Why It’s Important to Evaluate Your Cloud Applications Constantly

Spend Matters welcomes this guest post from Eric Christopher, CEO of Zylo.

While “setting and forgetting” may be a concept that works in some areas of business, the world of cloud applications is certainly not one of those. In fact, it’s critical that those who are in the thick of tech advancements for their organizations, such as IT procurement, constantly evaluate the cloud applications utilized across the enterprise. Due to this team’s unique access and insight into their organization’s technology infrastructure, conducting a monthly evaluation is a best practice.

According to Cisco research, the average enterprise now uses more than 1,200 individual cloud services across multiple departments. Conducting monthly evaluations prevents oversight of spend and utilization that may otherwise fly under the radar.

Why must IT procurement evaluate their technology stacks on such a frequent basis? What should these practitioners be looking for when reviewing their organization’s cloud subscriptions? We’ll review those questions and more in this article.

Monthly Cloud Technology Evaluations Are Necessary

It’s no secret that cloud usage continues to grow at an incredible rate. In fact, according to a recent Gartner report: “Cloud application services (SaaS) is forecast to grow 20.3% in 2016, to $37.7 billion. As software vendors shift their business models from on-premises licensed software to public cloud-based offerings, this trend will continue.”

Because of the staggering growth of the cloud and the rapid adoption of new tech within the enterprise ecosystem, traditional IT procurement often lacks visibility into the software that those across the organization are actually subscribing to and using. This has become largely due to decentralized purchasing where decisions are made outside of the procurement function at the departmental or even individual level.

Subscription costs can add up quickly and cause redundancy and overlap in unnecessary features. And with multiple purchasing points in an organization, many companies fail to fully leverage their entire spend volume with their suppliers at renewal time, resulting in point renewals rather than fully leveraged strategic negotiations.

Evaluating Internal Cloud Subscriptions

IT procurement must consider several questions when evaluating cloud subscriptions across the organization. Each question uncovers answers that will create visibility and increase the ability to make strategic decisions:

  • How many cloud-based applications does your organization use?
  • How much does your organization spend on cloud subscriptions each year versus the budgeted amount?
  • How fast is your cloud stack growing compared with your traditional on-prem stack?
  • What percentage of cloud subscriptions were purchased as Shadow IT?
  • How much of your cloud technology is used on a regular basis?
  • How much are you spending with a cloud provider that is outside of traditional license subscriptions (training, implementation costs, sponsorships, etc)?
  • What is your employee sentiment towards each cloud solution?
  • Are there duplicate systems across the enterprise that could be rolled into a master agreement?
  • Which applications create the most administrative process burden to your organization?

Understanding the answers to these questions on a real-time basis is key to being able to drive strategic, transformational optimization within your cloud IT environment.

Risks of Not Evaluating SaaS

When IT procurement doesn’t regularly evaluate its organizations’ cloud subscriptions, they are operating blindly and without the strategic framework needed to make important decisions or to offer data-backed suggestions to executives with confidence. Without regular insight into what technology is being purchased and utilized, how can IT procurement be strategic about important topics related to budgeting, forecasting and creating an inter-connected organization? Without full insight into the state of cloud technology at any given time, these practitioners forfeit real-time visibility that can help them to better leverage more strategic aspects of their role such as negotiating master agreements, tracking and optimizing spend and utilization, and understanding employee sentiment for each solution utilized.

Keeping up with the changing landscape is challenging both externally and internally. When IT procurement fails to maintain visibility into their own internal cloud practices, how is it possible to help drive the most informed decisions for the entire business?

SaaS Optimization For Strategic Decision Making

SaaS optimization platforms provide executives with a cloud command center that pulls in real-time data from all cloud software that is currently used across the organization. This information provides unprecedented visibility into cloud software costs, utilization and employee sentiment to arm leaders with the information they need to lead strategically today and well into the future.

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