Your business could be spending tens of thousands on SaaS applications—but are you really using them to your full advantage? Research says probably not.

Today, the average business uses 130 SaaS apps for day-to-day operations, a number that has steadily climbed over the past decade. Of those, 65% fall under the veil of shadow IT, meaning the IT team is unaware they were ever adopted.

So as an IT leader, how can you gain visibility into those apps and ensure they’re delivering the best possible value to the business?

That’s where SaaS optimization comes in. 

In this article, we’ll dive into SaaS optimization through a business lens, detailing simple strategies that will help you improve operational efficiency, control SaaS spend, and drive real value. 

We’ll cover: 

  • What is SaaS optimization? 
  • Why is SaaS optimization important?
  • How SaaS ops teams operate 
  • 13 SaaS optimization tips for IT leaders

Dig in to discover how you can get more for your SaaS spend.

What is SaaS optimization?

SaaS optimization is the strategic process of effectively managing software applications to ensure they deliver the maximum possible value to your business. It involves identifying applications through SaaS discovery, monitoring software usage with a SaaS management platform, managing subscriptions, strengthening security, and aligning tools with strategic business objectives. 

The difference between SaaS spend management and SaaS optimization 

While they sound similar, there’s an important distinction between SaaS spend management and SaaS optimization.

The former focuses solely on tracking and controlling costs with a goal to spend less. The latter has a broader scope that aims to maximize benefits like improved employee productivity, data security, and overall business efficiency. Simply put, SaaS optimization includes (but is not limited to) SaaS cost optimization and spend management. 

Why is SaaS optimization important? 

As businesses increasingly rely on SaaS solutions, the risks associated with managing them multiply. That said, SaaS apps can make it easier and more enjoyable for employees to get the job done. This means IT teams must strike a balance between empowering employees with the flexibility SaaS provides while mitigating the business risk—and that’s why SaaS optimization is so critical. 

With effective SaaS optimization, your business can benefit from: 

1. Stronger security and compliance 

More than half (55%) of companies have experienced a SaaS security incident. As the volume of apps used to do business continues to grow, it’s critical that IT teams have visibility into their technology landscape. Leveraging SaaS management solutions, SaaS optimization teams can minimize shadow IT and enable patching automation. They can also monitor unusual activity that, if left unchecked, can lead to devastating data breaches.

3. More predictable, controlled costs 

Shadow IT statistics reveal that 30 to 40% of IT spending can be attributed to technology resources the IT team isn’t aware of. Often, employees are paying for SaaS apps without knowing that similar tools already exist within the business. SaaS optimization aims to limit these redundancies and maximize existing tools to keep costs in check. 

4. Increased efficiency and productivity 

When each department operates like its own organization—purchasing its own SaaS tools—this creates silos and limits collaboration. SaaS optimization finds the sweet spot between empowering teams with the apps they need and encouraging centralized tools that foster company-wide teamwork. While the marketing team may need its own software for social media management, it’s likely beneficial for the team to use the same file management software as the rest of the organization.

The benefits of SaaS optimization are clear.

And yet, Auvik’s IT trends report showed that only 1 in 4 IT professionals have shadow IT visibility as a high priority for the year ahead. More clarity around what SaaS optimization is, how it can benefit the company and the best ways to execute, may help IT departments push for more change within their organizations.

book cover - The Modern Professional's Guide to Shadow IT

What’s your shadow IT risk factor?

Find out in this free guide and exercise kit.

How SaaS ops teams operate 

SaaS ops teams play a pivotal role in the optimization process. Composed of IT professionals with expertise in SaaS management, these teams focus on streamlining SaaS ecosystems to make them more manageable, secure, and aligned with business goals.

SaaS ops priorities can be broken down into three key categories: 

  • SaaS discovery — Leveraging shadow IT solutions, these teams work to gain visibility into the entire SaaS stack. You can’t optimize things without first knowing what the landscape looks like, so using SaaS management tools to gain a full picture view is essential. 
  • SaaS management — SaaS ops teams manage the configuration and integration of apps for optimal benefit to the end user. These experts stay on top of onboarding and offboarding users. They also leverage their understanding of business needs to negotiate contract renewals with vendors. 
  • SaaS security — Automation is a key component of SaaS security. Using intuitive SaaS management platforms, these teams monitor risk, maintain compliance, and mitigate vulnerabilities with automated alerts. They also control who in the organization has access to what systems and data, proactively maintaining security.
Venn diagram showing the overlap of saas discovery, saas management and saas security within SaaS Ops

13 SaaS optimization tips for IT leaders

1. Conduct regular SaaS audits

New apps are just a click away—and in a time where buying power is decentralized, it’s tricky for IT teams to keep a record of what’s being used, by who, and for what purpose.

For staff, this freedom can be beneficial. But for organizations, it can escalate risk and unnecessary spend. 

To get a hold on the state of SaaS apps in your organization, conduct regular audits that include the following:

  • Inventory of SaaS apps
  • Usage and performance analysis 
  • Security and compliance review 
  • Cost-benefit analysis

How often you review your SaaS portfolio may depend on several factors, but we recommend performing an audit quarterly, or at minimum annually.

2. Implement centralized SaaS management

Maintaining a clear line of site into business applications is a critical first step to optimization. But today, 59% of IT professionals find it difficult to manage SaaS sprawl. The solution lies in adopting a centralized approach that gives you oversight and governance while still granting teams some level of flexibility. 

With a unified view across your organization’s SaaS stack, your IT team can spend less time chasing department heads for details and take back the control needed to optimize your environment. Centralization becomes much easier with a SaaS management platform that tracks software inventory, security incidents, and SaaS usage in a single location.

3. Enhance security protocols

Studies show that 95% of cybersecurity breaches can be attributed to human error. When employees are downloading new apps without governance, the risk of the app provider suddenly becomes yours. That’s why it’s critical to get ahead of the risk by implementing SaaS security protocols. 

Basic security protocols to consider implementing include compulsory multi-factor authentication for SaaS apps and advanced encryption for data that’s transferred and stored between your company’s network and third-party apps. In addition, prioritize adopting a platform like Auvik SaaS Management that can monitor vendor incidents and send you proactive security alerts.

4. Rightsize your SaaS apps

Companies spend an average of $43,500 annually on SaaS apps that are unknowingly going unused by employees. SaaS spend optimization starts with analyzing your subscription usage to identify opportunities for cost reduction. Ideally, your usage rates would be 100%—but since needs fluctuate, consider 90% a good benchmark. If your usage rate is below that, it’s time to rightsize subscriptions. 

Rightsizing includes downgrading plans with unnecessary licenses and eliminating applications that are underutilized. Say your marketing and sales department uses HubSpot to manage accounts. You’re currently paying for 20 licenses, but since restructuring the team, only 15 seats are being actively used. This puts your usage rate at 75% and tells you it’s time to renegotiate your contract. 

5. Promote SaaS integrations

Integration challenges slow down 85% of organizations in their digital transformation efforts. When each department uses different systems, it creates data silos that break down cross-departmental collaboration and productivity—but integrating SaaS apps can improve data flow and process efficiency. 

Begin by identifying which apps have native integrations that can easily be switched on to improve data flow, and which apps could benefit from a custom integration. For example, you may want your CRM (Customer Relationship Management) software to integrate with your ERP (Enterprise Resource Planning) system so that all customer sales and invoicing data is up to date in a central location. 

6. Foster SaaS literacy 

When used to their full potential, SaaS apps can be a game changer for productivity. But often, organizations adopt SaaS solutions without adequate training and end up paying big money for tools that are underutilized. One study found that for every 1,000 employees, inadequate training costs businesses an average of $13.5 million per year. 

To maximize productivity, train your employees on how to effectively use the SaaS tools you invest in. Many SaaS providers offer free training programs, but these often go unused. As a SaaS ops professional, it’s part of your role to ensure these programs are communicated and leveraged by users.

man on zoom call to discuss saas optimization tactics
Online business briefing. Male African American employee speak on video call with diverse multiracial colleagues, on laptop screen diverse business people, meeting online, group brainstorm

7. Establish SaaS governance policies

Defining clear policies for SaaS procurement, usage, and management helps avoid shadow IT and maintain compliance. Despite this, only 75% of corporate security policies cover the use of unapproved software, and 37% of companies don’t have clear consequences for the use of shadow IT. 

Here are some baseline SaaS policies your organization should consider creating: 

Acceptable use policy — Specifies what is acceptable and what is prohibited when it comes to using SaaS, including illegal activities, sharing sensitive information, and misuse of resources. 

Data governance policy — Defines the responsibilities and processes for managing the lifecycle of data within apps, including data entry standards and retention and deletion practices. 

Shadow IT policy — Addresses the use of unauthorized SaaS apps, establishing the requirements for assessing, reporting, and integrating new apps into the company’s ecosystem.

While creating these policies and having employees sign off is a great first step, it’s important to have employees review and re-sign annually to keep the information top of mind.

8. Monitor SaaS performance

Today, 40% of SaaS apps are unmanaged by the IT team, making it difficult to assess whether they meet business requirements and user expectations. By implementing a SaaS management platform, gaining visibility and insight into performance becomes a lot easier. 

So, what kinds of SaaS metrics should you monitor?

Application performance — Track analytics like uptime and availability to determine how reliable your systems are, limiting operational disruptions. 

Business impact — Consider usage rates and churn rates (the rate at which employees stop using the tool) to determine whether employees are satisfied and getting value. Security and compliance — Monitor the frequency and severity of app-related security incidents, how quickly they’re addressed by the provider, and the impact to your business to determine whether they comply with corporate security standards.

book cover - The Modern Professional's Guide to Shadow IT

What’s your shadow IT risk factor?

Find out in this free guide and exercise kit.

9. Engage in vendor management

Gartner defines vendor management as “a discipline that enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors through the deal lifecycle.” The same goes for SaaS vendors. 

Building strong relationships with your SaaS vendors can mean the difference between being treated as a valued client (and receiving the benefits that come with that) or just another user. One study revealed that of 20,000 SaaS deals analyzed, companies saved an average of 16% through negotiations, demonstrating the huge potential for cost savings that can be achieved through vendor management.

10. Prioritize the user experience

Think of your employees like your internal customers. If they’re happy with the tools and technologies they’re using, they’re going to be far more effective at work. In fact, 92% of employees believe having the right technology to do their job affects their level of satisfaction at work, and more engaged teams produce 21% more profitability.

When assessing what SaaS apps are the right fit for your team, consider whether the app offers an intuitive interface and how well the functionality aligns with user needs. For apps that are already implemented, measure their success on a regular basis—which leads us to our next point. 

11. Implement feedback loops

Encouraging feedback from users helps continuously identify areas for further SaaS optimization. Do this by fostering collaboration between IT and business leaders, encouraging open conversations about what’s working and where there’s friction. 

Consider implementing: 

  • Surveys — Conduct periodic surveys with employees to gauge their level of satisfaction with their SaaS stack and uncover opportunities for improvement. 
  • Quarterly reviews — Meet with department heads on a regular basis to review SaaS usage and determine where they could use support to improve operational efficiency and user experiences. 

12. Plan for scalability

When assessing SaaS solutions, it’s important to think of your needs now and how they might evolve in the future. This will help you avoid future disruptions and migrations that can hinder productivity and drive up costs. For example, if you’re adopting a new CRM that’s designed for small businesses, will it have the ability to adapt to your sales processes and licensing requirements as you grow? 

13. Adopt a SaaS management platform 

SaaS optimization isn’t a one-and-done deal—it’s an ongoing effort that requires strategic insight and effective management. All of this becomes simpler when you leverage the automation and reporting capabilities of a solution like Auvik SaaS Management. 

With Auvik, you can: 

  • Discover and manage — Take control of your SaaS environment with full visibility.
  • Maximize savings — Identify shadow IT and SaaS redundancies to cut unnecessary spend. 
  • Reduce risk — Proactively identify vendor security incidents and get alerted of risky behavior. 
  • Save time — Automatically build employee onboarding and offboarding checklists. 

If you’re ready to optimize your software ecosystem for better efficiency, reduced spend, and enhanced security, start by exploring our SaaS Management solution.

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