5 Tips for Effective SaaS License Management

SaaS stands for “software as a service” and refers to cloud-based applications that can be accessed from anywhere. SaaS companies often operate on a subscription model, offering licenses to businesses in various industries across the world.

SaaS licenses are essential for all kinds of companies, especially with an increasingly remote workforce. They enable employees to collaborate and use the same tools no matter where they’re located, streamlining operations and increasing efficiency.

But SaaS licenses aren’t always easy to manage. There are various types, and it can be tricky to keep track of which ones your teams are using and how much they’re paying for subscriptions. That’s why we’ve compiled the tips below to help you manage SaaS licenses effectively and stay on top of your software subscriptions.

What Is SaaS License Management?

A SaaS license is a subscription to a certain piece of software. It allows employees to access and use the tool via the cloud in exchange for a monthly fee. Since most businesses require multiple SaaS tools, subscription fees can quickly add up—which is one reason why SaaS license management is so important.

Managing SaaS licenses means monitoring the tools you’re paying for, determining which ones are being used effectively, and finding opportunities to optimize your subscriptions. Doing this well can save your company a lot of money; the average organization wastes significant resources on unused or underused SaaS licenses every year.

It can also help you avoid the dangers of shadow IT, which may include redundant software that employees may have subscribed to on their own. This is vital for data security and compliance; in order to follow all regulations and laws, you need to know exactly what tools your teams are using.

Types of SaaS Licenses

It’s important to understand the different kinds of SaaS licenses. Here are a few of the main types:

• Fixed price: This is the basic subscription model that charges a fixed amount for each month or year. SaaS companies often offer discounts on fixed-price licenses if you pay for a longer subscription period upfront.
• Consumption-based/usage-based: Pricing for these licenses is customized based on usage. For example, a cloud storage platform might charge you based on the amount of storage you need.
• Tiered: This model allows you to choose between different pricing levels, each of which may include a specific set of features, level of support, amount of storage, or other benefits.

5 Tips for Effective SaaS License Management

1. Start Early

Once you’ve decided to optimize your SaaS license management, you need to get started as soon as possible. This process requires input from all departments, and it takes time to mobilize a cross-functional team. You’ll also need enough time to gather detailed information on every SaaS license your company currently has.

If you start early, you’ll be able to collect all the necessary data from across the organization. This will give you a complete picture of your SaaS spending and usage, allowing you to analyze and adjust it as necessary.

2. Build SaaS License Management Into the Organizational Fabric

SaaS license management isn’t a one-time job; it’s an ongoing process that has to evolve over time. This is why it’s essential to build it into your company’s core functions. Unless it’s woven into everyday processes, it will likely be overlooked and eventually forgotten completely.

The best way to avoid losing track of SaaS license management is to make it a priority both now and in the future. Every employee should be constantly aware of their own SaaS usage, and those in leadership positions should review subscriptions on a regular basis. Your company’s SaaS needs can easily change from one day to the next.

3. Analyze Data and Track SaaS Renewals

Effectively managing SaaS licenses means constantly reviewing data on software usage. You need to have a system in place to collect this data and analyze it. The best way to do this is by implementing an automated spend management solution, which will give you real-time visibility and insights.

This process also involves tracking SaaS renewals so that you know when each subscription period ends. This way you can make an informed decision on whether you want to renew or cancel the subscription. This helps you avoid zombie subscriptions, which renew automatically without anyone realizing—and can be a huge waste of money.

4. Manage Licenses From a Centralized Location

When you consider all the different SaaS tools that your teams are using now or may need in the future, it might seem overwhelming. It’s no easy task to keep track of all these subscriptions when they’re spread out between several departments and managers. That’s why it’s vital to manage all your SaaS licenses from a centralized location.

You can use a SaaS spend management tool to consolidate data and get everything in one place. This streamlines the whole process and makes it easy to compare tools side by side, so you know which ones are benefiting your business and which ones should be reevaluated.

5. Track ROI

Every business decision should take ROI into account, and this is no less true when it comes to SaaS licenses. It might seem complicated to quantify the ROI of software, but it’s important to at least estimate the value of each subscription. This way you can compare it to the fees you’re paying and see if it’s a worthy investment.

Tracking ROI is an essential aspect of SaaS license management, as it lets you know how the value of each subscription changes over time. Certain software might be crucial for a particular project, but once that project ends, its ROI could plummet. The logical solution would be to cancel that subscription—but you’ll only know to do this if you’re monitoring ROI.

The Bottom Line

There’s no doubt that SaaS license management is a crucial element of business success. The tips above can help you optimize this process to make it efficient and effective.

If you want to incorporate SaaS into your overall spend strategy, consider implementing an expense management platform to collect and analyze all your data in one place.

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Mesh Content Team