Software stacks have helped different companies navigate uncertain times: from collating healthcare data to managing distribution channels, SaaS tools have found a place in every business niche. Perhaps, one of the greatest values contributed by technology in the last 100 years is the dramatic increase in operational efficiency, people management, and resource allocation. All over the world, companies have leveraged these advantages but not without a considerable cost: acquiring expensive Software-as-a-Service (SaaS) infrastructures. 

The SaaS business has revolutionized businesses since its inception in the late 90s. Instead of buying software outright, these service options present subscription access for installed software or a web version. Wide adoption of SaaS tools is made possible by the convenient features it offers: a flexible payment option, ease of workflow collaboration, scalability, update consistency, and accessibility. Today, you could rightly say that the most successful strategy implementations globally run on an abundance of SaaS tools. 

SaaS Adoption: What the Data Says Vs Companies Experiences 

The most popular SaaS software in the market today include Atlassian, Zoom, Google Workspace, Slack, Hubspot, and Mailchimp. With an estimated worth of $225 billion by 2025 in the United States alone, the global SaaS industry is booming; moving at a pace of almost one product every minute.

This industry is covering every corner from a search tool to tech to health industry including mental health and general wellbeing as well. Optimizing the cost-to-operational-efficiency ratio is a hard nut to crack for companies that have since adopted some SaaS products. Adopting more of these products to run processes smoothly comes with an associated cost. To reduce these costs, companies don’t simply stop running these products. Optimization in this regard depends on the state of the company, and its immediate needs. 

Downscaling companies, for instance, focus on reducing operational costs to remain solvent until the next seed round. In rapidly upscaling companies where operations demand multiple tools, operational cost is increased at the expense of running costs. The largest unnecessary costs to cut are often hidden in the software stack. 

The Challenges of SaaS Deployment 

One thing easily stands out if you look around: the SaaS challenges many companies face are almost the same in perspective. Software redundancy takes the lead. On average, the number of SaaS applications used by companies rose from 80 in 2020 to 130 in 2022. Today, this number stands at about 371: that’s a SaaS tool for almost every operational process from customer onboarding, to accounting and branding. As new tools become available on the market, teams may likely try out more and more software — creating a web of tools that heavily contribute to redundancy over time.  

Collaboration apps like Slack, Monda, and Confluence; and Project management apps like Asana and Smartsheet are not exactly expensive, so subscribing to them is an easy decision. However, small subscription charges accumulate to thousands of dollars in unnecessary spending. Sometimes, there is an overlap, with many tools serving the same purpose. Since most SaaS work on a subscription basis, the contributory cost of SaaS maintenance to the overall running cost can be enormous. 

Tool redundancy wrecks more havoc than just increasing the running cost burden: it also wastes limited resources; limits the efficiency of process optimization strategies; creates information silos; results in inconsistent processes. Engaging multiple SaaS platforms also exposes companies to data exposure risks. The decentralized nature of a SaaS sprawl undermines the importance of sensitive data management. Different teams may use SaaS tools outside the company’s IT purview to manage user access, data encryption, and compliance. Multiple use cases like these expose sensitive data to vulnerabilities. 

In the face of multiple SaaS use cases, productivity levels plunge. Since multiple overlaps coexist in these systems, cross-team collaborations become difficult. It becomes harder for teams to work seamlessly across projects, communicate on deliverables, and develop a centralized access point for important information. The result is easily predictable: productivity drops and the company loses money. 

Strategies for Solving Saas Operation Challenges

Agile Prioritization of Mission-Critical Software

Reducing SaaS costs without disrupting operations is a critical strategy for staying afloat in a competitive global market. Your best bet is to adopt an agile methodology for tool prioritization. The concept of mission-critical software posits that teams prioritize tools in order of importance to operational efficiency. Tools described as ‘mission-critical’ are essential to core processes and contribute large chunks to the company’s long-term goals. Customer support tools, payment processing software, and marketing design tools are the primary tools in this category. Making sure to not adopt more than one tool with the same functionality to the core business process solves the problem of tool redundancy, and cuts down unnecessary SaaS costs.

Adopt a Centralized SaaS Stack

The most effective method to avoid tool functionality overlap is a centralized strategy for SaaS adoption. Centralization prevents the development of a shadow IT: team members who procure SaaS applications without the express approval of the IT department. A 2017 CIO analysis found that shadow IT represents 30 – 40 percent of IT spending in large organizations. Team members simply subscribe to SaaS services considered to serve an immediate need. In itself, the problem is connected to inefficiencies of enterprise IT. Enterprise IT departments might be slow to users’ appetite, or not align optimally with the business needs forcing teams to build their quick functionalities and capabilities in the shadow. Looking to cut costs by eliminating shadow ITs? — revamp the enterprise IT, and establish an approval workflow for SaaS.

Invest in SaaS Management Tools

To optimize operational processes by reducing costs, companies now invest in SaaS management tools. These tools monitor SaaS stacks centrally. They provide insights into which tool is deployed in different business units, the access holders, and the cost incurred for each tool. Managers leverage process insights like these to design optimization strategies and manage SaaS-related costs. There are no standardized criteria for selecting a SaaS management tool. However, a good management tool should fulfill simple business goals such as:

• Providing a single-platform insight on an enterprise’s SaaS stack
• Manage and reconcile software invoices seamlessly
• Identify redundant SaaS tools 
• Calculate usage trends for each tool on the SaaS stack
• Recommend strategies for optimizing software spend
• Safely store software access credentials
• Notify managers of software workflows including purchases

Design an Efficient Onboarding Process for New Hires

Companies propagate existing cultures at onboarding, making sure new workers understand the workflow guiding process design, tools, and reporting structures. Onboarding can get pretty tricky as managers map out what tool a new team member needs. New team members may also find it hard to adapt and learn new SaaS platforms quickly. Onboarding should focus on simplifying learning enterprise IT tools. This makes sure new team members do not resort to building a tool stack outside of the established ones and costing the company extra spending in SaaS procurement. There are a few questions you can consider to better understand the business needs of new hires.

• What tools does every new team member need for their job?
• Do we have a comprehensive list of all SaaS tools for new hires?
• Is there a workflow defining how hires can request access to existing SaaS tools?
• How are access credentials including passwords, bandwidth approval, and recovery code shared within the organization for new hires?

The right answers to these questions guide your new hires to comply with established software governance frameworks.

Final Thoughts 

SaaS challenges slow down process scalability and optimization. As your team expands and the demand for automation increases, you are likely to face these problems. At the end of the day, the approaches to solve these problems are simple: centralize your SaaS stack, adopt a streamlined workflow, establish a software governance framework, and crack down on shadow IT.