It’s Time to Overcome the SaaS Complexity With a New Approach

Despite being considered a top security risk for companies over the last several years, Shadow IT saw a drastic increase throughout the pandemic as employees adopted their own SaaS solutions to navigate the remote work landscape. While these tools seem to ease the remote work hurdles, new incoming applications carry higher risks. Zylo CEO Eric Christopher discusses Shadow IT’s risk and how organizations can leverage an agile SaaS management approach to improve operations. 

Software as a service (SaaS) usage has risen over the past decade and experienced a sharp increaseOpens a new window during the shift to remote work prompted by the COVID-19 pandemic. In most cases, employees turned to new tools and their own devices to manage digital responsibilities and workflow. 

Gartner expects SaaS’s growth to continueOpens a new window , forecasting a 15% increase in worldwide revenue by the end of 2021. SaaS solutions offer essential benefits, like increased productivity and a better employee experience. But the problems arise when SaaS adoption goes unregulated by IT departments — a concept known as “shadow IT.” 

With remote work showing no signs of stoppingOpens a new window , SaaS adoption and shadow IT will continue to increase, posing a threat to your security and technology budget. To reduce this growth, enterprises need better visibility and better control over their SaaS applications. 

A comprehensive SaaS management strategy with shadow IT discovery can help enterprises regain control. This type of plan cuts costs, reduces security risks, and provides insight into employees’ app usage and preferences, helping employers improve the employee experience.

The Risks of Unregulated SaaS

As SaaS gains traction, it becomes more difficult for businesses to manage their technology environments. The average company now has three SaaS renewals per business day, costing organizations millions each year. In other words, organizations spend thousands per employee on SaaS annually. 

Yet, IT departments only have direct management of a quarter of applications, according to Zylo’s 2020 SaaS Management Benchmarks ReportOpens a new window .

Unapproved SaaS adoption prevents IT from vetting apps for compliance and security. In fact, one in five organizations experienced a data breach due to shadow ITOpens a new window . Gartner estimates this is closer to one in threeOpens a new window when taking into account shadow IoT devices.  

Beyond security and compliance concerns, shadow IT is draining your budget. Most organizations estimate they have 200 to 300 SaaS apps when in reality, the average is over 600Opens a new window . A lack of up-to-date inventory — known as a system of record (SOR) — leads to duplicate purchases of the same application or apps that perform the same function. 

Without an effective way to monitor your technology environment, new applications are more likely to exist as shadow IT. 

Learn More: How To Keep Corporate Data Safe in the Face of Growing Shadow IT

Shadow IT: Source of Innovation?

Shadow IT, when unregulated, is expensive and risky for organizations. More urgently, shadow IoT devices present a significant security risk. But allowing employees to select the cutting-edge SaaS applications they need, and to do so quickly, can improve efficiency and innovation. 

The freedom to choose your own SaaS improves the employee experience and work output. Shadow IT can also be a source for innovation. A whopping 97% of employees say they are more productive when using their preferred technologies at work.

The key to maintaining this agility and freedom is ensuring IT has an up-to-date SOR, which can be achieved through continuous shadow IT discovery. 

Adopting an Agile SaaS Management Approach

The typical discovery process for shadow IT is spreadsheet-driven, burdensome, and inaccurate. IT departments must act as detectives, cobbling together SaaS inventories from several sources. This procedure could include audits from individual departments, reports from a cloud access security broker, and accounting receipts. 

For a large company, the discovery process and inventorying could take six to nine months. Given organizations average 10 new applications a month; the SOR is inaccurate before it’s even completed.

Your SaaS management strategy needs to happen in real-time. Otherwise, it’s not providing a full picture of your technology ecosystem. The most accurate and cost-efficient way to achieve this is with a SaaS management solution.

Learn More: How to Fast-Track Insights Without Sacrificing Data Privacy or Security

What to Look For in a SaaS Management Partner

When evaluating a SaaS management solution, there are a few key capabilities you’ll want to look for: 

• Continuous monitoring: Uncover and track all SaaS apps, especially those that exist as shadow IT. Ensure your SaaS management solution uses AI monitoring to detect new SaaS applications. Some solutions can connect to products such as Expensify or NetSuite to see SaaS purchases as they’re made.
• Insights into usage: Identity which SaaS applications are most used by employees. These insights can drive investment to key technologies your employees need and eliminate those they don’t — helping you boost profitability. App usage can also reveal how to improve your organization. For example, if employees use many messaging apps (like Slack, Microsoft Teams, and Moxtra), you may want to standardize communication across the company.
• Planning expenses: Manage SaaS renewals ahead of time and forecast future application spend. This provides an accurate picture of what SaaS costs your organization year over year. A SaaS management solution should alert you to upcoming renewals. 
• Expertise: Organizations with a SaaS management solution often struggle to take action. Businesses uncover problems they didn’t expect and fail to resolve them. Your SaaS management vendor should also be your partner. They should help advise your IT team on its SaaS portfolio, shadow IT, and next steps.

IT leaders and CIOs with a comprehensive SaaS management strategy can gain control over their SaaS investments. This strategy allows you to uncover shadow IT and have a better understanding of employees’ SaaS preferences. An up-to-date SOR will also reveal applications that undermine security, financial, or governance best practices, helping your organization remain safe and compliant. 

Let us know if you liked this article or tell us on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We would love to hear from you!