Home How Increasing SaaS Adoption Can Cut Both Ways for Enterprises

How Increasing SaaS Adoption Can Cut Both Ways for Enterprises

Due to heightened competition, companies are now demanding increased agility and productivity from its teams. Many look to technology to gain competitive advantages. As such, organizations are now providing their teams and workers the latitude to use and adopt technologies and tools as they see fit.

Fortunately, pricing and distribution of software and applications have transitioned away from conventional licensing and deployment models. The move to subscription-based, browser-delivered approaches has allowed companies to efficiently acquire new tools and shift most of their IT spending to operating expenditure.

Today’s team members can simply subscribe to cloud-based Software-as-a-Service (SaaS) applications on a self-serve basis and without any oversight from IT gatekeeper overlords. Compared to the tedious procurement and installation processes associated with traditional perpetual licenses, which was the standard just a few years ago, this new model is a dream come true for innovators eager to experiment.

To illustrate, companies that deal with media production and design used to shell out almost $2,600 for Adobe‘s entire Creative Suite. Today, with the company’s shift to subscription-based distribution, access to its range of creative software can be obtained for about $600 per year, through its Creative Cloud service. Monthly plans are also available for those looking at short-term use. Such options lessen the impact of software cost even for large enterprises.

Companies have caught on to these benefits and are shifting their workloads to the cloud. Some 77 percent of cloud adopters are looking to add more SaaS workloads. Gartner estimates that by some point this year, SaaS revenue is set to reach $85.1 billion, which will comprise nearly 40 percent of total public cloud spending.

However, among the downsides of this growth is the increasing fragmentation of technology systems in organizations. Enterprises could be looking at hundreds of applications being used by employees which add to the complexity of their IT infrastructures. The need to manage this widespread SaaS use has even given rise to specialized management solutions like Torii and integrators like Built.io to aid IT teams in wrangling SaaS use across the organization.

New challenges are bound to emerge as more SaaS apps find their way into people’s methods of working.

New Challenges for Enterprise IT

Organizations adopting digital-first strategies see an average increase of 23 percent in revenue compared to digital laggards. Since a positive impact can be honestly felt at the bottom line, leaders have become more open to allowing employees to fiddle with new technologies. Because of this, teams can find themselves working with a wide selection of SaaS applications.

For example, it isn’t uncommon for marketers to use several SaaS tools to cover various tasks. They could be using Salesforce for customer relations, MailChimp for email marketing, and Growbots for prospecting and lead generation. These are just three of the widely-used marketing apps with distinct but related functionality, and space is saturated with scores of others.

Having numerous SaaS apps running within a company’s ecosystem creates potential issues for IT teams. To start, integrating these applications into the infrastructure can become a massive undertaking, especially if there is any need to connect them with on-premises infrastructures and other legacy systems.

Interoperability among SaaS apps can be limited, while considerations surrounding cybersecurity and regulatory compliance rarely adhere to any global standards. It’s critical for today’s systems to be able to share data and facilitate collaboration across workers.

There’s also the challenge of deriving the maximum value from the use of these applications. Aside from bringing efficiency, these tools should also be able to help leadership in management decisions. While many SaaS applications now have usage tracking for use in analytics, having these applications run siloed within the teams may deprive administration the ability to generating business intelligence and critical insights. The lack of consolidated data may prevent leaders from making timely decisions.

Security also becomes a pressing concern since these services essentially operate as third-party data processors that gain access to company and consumer information. These SaaS tools also expand the potential surface that’s exposed to cybersecurity threats. Given the strict data protection regulations like the GDPR in play, companies also have to be wary of non-compliance.

Minimizing the Downsides

Enterprises could take various measures to address these challenges and reduce the impact of SaaS adoption downsides. To start with, companies should start using tools to audit and control all SaaS users and subscriptions.

For example, Torii provides IT teams with the ability to manage all SaaS apps that run on the network. It can detect and list existing SaaS apps and alerts IT teams of any new apps that employees may start using, thanks to browser extensions that track activity, integrations with corporate meta-login services and the ability to upload data from legacy systems. It also integrates directly with various SaaS suites like Gsuite and Office365 and apps like Trello and Atlassian.

Instead of washing our hands clean of the challenges associated with a dynamic, always in flux SaaS stack, IT pros need to find new ways to regain control, redefining the value of IT to the organization. So long, help desk.

IT teams must also work towards integrating these SaaS tools to work alongside each other. Many SaaS tools are designed based on generic or idealized workflows. Making them fit into an enterprise’s established workflow may involve additional effort. Hence, integration platforms like Built.io are often needed to ensure interoperability across cloud solutions.

Integration helps recreate contiguous processes, circumventing the siloes created by SaaS stack diversity. Through integration, work could flow seamlessly across teams and departments. Leaders would also gain the benefit of drawing insights from consolidated data and make decisions based on accurate information.

Companies must also establish policies that cover employee use of SaaS. While it is important to give users leeway to use tools that allow them to be at their most productive, their adoption of SaaS tools must still be governed by clear policies that safeguard company data and ensure compliance especially where sensitive information is involved.

Control that Stack

Enterprises must have a clear understanding of the double-edged nature of SaaS adoption. By mitigating potential issues that may arise out of SaaS use, organizations should be able to enjoy the benefits that these applications can provide.

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The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Yoav Vilner

"Marketer to Watch" (Forbes). "Industry leader" (SAP). "Top 100 FinTech Influencer" . Tech blogger with exposure to millions. Advising startups across Europe, NYC, and Tel Aviv.

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