# Managing the Cost of Digital Transformation with SaaS Optimisation
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-23
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: How to Reign in Tech Costs and Optimise SaaS Spending in 2022
Meta Description: Discover top tips for reducing SaaS overspending, centralise decision-making data, streamline applications, and optimise tech spend for digital transformation
URL: https://financedigest.com/managing-the-cost-of-digital-transformation-with-saas-optimisationhtml

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_By_ **_Alexandre Dussurgey,_** _Head of Procurement,_ [_Sastrify_](https://sastrify.com) _–_ _the digital procurement platform for Software-as-a-Service products_

Catapulted into the spotlight by the demands that the Covid pandemic placed on business practices, 2022 has seen the process of digital transformation continue at pace. However, having integrated huge tech stacks of Cloud and Software-as-a-Service solutions to enable digitalisation, sometimes in a hurry, many companies are now finding that their tech [costs are spiralling out of control](https://www.financedigest.com/dutch-telecom-kpn-locks-in-2023-targets-helped-by-cost-controls.html "Dutch telecom KPN locks in 2023 targets helped by cost controls").

Particularly in the face of an economic downturn, there is now a need to rein these costs in and ensure ROI on all tech spend made in the name of [digital transformation](https://www.financedigest.com/digital-transformation-for-the-world-of-finance-the-rise-in-collaboration-tools-and-saas-applications.html "Digital transformation for the world of finance: The rise in collaboration tools and SaaS applications "). With cloud and software [costs representing the highest overhead behind employees](https://www.financedigest.com/5-ways-to-support-your-employees-during-the-cost-of-living-crisis.html "5 ways to support your employees during the cost of living crisis "), finding ways to bring clarity to tech chaos and discover hidden or unnecessary costs to manage spending will be a crucial means of negotiating economic turbulence. Our [data shows that 78% of businesses](https://www.financedigest.com/big-data-lowers-insurance-premiums-and-optimises-business-performance.html "Big Data Lowers Insurance Premiums and Optimises Business Performance") overspent on SaaS in 2022 – sometimes by up to 7 figures – so SaaS subscriptions are a good place to start for those looking to make savings.

One of the great things about SaaS stacks is that they are [designed to grow your business](https://www.financedigest.com/3-ways-to-go-about-testing-your-business-ux-design.html "3 Ways to Go About Testing Your Business’ UX Design"). It is their agile nature that makes them so appealing. However, that also means that it’s easy for companies to [lose sight](https://www.financedigest.com/soccer-jittery-arsenal-losing-their-grip-with-summit-in-sight.html "Soccer-Jittery Arsenal losing their grip with summit in sight") of how many apps or solutions they use. While IT departments were once considered the gatekeepers of an organisation’s tech stack, today’s distributed workforces often mean that IT tools have become decentralised. Gaining a clear [overview of which SaaS applications](https://www.financedigest.com/rowing-boats-market-key-players-industry-overview-applications-and-analysis-2029.html "Rowing Boats Market Key Players, Industry Overview, Applications and Analysis 2029") are being used, how, when, and by whom, where renewals fall and how much they are likely to cost all becomes increasingly difficult. But that is what is needed if [costs are to be brought under control](https://www.financedigest.com/back-to-basics-for-cost-control-as-the-usual-levers-lose-value.html "Back to basics for cost control as the usual levers lose value").

It’s not simply about taking the axe to your stack – it’s still important to maintain functionality, ability, and [user experience](https://www.financedigest.com/poor-user-experience-plaguing-wealth-management-firms-warns-radical-company.html "Poor user experience plaguing wealth management firms, warns Radical Company"). But by reducing waste, discovering hidden SaaS, using tools more efficiently and rationalising where necessary and enabling better SaaS [management and procurement practices](https://www.financedigest.com/5-practical-ways-to-manage-your-business-expenses.html "5 Practical Ways To Manage Your Business Expenses"), businesses can optimise spending – often quite significantly.

Here are our top tips for being able to see the wood for the trees and make meaningful changes for SaaS cost-effectiveness:

**Centralise decision-making data.**

[Companies often need](https://www.financedigest.com/italys-windfall-tax-on-energy-companies-needs-to-be-rewritten-pm.html "Italy’s windfall tax on energy companies needs to be rewritten – PM") to be made aware that they have multiple contracts for the same tool, creating inefficiencies and higher spending. When separate departments work independently, it’s difficult for all [team members](https://www.financedigest.com/playground-xyz-appoints-new-team-members-as-it-solidifies-its-position-as-a-leader-in-the-attention-space.html "Playground xyz appoints new team members as it solidifies its position as a leader in the attention space") to utilise SaaS infrastructure fully. Different departments may be taking on licences for existing tools or are unaware of ongoing subscriptions that could make their [work lives more manageable](https://www.financedigest.com/time-management-strategies-that-work.html "Time management strategies that work"). In a post-pandemic [world where companies are more commonly working on remote or hybrid](https://www.financedigest.com/how-hybrid-cloud-computing-offers-the-best-of-all-worlds.html "How hybrid cloud computing offers the best of all worlds") models, a rise in poor inter-department communication has significantly amplified the issue further. Large numbers of teams and employees can easily lead to overlap in SaaS app functions, especially if some solutions do multiple things. This will all represent areas of overspend. By centralising all contracts in one [place and defining a SaaS tool owner to ensure clear](https://www.financedigest.com/future-cheque-clearing-model-places-emphasis-on-speed-and-innovation.html "FUTURE CHEQUE CLEARING MODEL PLACES EMPHASIS ON SPEED AND INNOVATION") governance and responsibility internally, leaders gain better visibility and minimise the risk of inefficient purchasing.

**Visualise usage.**

It’s also essential to have visibility of SaaS tools that are being used less than you’d like them to be or, worse, at all. If usage is low, driving user adoption is a priority, or it’s time to let go of that tool. But that task becomes possible with knowledge of which tools are being used, and by whom. A robust, centralised SaaS network will help eliminate redundancies and [reduce unnecessary costs](https://www.financedigest.com/latam-airlines-reduces-cost-per-user-by-83-thanks-to-innovative-ad-technology.html "LATAM Airlines reduces Cost Per User by 83% thanks to innovative ad technology"). It can also lead to a more effective licence management strategy. For instance, you might have 100 users of a platform, but if you have full awareness of what it’s used for, you might find that 80 users only need the basic package. If that leaves only 20 needing advanced functionality, then buying those packages separately is more efficient than buying 100 advanced.

**Automate.**

According to MuleSoft’s [Top Digital Transformation Trends for 2023 report](https://www.mulesoft.com/lp/reports/top-digital-transformation-trends?&utm_source=google&utm_medium=cpc&utm_campaign=g-dx-uk-search-core&utm_term=digital%20transformation&utm_content=g-e-c&gclid=Cj0KCQiAgribBhDkARIsAASA5bu_0MKwMrZiN3IHDyM969_8tvIcCkzTu4Qqu1fg7KjKEk821Wqnj2AaAuOyEALw_wcB&gclsrc=aw.ds), automation will be central to many businesses’ strategies as they look for operational efficiencies, which rings true for SaaS management and optimisation. With the average [business using around 100 SaaS and cloud](https://www.financedigest.com/7-ways-cloud-technology-can-transform-business-finances.html "7 ways cloud technology can transform business finances") solutions (our typical client has 98), effectively handling them all is a complex and time-intensive task. But with the right tools, your SaaS stack can be automated in five minutes, giving you full access to all the insights on usage, spending, security risk, and more.

A key area for [automation is the renewal process](https://www.financedigest.com/what-businesses-can-achieve-with-microsofts-full-suite-of-process-automation-tools.html "What businesses can achieve with Microsoft’s full suite of process automation tools"). Having automated early warning systems in place to [enable timely](https://www.financedigest.com/allowing-yourself-time-to-grow-as-a-leader-consciously-will-enable-you-to-support-your-team-authentically.html "Allowing yourself time to grow as a leader, consciously, will enable you to support your team authentically") renegotiations is critical to an effective SaaS buying strategy. This could be obvious such as starting the process early for an upcoming renewal, knowing when to [turn off the auto-renewal clause to avoid being trapped with the same T&Cs for another year](https://www.financedigest.com/2043-the-year-britain-will-turn-cashless.html "2043: The year Britain will turn cashless") or two, or being aware of price increases and changes to pricing structure.

**Negotiate.**

Contract negotiation is a time and effort-intensive task. Our figures show that at least 10 hours of back and forth go into each SaaS contract, and if you’re a [business with 50-100 tools to manage](https://www.financedigest.com/four-reasons-whycloud-based-inventory-management-is-important-for-your-ecommerce-business.html "Four reasons whycloud-based inventory management is important for your ecommerce business"), that is a lot of time you could be spending elsewhere! But the challenge isn’t just the time investment. It can be tough to gain visibility into pricing, which might leave you feeling like you’re on the [back foot](https://www.financedigest.com/as-who-pandemic-pact-talks-begin-poor-countries-on-back-foot.html "As WHO pandemic pact talks begin, poor countries on back foot") when agreeing on a fair price. You might know that you shouldn’t be paying the list price for a particular solution, but with no clear guidance on what you should be paying for a certain number of licences, it can be hard to negotiate confidently. This is where procurement solutions can be worth their weight in gold. They help simplify the process by negotiating for you, leveraging benchmarked pricing [data](https://www.financedigest.com/german-bond-yields-give-up-rise-after-u-s-price-data.html "German bond yields give up rise after U.S. price data") to ensure you feel confident you’re getting the best price.

The [digital transformation](https://www.financedigest.com/world-class-finance-digital-transformation-and-analytics-based-decision-making-among-key-imperatives-for-creating-finance-agility.html "World-Class Finance: Digital Transformation and Analytics-Based Decision Making Among Key Imperatives for Creating Finance Agility") of business practices can reap many rewards. Enhanced customer interaction, smoother sales and [marketing processes](https://www.financedigest.com/downstream-processing-market-is-expected-to-cross-us-25-4-bn-by-the-end-of-2030-at-a-cagr-of-13.html "Downstream Processing Market is Expected to Cross Us$ 25.4 Bn by the End of 2030 at a CAGR of ~13%"), better internal collaboration and many more efficiencies can be achieved. But without ensuring that the same efficiency is applied to the cost of the transformation process and the related SaaS tools, the process could represent a considerable cost. But the good news is that by centralising, visualising and automating the entire SaaS management and procurement process, companies can save significant time, discover hidden savings and [cut unnecessary SaaS costs](https://www.financedigest.com/gms-cruise-to-focus-on-cost-cuts-as-it-ramps-up-robotaxis.html "GM’s Cruise to focus on cost cuts as it ramps up robotaxis") by up to 30%. And in these times of [economic uncertainty](https://www.financedigest.com/combatting-economic-uncertainty-in-2023-with-the-payments-sector-2.html "Combatting economic uncertainty in 2023 with the payments sector"), those cost savings could be critical.


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