Best Practices for Effective SaaS Renewal
March 22, 2022
5 minutes read
As companies’ SaaS portfolios become bigger and bigger, proper SaaS subscriptions and licenses management is needed as never before. Without this solution, it would be difficult to keep an eye on costs generated by dozens of SaaS applications as well as to understand if they are used to the full to have the assigned tasks done.
This article introduces a step-by-step SaaS renewal guide that discovers how to implement solid SaaS renewal management. Additionally, we explore the initial steps before the renewal, at renewal itself, and what comes after the renewal. Let us start with the SaaS subscriptions renewal strategy goals that can help you understand why this whole idea is worth it.
Why create a SaaS renewal strategy?
One of the reasons renewals catch asset managers off guard is that they don’t have a central system of record for all of their SaaS applications. SaaS portfolio in the companies is often in chaos. According to Flexera’s State of ITAM 2022 report one-third of IT asset management teams track SaaS usage, but almost half of them don’t monitor SaaS resources still plan to start someday. In addition to the previous point, nearly one-third, 29%, of SaaS software spend is underutilized or wasted. These facts make it clear that the renewal process isn’t properly managed in the majority of organizations, which can easily undercut budget and bring undue security risks.
The prevailing part of the organizations set the following goals while starting developing SaaS renewals strategy: fix processes, avoid missing renewal dates, remove wasteful resources, level up SaaS value, offer more opportunities to employees.
Below you can find a step-by-step guide on how to make the SaaS renewals strategy implementation go smoothly.
The preparation for the renewals starts with SaaS products and licenses inventory, as sometimes there are various unused SaaS subscriptions that renew automatically without notice on a monthly basis and drive SaaS costs.
Estimate SaaS deployment
With the rising interest in SaaS solutions and the increasing number of employees using shadow IT, it’s becoming challenging to keep up with the relevant information of what SaaS products are used in the organization, as well as how much all the licenses and subscriptions cost.
Shadow IT can be disastrous for the business as it causes the risk of increasing security threats like unauthorized access or sensitive data leakage. So before making any strategic moves it is better to test the waters and identify applications that are included in the optimization scope.
You can analyze the current situation of your SaaS products with proper resources monitoring. Binadox gives users the opportunity to view all the services presented in the company (through the SaaS Utilization Dashboard), as well as understand applications’ utilization patterns and discover the total cost of your SaaS portfolio and every single application’s cost in particular.
Implement app ownership
Before the times when cloud technologies became broadly used and cloud-based applications became popular, the IT team had a clear understanding of what SaaS SaaS products are used in the company and how many of them are actually utilized.
Nowadays, employees feel free to download any SaaS application that from their perspective will help them to make their work done well. However, it’s important to establish SaaS applications ownership – draw a clear picture of what licenses are assigned to whom. It can bring the light on the security issues caused by shadow IT in critical cases and give visible insights into the services utilization patterns.
Prioritizing renewals is an essential part of a proactive renewal process. Here is why: according to Productiv’s report, on average only 45% of company apps are being used on a regular basis.
To prioritize the SaaS tools that have the maximum value, highlight the ones that are temporarily used, convenient for the workers, profitable (so they influence teams’ and company’s productivity), and offer cost optimization opportunities.
In general, the SaaS renewal strategy consists of 4 steps:
- Eliminate the underutilized applications or encourage workers to use them more actively;
- Get rid of the applications if they’re unused and no longer valuable;
- Resize the plans that include extra licenses and drive cost before the renewal;
- Renew the relevant valuable services and take into account expanding the licenses, if required.
Once you’ve dealt with these operations, you can select one particular upcoming renewal with the highest priority and establish the actual renewal process.
Use a renewal calendar and set alerts
The most facilitated way to achieve SaaS visibility is the deployment of a SaaS management platform like Binadox that usually provides its users with a variety of features including a renewal calendar.
While using Binadox you can set required renewals notifications, so that you will be notified of the upcoming payments, and get recommendations either get rid of the unused applications or downsize the underutilized subscriptions by committing to a less expensive plan with fewer licenses. As a result, the company frees itself from the resources that are not relevant and needed at the moment.
Examine license types and optimization
Once you realized the actual SaaS applications’ utilization rates and costs in your company, you can compare them to the available license types. It’s a common practice, when a company purchases more licenses than necessary (due to lack of awareness or just in plenty) and pays for them, draining the budget.
In this case, companies can identify the number of licenses that are actually needed and downsize the subscriptions. For instance, Binadox has an Advice section that gives users recommendations to resize the applications’ licenses packages in order to distribute the budget more rationally. Also in the same section, you can find detailed cost-saving recommendations for Zoom, Microsoft Office 365, etc.
Additionally, you can schedule a meeting with a sales representative of the yet consumed SaaS solution to alter contract conditions or negotiate the price. Considering how competitive the SaaS market is, there is a huge possibility that the sales rep will take into account your request and will offer a more reasonable price.
Stay mindful of your SaaS renewals even after having the current renewal cycle completed. For this stage, we have collected some tips for you to continue improving your SaaS renewal strategy and go into your next renewal with confidence.
Update key purchase and renewal details
First things first – it’s recommended to document and store any updates to details such as pricing, additional features, consumption patterns, and so on. Also, document any alterations to renewal dates or notification frequency in a unified system of record created especially for the SaaS services.
Learn your lessons
The analytical process you’ve dealt with before shouldn’t be done in vain. Bear in mind all the conclusions you’ve made, when purchasing the licenses next time. Create a plan for the future SaaS resources deployment and development of SaaS management strategy. Later, it can save your time, nerves, and money.
To sum up
SaaS renewals management is a significant part of subscriptions and licenses management, which can be considered as an indicator displaying that your company gains the maximum benefit from the SaaS products usage.
Binadox helps to put SaaS services management in place. Using various Binadox features you can organize your SaaS resources, optimize their cost and make your life easier.
Sign up for a free trial to enjoy all the SaaS management opportunities Binadox can offer.