Five SaaS metrics you need to be tracking

It’s 2018, and your business runs on SaaS. So why aren’t you taking it more seriously?

 

I mean beyond the expensive enterprise-level systems that keep your core processes running, which you might pay attention to. If your business is like most others, each department across the organization likely has its own SaaS-based operations … and you might not even know about them.


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On one hand, that’s one of the benefits of SaaS: anyone across the company can purchase whatever service they need – it’s not expensive, it doesn’t need high-level approval, and if it’s not working out, they can just try something new next year.

On the other hand, this lack of oversight and commitment means that most SaaS purchases are being made autonomously, on individual employee P-cards, and, thanks to their relatively low dollar values, being pretty much ignored. And that’s why you’re probably spending 30% more on SaaS than you should be.


Now that Gartner has claimed a widespread shift to SaaS is inevitable, and that “by 2020, a corporate ‘no-cloud’ policy will be as rare as a ‘no-Internet’ policy is today," you can rest assured that your little SaaS problem will continue to grow, unless you get it in check now.


To get started, here are five basic SaaS related metrics that your organization needs to start tracking:  


  1. The number of subscriptions for which you are actively paying. The first step to monitoring your SaaS usage is discovery of all your hidden subscriptions.  This means scouring through your organization’s accounting software and every single employee’s credit cards and expense reports.
  2. Your total annual SaaS spend. To get a real understanding of what you’re spending, you need to understand which you pay for in advance (likely annually) and which you are paying for monthly. Without oversight into your entire 12-month spending patterns, you won’t be looking at the entirety of your technology budget, which makes forecasting nearly impossible.
  3. Your SaaS budgets compared to what you’ve spent thus far in the fiscal year. If you don’t keep track of how much you planned to spend in comparison to how much you’re actually spending, you could get a nasty surprise at the end of the year (or sooner). If you keep track of your spend vs. your budget, you’re better able to adjust and rein in costs in when necessary.
  4. Your organization’s SaaS usage. Over- and under-usage are two of the biggest SaaS budget killers. SaaS subscriptions are often purchased by consumption-based or usage-based licenses, and both affect spend differently. With user-based licenses, employees may or may not be using the software. You might have purchased more licenses than you’re using, meaning you’re wasting money. In addition, employee turnover and organizational or departmental leadership and process changes can affect the number of users you need to maintain per subscription. When it comes to consumption-based licensing, usage (and by proxy, cost) can vary depending on the time of year, IT project status, and more.
  5. SaaS contract renewals. Whether you track renewals by month or by quarter, it’s crucial to know when they’re approaching. Find out more about why tracking your SaaS renewals is so important right here.