Software as a Service (SaaS)
Smarter SaaS Management: A Simple Framework to Streamline Your Application Environment
SaaS now sits at the center of daily operations for IT, business teams, and end users.
Cloud applications power collaboration, communication, HR workflows, financial reporting, customer engagement, and security monitoring. As organizations moved away from locally installed software toward cloud-first tools, Software as a Service (SaaS) quickly became the standard method for delivering business capabilities. Teams prefer SaaS because it offers fast deployment, automatic updates, and consistent access from any location or device. For IT leaders, SaaS can reduce maintenance work and simplify parts of the environment, helping teams respond more quickly to changing needs.
Cloud applications power collaboration, communication, HR workflows, financial reporting, customer engagement, and security monitoring. As organizations moved away from locally installed software toward cloud-first tools, Software as a Service (SaaS) quickly became the standard method for delivering business capabilities. Teams prefer SaaS because it offers fast deployment, automatic updates, and consistent access from any location or device. For IT leaders, SaaS can reduce maintenance work and simplify parts of the environment, helping teams respond more quickly to changing needs.
The benefits of strategically selected and governed SaaS are clear: IT gains agility and more predictable budgets, users have a consistent experience across locations, and organizations can integrate new capabilities without disrupting existing systems. But when SaaS grows without structure, the environment becomes difficult to manage. Many organizations now face a sprawl of overlapping tools, unclear ownership, unexpected renewals, and rising security and compliance risks. With applications spread across departments and cost centers, visibility becomes limited and long-term planning becomes harder.
56% of organizations report that employees upload sensitive data to unauthorized SaaS applications.
This guide gives IT, security, procurement, and finance leaders a practical framework for understanding their Software-as-a-Service environment, reducing unnecessary complexity, improving governance, and creating a sustainable model that supports ongoing business needs.
SaaS helps teams move quickly, but it grows faster than most organizations can manage without a strategic plan.
The increase in Software-as-a-Service adoption over the past decade happened quickly. Organizations shifted from software installed on their own servers to cloud-based applications to support hybrid and remote work, accelerate digital transformation, and give teams more flexibility in how they operate. Business units began purchasing software directly, often selecting best-of-breed tools for their teams without centralized oversight. While this approach increases agility, it also introduces complexity when dozens or even hundreds of tools accumulate without a clear adoption strategy.
As SaaS portfolios grow, so does the effort required to manage them. Most organizations now oversee more than 100 different cloud applications with varying licensing models, contractual terms, access permissions, and integration needs. Tracking these details manually is time-consuming and often incomplete, resulting in blind spots that affect cost, security, and productivity.
The SaaS Challenge: Scale, Cost, and Risk
SaaS helps teams move quickly, but it grows faster than most organizations can manage without a strategic plan. The increase in Software-as-a-Service adoption over the past decade happened quickly. Organizations shifted from software installed on their own servers to cloud-based applications to support hybrid and remote work, accelerate digital transformation, and give teams more flexibility in how they operate. Business units began purchasing software directly, often selecting best-of-breed tools for their teams without centralized oversight. While this approach increases agility, it also introduces complexity when dozens or even hundreds of tools accumulate without a clear adoption strategy.
As SaaS portfolios grow, so does the effort required to manage them. Most organizations now oversee more than 100 different cloud applications with varying licensing models, contractual terms, access permissions, and integration needs. Tracking these details manually is time-consuming and often incomplete, resulting in blind spots that affect cost, security, and productivity.
Organizations manage an average of 112 SaaS applications and waste more than $135,000 per year on unused software licenses.
The hidden costs of SaaS sprawl extend beyond subscription fees. Common issues include:
Operational challenges also surface. Siloed data reduces the accuracy of reporting and analytics. Manual provisioning and deprovisioning processes create delays and errors. Service desks must support a growing list of applications, each with its own interface and user challenges. Without a unified approach to integration, workflows become fragmented and inefficient.
- Duplicate tools across departments drive unnecessary spending and make consolidation harder.
- Underused or inactive licenses that accumulate when onboarding and offboarding processes are inconsistent.
- Unexpected renewals, often triggered by unclear ownership, leading to rushed decisions and missed negotiation opportunities.
- Dispersed SaaS costs across multiple budgets, making it difficult for leaders to understand total spend or measure return on investment.
Operational challenges also surface. Siloed data reduces the accuracy of reporting and analytics. Manual provisioning and deprovisioning processes create delays and errors. Service desks must support a growing list of applications, each with its own interface and user challenges. Without a unified approach to integration, workflows become fragmented and inefficient.
Building a Modern SaaS Strategy
A modern SaaS strategy gives organizations visibility, structure, and shared ownership across teams. An effective strategic approach to Software as a Service begins with understanding what tools exist, how they are used, who owns them, and whether they support business goals. This creates the foundation needed to streamline the application environment, reduce risk, and support long-term planning.
Step 1: Establish an Application Inventory
The first step is building a complete inventory of the SaaS applications your organization uses today. This involves gathering information from financial records, procurement systems, identity and access management tools, expense reports, endpoint data, and conversations with business units. An accurate inventory allows teams to see the full picture for the first time, revealing redundancies, unapproved applications, unused licenses, and gaps in ownership or oversight. A well-maintained inventory becomes a living document that supports ongoing governance. By assigning a clear business owner to each application, organizations establish accountability for budget, usage, and value.
Step 2: Rationalize the Portfolio
After establishing visibility, organizations can evaluate applications based on usage, value, risk, and alignment with business goals. This review helps identify where to keep, consolidate, or retire applications. Many organizations find opportunities to consolidate tools in categories such as messaging, document storage, collaboration, and project management. Reducing overlap lowers cost, simplifies user support, and improves the overall user experience.
Step 3: Align SaaS with Business Objectives
To support sustainable long-term planning, Software-as-a-Service selection should be tied to workflows and outcomes rather than features alone. Different departments have distinct needs, from HR onboarding to finance reporting to customer engagement. When requests for new tools are linked to clear business objectives and measurable success criteria, organizations make more consistent and strategic decisions.
Step 4: Define Policies and Standards
Clear governance policies help maintain consistency as new SaaS requests arise. These policies define the standard workflow for evaluating, approving, and onboarding applications. They also outline minimum security, privacy, and data handling requirements, as well as documentation needed before purchase. Access management expectations should be included so every application follows the same onboarding and offboarding process.
SaaS Approval Checklist
✔ Does the tool duplicate an existing platform?
✔ Have security and data requirements been reviewed?
✔ Who will own budget, usage, and vendor management?
Featured Productivity SaaS
Microsoft 365
Microsoft 365 is a cloud-based SaaS suite designed to boost productivity with powerful tools like Word, Excel, PowerPoint, Teams, and Outlook. It enables real-time collaboration, secure file storage through OneDrive, AI-driven features, and seamless updates. Accessible from anywhere, Microsoft 365 brings together communication, data management, and workflow automation to help businesses and individuals work smarter and more efficiently.
Selecting and Integrating SaaS Applications
Selecting Software as a Service thoughtfully ensures applications fit technical requirements, operational needs, and long-term goals. Once organizations have visibility into their environment, they can approach new SaaS decisions more systematically. A strong evaluation process reduces the likelihood of selecting overlapping or risky tools and helps teams compare options with clarity.
Vendor and Solution Evaluation
Evaluating SaaS solutions requires understanding both the technical and business implications. Strong providers demonstrate transparent security practices, offer flexible integration capabilities, and maintain roadmaps that align with organizational needs. Pricing models and service-level agreements should be clear, predictable, and well-documented.
Organizations should consider whether the application integrates easily with identity management tools, provides detailed logging for monitoring, supports APIs for automation, and meets required compliance standards. User experience, change impact, and training requirements also influence the success of adoption.
Organizations should consider whether the application integrates easily with identity management tools, provides detailed logging for monitoring, supports APIs for automation, and meets required compliance standards. User experience, change impact, and training requirements also influence the success of adoption.
Proof of Concept and Rollout
Before selecting a new application, many organizations run a proof of concept. This small-scale test helps validate whether the tool meets functional requirements, performs well under real conditions, and resonates with users. By defining success criteria early, IT teams can compare tools more effectively.
A planned rollout improves adoption and reduces disruptions. Training materials, communication plans, and configuration guidelines help users understand how the tool fits into daily work and where to go for support. Clear expectations reduce support burden and improve satisfaction.
A planned rollout improves adoption and reduces disruptions. Training materials, communication plans, and configuration guidelines help users understand how the tool fits into daily work and where to go for support. Clear expectations reduce support burden and improve satisfaction.
Integration into the Technology Stack
Integrating Software-as-a-Service applications strengthens workflows and reduces manual effort. API-based integrations, workflow automation, and data synchronization help ensure information flows consistently across tools. Monitoring service health and defining escalation paths keeps applications reliable and aligned to performance expectations.
Securing and Optimizing the SaaS Environment
Security, compliance, and cost optimization are essential for maintaining a healthy SaaS environment.Identity and Access Management
Identity management serves as the foundation of SaaS security. Applying least-privilege access ensures users receive only the permissions they need. Enabling single sign-on (SSO) improves user experience and strengthens authentication. Multifactor authentication (MFA) adds an additional layer of protection. Standard onboarding and offboarding workflows ensure access changes align with role changes and prevent lingering permissions.Compliance and Assurance
Different SaaS applications may need to comply with different regulatory or industry standards. Reviewing vendor documentation for standards like SOC 2, ISO 27001, GDPR, or HIPAA helps organizations understand where controls exist and where internal processes need to supplement gaps. Keeping these requirements documented supports audits and internal reviews and reduces uncertainty during compliance assessments.Monitoring and Continuous Oversight
Real-time usage metrics and activity logs help organizations identify unusual behavior early, such as unauthorized access or unexpected data movement. Continuous monitoring not only improves security posture but also supports operational visibility and lifecycle decision-making.What Continuous SaaS Oversight Looks Like
Effective monitoring is not about watching everything all the time. It is about knowing what “normal” looks like and spotting issues early. For most organizations, continuous SaaS oversight includes:- Reviewing user activity and access patterns on a regular basis
- Setting alerts for unusual logins, configuration changes, or large data transfers
- Tracking new integrations and third-party connections as they are added
- Ensuring access is removed promptly when roles change or employees leave
Spend Optimization
To control Software as a Service spend over time, organizations need to understand how pricing models work and how usage patterns affect costs.
Understanding Actual Usage
Managing SaaS costs becomes more straightforward when organizations understand how applications are actually being used. Looking at usage trends, license assignments, and feature adoption over time makes it easier to identify where licenses can be adjusted or where tools are no longer delivering value. These insights also support more productive renewal conversations, because decisions are based on real usage rather than assumptions or historical headcount.
Per-user and Account-Based Pricing
SaaS pricing models play a significant role in how costs scale. Many applications rely on per-user pricing, but vendors define “user” in different ways. Some licenses are tied to named users, while others are based on active users or per-account access. When licenses are assigned to named users, costs often increase as headcount grows but do not automatically decrease when employees leave or change roles. Without regular review, inactive accounts remain licensed and continue to inflate spend.
Usage-based Pricing and Cost Variability
Usage-based pricing introduces additional complexity. In these models, charges are linked to consumption metrics such as transactions, data storage, or API activity. While this approach can better reflect actual usage, it also reduces budget predictability. Periods of increased activity can lead to unexpected charges if usage is not monitored closely. Understanding which applications follow consumption-based pricing helps teams plan for variability and put appropriate controls in place.
Tiered Plans and Over-licensing Risk
Tiered pricing models add another layer to SaaS spend management. Basic, Pro, and Enterprise tiers bundle features for different needs, but organizations often assign higher tiers broadly for convenience. This can result in users being licensed for advanced capabilities they rarely use. Aligning license tiers to specific roles or job functions helps reduce waste while ensuring users still have access to the tools they need.
Hybrid Pricing Models
Some SaaS providers combine pricing approaches into hybrid models, such as a base subscription paired with usage-based overages. These contracts require careful attention to usage reporting and threshold definitions. Without clear visibility into how usage is measured and billed, overage costs can accumulate quietly over time.
Contract Terms and Renewal Flexibility
Contract terms have a direct impact on long-term SaaS costs. Agreements should allow organizations to adjust license counts at renewal based on current usage, not past assumptions. Transparent overage policies and access to detailed usage data make it easier to manage consumption-based pricing. It is also important to avoid contract language that limits flexibility or makes it difficult to reduce scope or transition away from a solution if business needs change.
SaaS portfolios ballooned to an average of 130 applications before dropping to 112 as tighter budgets took hold—yet companies still waste more than $135,000 a year on unused SaaS licenses.
Questions to Ask Before Renewing SaaS
✔ How many licenses went unused?
✔ Are we paying for overlapping tools?
✔ Did the application deliver the expected value?
Governance Framework and Next Steps
Governance helps organizations shift from reactive SaaS decisions to a consistent, predictable model.A strong governance framework outlines who owns each part of the Software-as-a-Service lifecycle and how decisions are made. Ownership should span IT, security, finance, and business units so responsibilities are shared and well understood. Approval workflows define how new tools enter the environment, while documentation standards ensure consistent recordkeeping. Regular reviews help track usage, value, and risk over time, while clear communication keeps stakeholders informed about changes, expectations, and standards.
With governance in place, organizations reduce surprises, improve control, and support long-term planning. SaaS becomes part of a broader strategic technology roadmap rather than a collection of disconnected tools.
How Connection Can Help
Organizations often need extra support to turn SaaS governance plans into repeatable, day-to-day practices.An experienced partner can help teams gain visibility into their application landscape, reduce risk, and make more informed decisions about licensing, security, and ongoing management.
Support typically includes software and SaaS inventory assessments, license and renewal optimization, and guidance on consolidating or rationalizing application portfolios. Security technology integration services help improve visibility across a multi-vendor Software-as-a-Service environment, streamline operations, and reduce risk. Device lifecycle management, data center services, and resiliency planning extend this support across the broader IT landscape, helping ensure SaaS aligns with infrastructure and business continuity needs.
SaaS the Right Way
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