Optimizing SaaS Spends For Your Company Through Kano Analysis: A New Approach to Budgeting

SaaS tools have been able to change the professional landscape, and have played an important part in boosting productivity for the modern workplace.

But while the benefits of SaaS tools have been well documented, there is a risk that comes along with the usage of such tools. And oftentimes, they can be a major source for leaking company costs that might go unnoticed.

To put things into perspective, Gartner notes that as much as 25% of the software in IT operations may be unused at any point of time. Moreover, almost $34 billion is wasted on yearly licensing between the US and UK alone.

Companies now need to focus on fine-tuning their SaaS consumption so that they use only what they need. Towards that end, let’s take a look at some of the best tips to eliminate wastage & to optimize SaaS spends for your company.

5 Tips to Eliminate SaaS Wastage That You Can Implement Right Now

1. Keep Track of People Who Have Access

Osterman Research revealed that around nine out of ten former employees have access to SaaS services even after their term has ended. This is not only a SaaS issue, but also a security issue that you should be on top of to minimize excess spending.

2. Centralize Software Acquisition

In a system where employees themselves are responsible for using the company credit card to acquire tools, things can get out of hand easily. Delegating SaaS acquisition and use case metrics to a business technology team can help solve the problem for the long run.

3. License Management

The best way to optimize SaaS licenses is to manage them from time to time, instead of reducing the license volume altogether. The number of employees in different departments of the company are often changing, and will need access to these tools. Redistributing licenses based on the current scenario is often the best approach, and will help you manage the budget for the month effectively as well.

4. Cloud Cost Analysis

Many organisations turn a blind eye to the amount of money they are spending on software.Before solving the problem, you need to be aware of the extent to which the issue is bothering the company. A cloud cost analysis, that can link costs to business activities, will help you get a clear picture of how things are in terms of software usage.

Tools that provide a simplified analysis of your spending, and enable real-time spend monitoring are good ways to get you started.

From here, you will be better equipped to manage the situation based on the report generated.

5. Invite Employee Feedback and Suggestions

Keeping track of user logins and activity might help you gain a metric over the usage of SaaS tools. But, you should also consider feedback from your employees about the tools they use, or don’t. Encourage team members to inform you of the extent to which SaaS tools are helping their workflow. They may also be aware of a better tool on the market, which you could utilise to boost productivity.

Identifying your Needs – Optimizing Resources with KANO Analysis

The Kano model provides a way of assessing customer emotions, or product features on customers. Dr. Noriaki Kano is credited with the invention of this model, and it can help determine the satisfaction and functionality of the product simultaneously. The Kano model can be used to help you organise your SaaS spend as well.

Based on the kind of functionality that SaaS tools provide, and the degree of importance that tools have, they can be classified into three broad categories in the Kano analysis:

1. Core/Hygiene & Delighters

The Core category features any apps that provide a competitive advantage to the company using them. In addition, there is often no replacement on the market in case the tool stops working.

These apps do the basics perfectly well, and often overdeliver beyond their usual functionalities, which makes customers rate them highly.

Hubspot, for instance, provides an all-inclusive CRM service to companies. This cloud-based tool does everything needed for inbound marketing for your brand. And with a number of useful features, it eliminates the need for separate tools to manage leads, create email sequences and host landing pages.

Here are the tips you should follow for the important core apps for your company:

Proactive license management: Enables you to stay on top of the number of active users.
Invest in automation: Automate business processes that hamper productivity.
Increase partnerships with vendors and usage of tools: Having a one-to-one relationship with the vendor, and having a high usage rate is the ideal situation for core apps.

2. Essential/Satisfier

Essential or Satisfier apps do what is needed of them, and often lack the ‘something extra’ that can earn them a higher place in the value ladder. These kinds of apps maintain a linear relationship between the cost and the productivity boost that they offer.

An instance of an essential tool is a plagiarism checker for a blog site. It does the job and maintains a steady cost to value ratio. But, there is little else to add to the service it provides.

Here are the tips that you should follow to manage these kinds of services:

  • Eliminate wastage through unused license: Keep an eye on the usage rates of these apps, and consider discarding licenses if they are unused by employees.
  • Maintain usage and maintain price/spend: If the service can enhance the productivity of employees, create awareness among the users, and try to keep the costs in check.
  • Security and collaboration: Retract access from former employees, and people that aren’t authorised to use the service. Also, consider having only one account that can be used on multiple devices.

3. Periphery/Basic

Basic or periphery apps make up the third category, and offer less value than they cost. In other words, they don’t fulfill the expectations and provide a low return on investment. These services are often not worth the expense, and can ramp up the company expenses.

For example, spend management systems that only give you a rough estimate of your expenses. These tools often underdeliver, and can’t identify detailed spend areas on a daily basis. Hence, they aren’t offering the value that is being paid for.

Here are the tips to deal with periphery apps:

  • Reduce usage and reduce spend: Since these apps aren’t required in the core business process, reduce their usage throughout the company and in turn, the overall expenditure on them.
  • Do hardcore negotiation on pricing: If you need to include these services in your SaaS catalogue, try your best to negotiate a price that fits into your budget so as to not overspend.

If you’re exploring ways to optimize SaaS spend, Spenza can help you achieve your spend goals. Learn more about how we can simplify spend optimisation for your brand – Contact Us.

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