What is SaaS Spend Management?
Learn the ins-and-outs of SaaS spend management and how you can leverage software to manage your tech stack effectively.
What Is SaaS Spend Management?
SaaS management, or more specifically SaaS spend management, encompasses the ways in which businesses strategically optimize their tech stack. Take a moment and consider how many SaaS tools companies use—the average is around 130. How many SaaS tools is your company paying for? Do you even know, since shadow IT is such a major problem as well? As you have seen reflected in your own budget, tech stack proliferation comes with a high price. Don’t worry, SaaS management can help.
But it’s not just about cutting costs willy-nilly! When asking what the purpose of spend management is, you should remember that this process involves more than blindly cutting out tools. You should come away with a clear understanding of your SaaS investment, who is actually using what, and an increased security posture…but we’ll get into all of that in a moment. Let’s start at the beginning, shall we?
What Is the Meaning of Spend Management for SaaS?
It’s critical to understand the difference between spend management vs expense management in the context of your SaaS environment. Spend management is a much broader scope than expense management—with oversight for tracking and controlling expenses and the strategic planning and analysis of your tech stack as needs shift and evolve. This approach allows companies to make informed decisions about their SaaS investments, considering not just the immediate cost but also the long-term value and ROI of each app.
To effectively manage your SaaS spend, begin by gaining a complete view of your vendor data, software expenditures, and contractual details. Having a single source of truth is key for informed decision-making. Next, critically evaluate which tools are essential and which are not, considering both usage and cost-effectiveness. Select and procure the necessary SaaS tools based on your findings, and only acquire the exact number of licenses you need. Once the initial heavy lifting is done, you’ll need to proactively manage your new streamlined tech stack by enabling your team to self-service from a catalog of apps.
Sound complicated? It doesn’t have to be. Using a SaaS management platform like Lumos can streamline this entire process, helping you optimize your SaaS investments easily.
What Is a SaaS Management Tool?
A SaaS management tool is a specialized software solution designed to help businesses track, manage, and optimize their use of various SaaS applications. Now you may be thinking to yourself, wait a minute, what is spend management software? Isn’t it just another SaaS tool? Well…yes. But we’re not pulling your leg here—using a SaaS tool to manage your SaaS tools can actually reduce the number of applications in the long term!
It may help to think of a SaaS management tool as a toolbox. A top spend management software like Lumos provides a centralized source for subscription costs, usage patterns, and the overall effectiveness of each SaaS tool in your arsenal. By using Lumos, you can more easily identify redundancies, uncover shadow IT, negotiate better contracts, cut costs, and align your SaaS portfolio with your business goals.
What Are the Benefits of a SaaS Management Platform?
As we teased in the paragraph just above, the benefits of a SaaS management platform like Lumos include:
- Cost savings with some Lumos customers slashing their SaaS spend by over $200k.
- Increased visibility and elimination of shadow IT by using techniques like monitoring email subject lines for SaaS signups.
- Consolidated spend data into a single source of truth.
- Spend data analysis and reporting tools to help you dig into all that lovely data and make informed decisions and report on your success to leadership.
- Enhanced efficiency as IT teams can leverage automations and quickly carry out requests.
At the end of the day, it’s simple: Lumos can help you effectively and efficiently accomplish SaaS spend management, freeing up resources and allowing you to focus on your core business activities.
Simplify your SaaS: Start Saving with Lumos
For businesses looking to optimize their SaaS investments, the best spend management software companies offer solutions that are end-to-end and intuitive to use. Here at Lumos, our comprehensive platform delivers a user-friendly experience that helps you track and manage your SaaS sending. It’s time to take back control of your tech stack and drive your business towards greater efficiency and profitability. Ready to see the difference Lumos can make? Try our impact calculator or schedule a demo today.
