SaaS solutions bring immense benefits to growing companies, offering flexibility, speed, and seamless integrations. However, without proactive monitoring of SaaS reporting metrics, it’s easy for things to spiral out of control. From seat management to tracking renewals and preventing IT tool chaos, the sprawl can lead to headaches. Thankfully, you don’t have to manually track everything. To effectively measure the success of your SaaS strategy, it’s crucial to identify and monitor the right metrics. But remember, SaaS management is an ongoing process that requires continual monitoring and optimization. In this article, we delve into the most important SaaS reporting metrics you should keep an eye on. Understand the meaning behind these metrics for your business, spot red flags, and know when it’s time to make changes to your SaaS tools. Stay on top of your SaaS game with these valuable insights to drive business growth and make informed decisions.
4 Reporting Metrics SaaS
When it comes to managing a Software as a Service (SaaS) business, there are numerous benchmarks and metrics to consider. However, there are four reporting metrics that stand out as particularly crucial for SaaS managers.
These metrics include:
- Total SaaS spend
- SaaS utilization
- Number of applications
- Number of renewals on the horizon.
Understanding these four metrics is essential during the SaaS discovery process as they provide a holistic view of your organization’s landscape. By analyzing the total SaaS spend, you can gain insights into your financial health and identify potential areas for optimization. The number of applications is a key metric that can help you evaluate the size and complexity of your SaaS ecosystem. SaaS utilization provides valuable information on how effectively your organization is utilizing the software, while the number of renewals on the horizon offers insights into future revenue streams and customer loyalty.
By continually monitoring these metrics, SaaS managers can make more informed decisions and develop better strategies for business growth. These metrics offer actionable insights that enable managers to identify areas for improvement, optimize marketing efforts, and enhance the customer experience. With a clear understanding of these four reporting metrics, SaaS managers can navigate the ever-evolving SaaS landscape and drive their businesses towards success.
Total SaaS Spend
Instead of diving into the nitty-gritty details, it’s important to take a step back and regularly review your total SaaS spend. This simple yet powerful metric, especially when presented in a dashboard format, allows you to effortlessly spot trends and changes over time. Are you spending more or less than before? Does it align with the budget you initially set for the year? And most importantly, are you satisfied with your current expenditure, or do you think there’s room for optimization? By keeping a close eye on your SaaS spend, you can make informed decisions about where to invest your resources and potentially uncover opportunities to streamline your budget. With just a quick glance at this essential metric, you gain valuable insights into the financial health and efficiency of your organization.
Number of Applications
Keeping track of the number of applications used within your organization is a vital metric that can help you optimize your IT strategy. Surprisingly, many IT leaders underestimate the number of applications they use by 2-3 times. On average, organizations have a whopping 291 applications within their digital footprint. Finding the right balance of applications for your organization depends on its size and IT strategy, but here’s the truth: most companies have significant room for improvement. To optimize the applications in your tech stack, you must first understand how many you have in any given month. This baseline stat acts as your starting point on the journey to efficiency and effectiveness. So, take the time to assess and monitor the number of applications your organization uses, and discover the potential for streamlining and optimizing your IT infrastructure.
SaaS Utilization
SaaS utilization is a crucial metric that organizations should constantly monitor. It involves optimizing the number of SaaS tools in use within the organization. The question at the core of SaaS utilization is how well are your applications being utilized? To answer this question accurately, a reliable SaaS management platform is essential.
Wasting money on unused tools is a common pitfall that businesses should avoid. It’s important to assess the usage of each tool to ensure you’re getting value for your investment. For instance, are there any unused Zoom seats? Are your teams heavily reliant on one project management app and neglecting others in your tool stack?
Experts recommend aiming for a utilization rate of 90% or higher. This allows for some flexibility in the number of licenses while still ensuring maximum value from your SaaS investments. By continually monitoring and optimizing SaaS utilization, organizations can make informed decisions and drive efficient resource allocation.
Tracking SaaS utilization is vital for modern businesses looking to enhance their productivity and streamline operations. With a comprehensive understanding of how well each tool is utilized, organizations can maximize the return on their SaaS investments and stay ahead in the ever-evolving digital landscape.
Number of Renewals on the Horizon
SaaS renewals can often catch us off guard, leaving us with unexpected charges for subscriptions we may have forgotten about. According to the 2023 SaaS Management Index, the average organization faces a staggering 204 SaaS renewals per year. To put it in perspective, that’s almost 20 renewals to manage each month, which equates to nearly one renewal every business day.
By proactively tracking when your company’s SaaS renewals are approaching, you regain control over your budget and resources. Knowing which SaaS tools are due for renewal in the next three months allows you to prioritize your SaaS management decisions effectively.
For example, have you considered whether that collaboration tool is worth renewing alongside Slack? Taking the time to gather feedback, evaluate your options, and make an informed decision is crucial. By being aware of the number of renewals on the horizon, you give yourself the necessary time to assess each subscription and determine its value to your business.
Stay ahead of surprise charges and take charge of your SaaS subscriptions with proactive renewal tracking. It empowers you to make the best choices for your company and ensures you’re investing in tools that truly align with your needs and goals.
Reporting on SaaS is Important
Tracking and reporting on the results of your SaaS Management program is crucial for optimizing its effectiveness. The specific metrics and outcomes will vary depending on your organization and goals, but some key examples include cost savings and avoidance. By identifying which licenses can be right-sized and eliminating duplicate tools, you can save valuable budget resources. Being proactive with renewals also contributes to cost savings. Another important metric is the number of licenses reharvested and reclaimed, as this directly reflects the savings achieved. Additionally, reducing the number of SaaS applications showcases the efficiency of your program, even in the face of company growth. Putting apps behind SSO/security software helps address the concern of shadow IT and strengthens IT control. While there are numerous reporting metrics available, these examples highlight the most important ones for measuring the effectiveness of your SaaS Management program. Continually monitoring your SaaS allows you to identify and address any issues or red flags promptly.
