Take a moment and reflect on Gandalf’s iconic role in the Lord of the Rings—we’re guessing that SaaS management isn’t the first thing that pops in your head. But there’s a parallel to be drawn here: he had a leadership role in a complex system, managing and guiding teams and resources with wisdom and insight. And, he equipped himself with the right tools to help him save Middle Earth as we know it.
Ready to go on a journey together? We’ve put together this short guide to help you follow in Gandalf’s footsteps as you dabble in SaaS spend management.
What Is the Principle of Spend Management for SaaS Tools?
The overarching principle of spend management for SaaS is simple: control and optimize the cost of your tech stack. After all, remember why spend management is important: SaaS tools are out of control! According to Statista, in 2022 organizations worldwide were using an average amount of 130 SaaS applications. Instead of a jumble of tools that drain your budget, you’re attempting to assemble a streamlined fellowship of tools without redundancies or unutilized functionality. Effective SaaS spend management ensures that you only invest in the software your company truly needs—and that you get the most out of each investment.
What Are the Categories of a Spend Management Process?
A robust spend management process can be broken down into several categories or steps: assessment, analysis, right-sizing, and maintenance. Let’s take a look at each category:
- Assessment: The first step is to rummage through all your drawers and chests to find out how many evil magic rings your uncle left you…er…or rather, figure out all of the SaaS tools that are in use. Shadow IT can be particularly tricky to get a good grasp in this phase!
- Analysis: Next, you have to figure out who is using what magic ring (or SaaS solution) and if they’re actually important or not. You’ll also look at factors like number of licenses, duplication of functionality, and gaps in your tech stack.
- Right-Sizing: Time to cast those money-sucking SaaS tools into the fires of Mount Doom! In other words, make sure you’re only paying for software that isn’t going to bring about the end of your business as you know it.
- Maintenance: Lastly, you need to make sure you’re managing subscription/license renewals and negotiating contracts on an ongoing basis—otherwise you never know what might sneak in under your nose (looking at you, Wormtongue).
What Is an Example of a SaaS Spend Management Process with Lumos?
In short, the SaaS spend management process with Lumos follows a similar flow as the above categories—it’s just a whole lot easier! The steps are:
- Integrate Lumos with your tech stack by leveraging the hundreds of integrations we support. And, if we don’t already have one, you can easily create a custom integration!
- Centralize your data into the single source of truth that is Lumos!
- Uncover shadow IT using Lumos’ tools like scanning email subject lines to find all the apps that employees are signing up for.
- Utilize Lumos’ deep analytics and reporting functionality to find cost optimization opportunities (and demonstrate your success to leadership after this whole process has worked!).
- Leverage automations like highlighting underutilized licenses or creating an app store for your employees so they can select the SaaS tools they need for themselves.
What Are the Benefits of a Spend Management Platform for SaaS?
Using a platform like Lumos offers significant benefits like cost savings, effective vendor management, enhanced IT efficiency, and increased security and compliance.
- Cost Savings: The primary benefit of Lumos is your ability to slay the budget-gobbling SaaS Balrog, significantly reducing your software costs. The savings add up quickly: some Lumos customers report saving over $200,000 in SaaS costs! You’ll see your own savings start to add up by wielding:
- Usage and license analytics that help you identify unused or underutilized licenses, ensuring you only pay for what you’re actually using.
- Detailed spend reporting that gives you a clear overview of your expenditures across the entire tech stack, allowing you to pinpoint areas where cost optimization is possible.
- Effective Vendor Management: Lumos offers a single source of truth for your SaaS vendors, including monitoring for all the unauthorized SaaS tools that employees sign up for. You can make the most of each contract come renewal season with deep data at your fingertips.
- Enhanced IT Efficiency: By centralizing management and incorporating automated tools, Lumos allows your IT team to shift into Gandalf’s role (strategic oversight) rather than toiling along as Bill the Pony (slogging through manual permissioning request after request).
- Increased Security and Compliance: With Lumos, you can enhance your security posture and compliance quickly and easily. You’ll be able to:
- Manage access requests efficiently through Slack requests and self-service catalogs.
- Enforce least privilege access to minimize security risks.
- Simplify audit reporting with one-click report generation to comply with regulations like SOX/SOC.
What Is the Top SaaS Product for SaaS Spend Management? Lumos.
In the ever expanding SaaS management platform market, Lumos shines brightly. When the beacon of overwhelmed businesses calls for aid, Lumos responds. It’s not just a tool; it’s a staunch ally in your journey to defeat shadow IT and navigate the complex landscape of SaaS spend management.
Lumos stands out in the market for our enormous impact for your bottom line. By choosing Lumos, you can navigate the complexities of SaaS spend management as confidently as the Fellowship setting out on their quest—armed with the best tools and knowledge for the journey ahead. If you’re curious to see how much you could save with Lumos, check out our cost savings calculator. Ready to take the first step? Schedule a demo today.