thing. Achieving it is another. There are hundreds or thousands of payment and contract renewal dates to manage, and apps are renewing unnoticed. This leads to unexpected renewals, and unexpected costs.
Licenses and renewals are easy to track and manage – at least with Alpin. In fact, all the licenses and renewals are on one screen. A customer can look at the renewal calendar, for example, and see there are six contracts renewing in March.
Mastering renewals means you will get no billing surprises. As subscriptions rise into the hundreds and then thousands, payment and renewal dates get crazy to manage. Unneeded subscriptions are renewed, while important subscriptions are missed. Moreover, you do not have the data to negotiate better pricing. Solve all these problems with Alpin’s interactive renewal calendar that alerts you to upcoming events, and gives you the info to power your negotiations.
This way, you track all subscription renewals in an interactive renewal calendar – with the one renewal management calendar you need.
Alpin shows exactly how much money your SaaS contracts represent, which is great for budget forecasting. It is a good exercise for finance and IT to make sure they have their act together. If it is a large amount, from a cash flow point of view, it is best to make sure the large payments are scheduled and forecasted.
The payments dashboard is extremely customizable for us, taking less than 20 minutes to fully customize. You can see all payments across all vendors. This is critical for chargebacks.
7. Humbly Asked If Our SaaS Vendors Are Certified And Safe
Knowing the compliance state of your SaaS providers is critical to your own compliance. Compliance certifications are tracked by Alpin, and can include, for example, the latest GDPR statement from Google. The user can just click there, and go to their GDPR statement. This certification works for all vendors discovered by Alpin, which is over 40,000. Alpin links to the latest certifications information from all your managed vendors.
The breaches and certification area consolidates all the data Alpin automatically finds online about specific vendors, and bills and payments.
8. Made A List Of All Licenses, And Became Willing To Stay Contractually Compliant
Ensuring license compliance is key to warding off fines. Some employees use freemium apps that are actually on corporate plans, or they share logins, or otherwise violate license terms, risking fines. Use Alpin to find users in situations that would trigger fines. Alternatively, explain why the company had to go through an audit and pay fines because you did not use an automated tool to identify penalty risk.
Besides insuring contractual compliance, Alpin’s cost optimization features find unused licenses and determines which users could use lower-tier licenses at reduced cost. Moreover, Alpin tracks renewals, payments, and billing – all in one dashboard.
9. Made Direct Amends To Finance, Pledge To Track All SaaS Vendor Data And Documents
Alpin works best when it has access to data. Data comes from two main sources. It can be invoices, contracts, and manually gathered information. This data can be manually uploaded, using the ‘import data’ call to action. Alpin also imports data from a CSV, or software such as SAP and Expensify – among myriad others. You can export data to Alpin from just about anything, and do so with a simple drag and drop. Alpin takes care of processing the data, making sense of the data, and reporting it back.
All this data captures exactly what the organization is spending for SaaS, as well as the status and details of renewals. This way, customers get their arms around SaaS economics and have detailed ways of saving on SaaS such as cancelling multiple subscriptions when you do not need. All this data points to what is licensed, what is paid for, and so on.
Once set up, Alpin knows what you have, and can house your renewals, payments, owners, contracts, and other information. Think of it as one pre-populated SaaS system of record.
10. Continued To Take Personal Inventory Of Our Compliance, And Promptly Correct Wrongs
Compliance is a two-pronged issue. First is ensuring that end users and your IT environment is compliant with corporate and IT policies. The other issue is compliance in the more formal sense with regulations such as HIPAA and GDPR. Alpin applies its compliance solution to thousands of SaaS tools, insuring adherence to GDPR and other regulations.
With Alpin, you can:
- Identify and prioritize vendors that process personal data that you control.
- Contact those vendors to request information on their compliance status. Reach out directly or view the owner of that vendor relationship and ask them to handle it for you.
- Provide reports that demonstrate due diligence and highlight stats around GDPR-ready vendors. Alpin already lists your cloud application vendors and links to each company’s public statements on GDPR. Contact those vendors to request information on their compliance status.
- Provide reports that demonstrate due diligence and highlight stats around GDPR-ready vendors.
- Tag and report on vendors that have passed your audits. Analyze spend, user stats, and more around compliant, non-compliant, and exempt vendors.
11. Sought To Improve Our Conscious Contact With Vendors Through SaaS-Related Documents
Key SaaS-related documents can all be held by Alpin, such as NDAs, renewal agreements, cancellations, or discount agreements. Alpin holds all the documents customers do not want to lose, or want to share between IT, procurement, security, and the finance department. Instead of having those documents living in employee mailboxes or paper files, the customer can upload them to Alpin.
In fact, these documents can be stored wherever the customer prefers. Besides uploading the documents to Alpin, customers can keep them in SharePoint, OneDrive or other data storage system. Here Alpin will store links to the documents held elsewhere. “We help companies manage contracts by offering them document storage, or link to storage library, where they can really tag documents,” Denaes said.
IT, or even the finance or procurement departments, have the freedom to store what they like. “Documents include any kinds of documents you are exchanging with the vendor that you would like to make sure you store because they are important for the business. These documents could be basically anything. You can have an agreement, a draft, bill, statement, security assessment, renewal agreement, discount agreement, or SLA. Once you store the document, you can type a description,” Denaes said.
12. Having Had A SaaS Awakening, Carried The Message By Asking Others Key Shadow IT Questions
- Do you have a detailed and comprehensive list of applications your end users use? What categories do these apps comprise (e.g., collaboration, file storage, CRM, chat, or project management)?
- Which applications are used the most? Does this speak to an unmet need that should be addressed through adoption and standardization? In contrast, which SaaS tools are redundant, wasting money and causing inefficiencies?
- Which Shadow IT apps harbor the potential to hold confidential, regulated, sensitive, or proprietary data? Does your IT staff have visibility into how this data is created, transferred, and stored?
- Does your IT group currently have the ability to identify SaaS applications, and create and implement effective SaaS usage policies?
- Do you have security controls to protect SaaS applications from data breaches?
Pay For Just What You Use – Real-World Examples
License compliance and cost overruns: Having duplicate apps is the definition of SaaS waste. At one company, many teams had their own Slack domains, and they were all unaware that a corporate Slack account existed.
Costs overlapped and added up: Similarly, another organization found not one, but five duplicate project management apps, spread throughout the company. This created massive cost overlap and security vulnerabilities (we do not know how much sensitive data may have been stored in the other apps).
Solution: Alpin’s extensive discovery tools identified these hidden instances, giving administrators the data and contact information needed to remedy the issues.
Ex-Employee Cost Problem: A large technology company’s ex-employees – up to three years gone – had access to multiple cloud apps, including the company’s CRM. Not only was this a waste of money, it put years of potentially sensitive information at risk.
Solution: Alpin discovered these unneeded licenses so they could be cancelled.
Save Money, 30% Average SaaS Savings With Alpin
Alpin shows you what you are spending on SaaS, and helps you optimize and cut costs.
CIOs predict that cloud services will comprise 44% of total IT spend in the next few years – not including SaaS expensed by individuals or departments.
What if you could see an accurate view of all SaaS spending and cut it by nearly a third?
Alpin has cut costs enough to pay for itself many times over and help you by:
- Consolidating and notifying you of subscription renewals.
- Keeping you in compliance with license terms.
- Centralizing SaaS vendor management.
- Obtaining accurate insights into SaaS spending or costs by department, team, or employee.
If you are not feeling the pain of wasted spend on SaaS, you soon will. You can find cost savings in excess licenses, inactive users, mismatched license types, redundant apps, duplicate subscriptions, unconsolidated contracts, spotty renewal handling, etc. Alpin shows you the money, and pays for itself many times over in the process.
CoreView Bought Alpin To Solve Shadow IT Problem
Last year, for its broad SaaS management and discovery ability. Alpin tracks more than 40,000 SaaS apps, using 13 discovery methods, giving IT a full picture of their SaaS environment. With Alpin discovery, you will:
- Gain visibility – view all SaaS applications in one dashboard, along with all their users.
- Work with the business – help business users choose the best solutions and use those apps to their full potential.
- Spot trends – see app growth among teams, departments, geographies and across the company.
With the acquisition, CoreView now offers granular user-specific and application-specific controls that identify all SaaS applications in use, monitor activity, and offer additional features such as “Blacklisting” (blocking admin-selected SaaS applications from use), “Lockdown” (blacklisting every existing and/or new SaaS application in emergency situations), highlighting file and email data leakage, showing vendor security certifications, and more.
Learn More About The New SaaS Management Powerhouse:
Explore the Alpin solution —Alpin Co-Founder’s Magical Mystery SaaS Management Tour.
Dive into our white paper — 1+1=3: CoreView and Alpin are the New SaaS Management Platform (SMP) Powerhouse.
Doug Barney was the founding editor of Redmond Magazine, Redmond Channel Partner, Redmond Developer News and Virtualization Review. Doug also served as Executive Editor of Network World, Editor in Chief of AmigaWorld, and Editor in Chief of Network Computing.