In our new report, The State of Mid-Market SaaS Management, we asked more than 100 SaaS management professionals to share their thoughts on the present and future of the industry.
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Table of Contents
- Over the last few years, the market for enterprise SaaS management tools has exploded
- Methodology
- Key Findings
- Part 1: Profile of the Mid-Market SaaS Management Professional
- Part 2: Measuring Sentiments Regarding SaaS Management
- Usage monitoring remains a time-consuming and manual process.
- Spreadsheets continue to cling to life.
- Monthly review processes are the tried-and-true standard procedure.
- Analyzing spending habits across different types of tools.
- Onboarding and offboarding requires active management.
- A day in the life of SaaS management at a Mid-Market Company.
- Part 3: Predicting the Future of Mid-Market Saas Management
- Understanding the SaaS Management Landscape for 2021 and Beyond
Over the last few years, the market for enterprise SaaS management tools has exploded
Businesses are moving faster and in more markets, and they are willing to spend millions every year to
gain an edge. With so much going on at the top, though, the conversation sometimes leaves behind
some of the most important drivers of the SaaS management market: mid market companies.
True SaaS management requires a deep understanding of what tools do, where to use them, and how
to make the most of every tool. This is especially true for mid-market organizations, which don’t have the same resources as enterprises. One bad investment or ill-informed decision can make life difficult for any mid-market company.
Because SaaS management includes a variety of functions ranging from administration to license
management to workflow automation, many IT leaders are unsure how their strategies stack up. To
help organizations make smarter SaaS management choices, we interviewed 105 savvy decision-makers in the market. By collecting this data, we hope to empower leaders at other organizations to benchmark their progress and performance against their peers.
Methodology
onetool conducted this survey from December 23, 2020, to January 2, 2021. We surveyed 105 IT decision
-makers involved in the process of overseeing spend management for software. All 105 participants
whose data is represented here met this requirement to have their responses included in the final
results. The majority of respondents were employed at organizations with 500-1,000 employees.
Key Findings
Here are a few of the results that stood out in our research:
- Most organizations are managing 26-75 different tools. Tool usage varies across teams, but the average mid-market organization is using a substantial stack to grease the wheels. In our research, 31% of respondents used 36-50 tools, while 27% used 51-75.
- Organizations are increasingly relying on cloud software. 2020 and the push to remote work likely led to an increase in reliance on cloud solutions, as 34% of respondents said 26-50% of their software was cloud-based, while 48% said that number was between 51-75%.
- IT is generally responsible for SaaS management. IT professionals are the go-to experts for SaaS management nearly everywhere, with 95% claiming the function to be an IT responsibility.
- Many Organizations still rely heavily on spreadsheets. Spreadsheets may be old school, but 29% of respondents still say they use them to track and manage their different software tools
- Onboarding and offboarding requires active management. 42% of organizations still manually onboard employees to their apps.
- Monthly reviews are the most common. Our survey found 67% of respondents review their tool usage monthly.
- Reports of overspending focus on three areas. Survey participants named communication software, office software, and marketing software as the worst offenders.
- Monitoring time usage is a major undertaking. This is true both for IT and employees. In our results, 33% said they rely on manual reviews of each software, while 31% rely on personal conversations with employees.
- Budgets still reign supreme. Of all the challenges related to SaaS management, overspending took the crown with 41% of respondents naming avoidance of overspending as their top concern.
- This year is all about encouraging adoption. In light of overspending fears, organizations recognize the need for proper tool usage, with 40% of respondents saying adoption encouragement of existing tools would be their top focus this year.
Add it all up, and the key findings of our research paint a picture of knowledgeable, budget-conscious experts looking to balance expenditures with power.
In the following sections, we will look more closely at the responses to get a clearer understanding of the SaaS management landscape.
Part 1: Profile of the Mid-Market SaaS Management Professional
The answers are only as credible as the people giving them. For this survey, we only took responses
from individuals who were either involved with or currently overseeing SaaS management spending at
the time of polling. Organization sizes varied, but in most cases, respondents worked at mid-market
organizations with between 500-1,000 workers.
Most organizations use several dozen different tools
As expected, company size correlates strongly with the number of tools in use. Industry also plays a role, as companies with less complex products and services typically only need to use a handful of industry-specific tools in addition to standard marketing, sales, and customer service tools. More than two-thirds said their organizations use between 36-75 tools.
The era of the cloud has fully arrived.
At the beginning of 2020, many organizations did not trust cloud-based tools as much as they did by the end of the year. Remote work and the global pandemic forced companies to get familiar with the cloud, and quickly, if they wanted to stay competitive. According to our research, well over half of an organization’s tools usage is now on the cloud.
IT professionals are overwhelmingly responsible for SaaS management.
Surprise, surprise: IT professionals are in charge of tools. A smattering of department heads owns their own tool usage, but in 95.1% of cases, the IT crowd takes charge. With cybersecurity threats rising and operational needs for SaaS management aligning heavily with IT skills, this distribution makes sense for most organizations.
So, who are the respondents?
Respondents to this survey are IT professionals who have embraced the cloud (or who are working for
organizations that have done so) while managing tool sets with several dozen different tools. This group
has its differences, but overall, results strongly suggest that the research here is representative of the
typical SaaS management experience. As such, any truths derived from this research should be
applicable to the majority of mid-market companies.
Part 2: Measuring Sentiments Regarding SaaS Management
Even the best tools have their detractors, and even the best processes leave room for improvement. In
this section, we cover how our respondents feel about their SaaS management situations, how they
review tools and processes, and what their primary concerns are relating to their roles.
Usage monitoring remains a time-consuming and manual process.
Both IT professionals and non-IT employees spend a fair amount of time manually reviewing their tool usage. Manual reviews and personal conversations make up the biggest chunk, while reports from software vendors come in a close third. This state of affairs could indicate that generally, SaaS tools are not doing a good enough job to automate usage monitoring within themselves, forcing companies to find information elsewhere.
Spreadsheets continue to cling to life.
Who likes spreadsheets? Not many people do. However, spreadsheets account for nearly a third of tools tracking, with around half of organizations relying on internal tools. These results could indicate a reluctance to add yet another tool to keep track of existing tools, or spreadsheets could genuinely be the best option in many circumstances. Companies with the resources to build internal tools for this purpose may have the perfect solution, but even custom answers have their flaws, especially when the people doing the building typically focus on other priorities.
Monthly review processes are the tried-and-true standard procedure.
No one enjoys throwing money down the drain, which makes monthly tool reviews a good option for most organizations. Some opt for a quarterly approach, which makes sense for companies operating with longer sales or development cycles. Not every experiment can conclude in under four weeks.
Analyzing spending habits across different types of tools.
Nearly every person surveyed worked for an organization using every type of tool being evaluated. Only social media management software had fewer than 94 responses. This data indicates IT professionals are pleased with their spending in most cases, but around a third consistently worry about overspending. This is especially true in areas of soft skills, like communications, sales, and marketing. Could these results indicate a STEM bias in favor of site-building and accounting tools? Or are these areas genuinely more expensive than they ought to be for organizations?
Onboarding and offboarding requires active management.
When employees come and go, the IT professionals typically tie up the loose ends. In most cases, they have to do this directly, either by using internal tools or by going in manually. A smaller group relies on a third-party tool to manage the process. In the future, self-onboarding and offboarding tools will hopefully have a larger presence in this area.
A day in the life of SaaS management at a Mid-Market Company.
From a high level, IT professionals are concerned about the money they spend and often have to involve themselves manually in processes to ensure everything works smoothly. These results indicate a need for more automation, but for mid-market organizations measuring their performance against their peers, lack of automation should not suggest a lack of strategy. If anything, the organizations with meaningful automation should feel confident that they are ahead of the curve.
Part 3: Predicting the Future of Mid-Market Saas Management
We know what the situation looks like now, but how will it change over the next year? Many businesses had to throw their strategies out the window in 2020, and while 2021 will look different, companies generally do not expect to return to pre-pandemic norms. Across a variety of functions and issues, our survey respondents agree.
Spending is on the upswing this year.
A tiny 3.8% of respondents said they planned to use fewer tools this year, while more than 95% said they would use the same number or more, and a strong majority expect an increase. Part of this could be natural bias: some organizations will encounter financial difficulties that make adoption impossible, and no one plans to fail. In general, though, these strong results indicate both a strong market for helpful SaaS tools and a strong buyer base of companies seeking renewed growth after tough times.
Transparency on tool usage is not a widespread problem.
Most organizations strongly agree they have high levels of visibility regarding software and tool usage. Only 2.8% strongly disagree with that statement. Organizations that do not have high visibility should act quickly to rectify the issue, as not many other organizations seem to suffer from the same problem. Low visibility is a recipe for miscommunications disasters, so the sooner the fix happens, the better.
Everyone is worried about spending too much.
Unsurprisingly, the people who must answer for the tools budget do not want to overspend on tools and do want to optimize use of tools. The second-most common concern, overlap between tools, related both to overspending and to maintaining a single source of truth for different functions. Organizations suffer when they have two good options for the same function: our respondents seem to prefer to pick the best solution and avoid overlap whenever possible.
More tools are on the way in 2021.
Next year, different respondents want different things. Many again point to spending, with 31.7& looking to reduce overall costs. More, though, want to encourage greater adoption of the tools already within their organizations. Tools do not fulfill their function if they sit unused, and respondents do not want to pay for software seats teams don’t need. With greater adoption should come both greater productivity and greater transparency into usage.
Understanding the SaaS Management Landscape for 2021 and Beyond
Today’s SaaS management professional has a simple set of desires: affordable, effective tools people actually use. Yes, some areas could improve, including automation, employee provisioning, and review processes, but overall the situation is far from bleak. Most organizations feel generally confident in their tools and the people who use them.
This status quo does not indicate complacency, but it also does not indicate a large group of standouts, either. Companies looking for an edge through SaaS maintenance could find that some smarter investments and increased prioritization may lead to a significant competitive differentiator. Empowering your team is never a bad idea, and when implemented correctly, SaaS management can do just that.
