Why SaaS governance is Critical to Reduce Compliance Risk and Save Money 

Why SaaS governance is Critical to Reduce Compliance Risk and Save Money 

How can an enterprise develop a SaaS solution? How does one handle new app development in the Lifecycle? Do apps make a real difference in their user experience if they don’t generate revenue? You aren’t alone. Using SaaS, companies are increasingly looking into cutting expenses to improve processes and increase efficiency. The new technologies represent a significant change in technology from on-premise applications. Moreover, Saas allows businesses to add users online as they can provide instant access from anywhere. 

What is SaaS governance? 

SaaS governance is related to business practices for identifying and managing an organization’s subscription-based software and SaaS applications. SaaS governance provides an overall framework to improve the effectiveness of the SaaS stack while generating tangible and effective outcomes. It’s not just an evolution in IT governance that has helped create a logical foundation for any organization implementing SaaS applications in its growth trajectory. 

Why is SaaS governance important? 

SaaS Governance focuses on decreasing organizational risk, reducing costs, and improving investment outcomes. With no SaaS frameworks, many companies fly blindly. Shadow IT – application software acquired without ownership and control by central IT is a common risk

factor. Shadow IT is most commonly found when employees use SaaS tools. Not only does this software cause unknown expenses and tech stack inefficiency, but they are more likely to be affected by cybersecurity and privacy violations. Almost every employee is paying for SaaS services. 

Understanding SaaS governance models 

Until the advent of on-premises computer software in workplaces, it was IT. Today applications are decentralized and spread across organizations on every level. IT still has a lot less SaaS budget and manages less software. IT accounts for 22% of SaaS spending and 23% of SaaS apps. The figures show an increase in spending of 35% compared to the previous years. Today, the business unit accounts for over half of SaaS expenditures, a 65 % increase. Today 40% applies for LOBs. 

Centralized vs. Decentralized SaaS Governance 

You probably noticed an interesting trend in the centralization vs. decentralization of SaaS ownership. It’s easy to see why today’s IT system is so successful at centralizing the software system to attract the sprawling Shadow IT and solving inefficiencies that appear. Depending upon the organization and the industry, the regulations could prove to be a requirement. The shift from a SaaS to a hosted application also poses an inherent problem. Pandemics fundamentally changed our working methods. People no longer have to rely on the firewall or a centralized corporate network. It is necessary to compromise IT governance for SaaS. 

Freedom within a framework 

Building SaaS governance into enterprise architecture means introducing freedom in a framework. This approach creates predictability, leads to confidence, and enables faster execution. Freedom of the framework offers the perfect combination between centralization and decentralization. It involves creating centralized systems with clear visibility of the appropriate individuals within the organization. You will also help employees learn the basics of the SaaS environment. 

Effective governance throughout the SaaS Lifecycle

The lack of standardized business rules in the industry creates problems in selecting a SaaS governance strategy. The study found significant differences between American businesses managing SaaS approval processes such as procurements, deployment renewals, and offboarding. In addition, these differences expand progressively over time. 

Renewal and support 

Pulse reports show 60% of companies are considering SaaS renewals and support. It is second only to onboarding as an organization’s strategic management lifecycle strategy. A further increase is needed in the field of renewal support, as 60% of respondents believe that SMPs must offer an enhanced renewal management functionality. Experts handled 78% of Technical Assistance Requests from internal IT teams, and 42% of staff directly had contact with the vendor. Only 37% of requests have an administrator role. 


App discoverability is a crucial requirement for 71% of SaaS management platform investments. A system that detects and controls SaaS apps should be an essential element in governance. This allows businesses to assess the security and compliance requirements before they submit applications. Interestingly, the analysis found only 24% used SaaS management platforms for managing applications, and 21% used spreadsheets. Among those surveyed, 80% had not used the SaaS governance system. 


There are vast gaps in the way the company handles off-boarding. Among the firms surveyed, only 33% documented offboarding procedures, and 8% did not terminate an app altogether. The

consequences for business data that is lost or stolen are significant. Similarly, a standardized process guarantees data is secured as needed. More than 70 percent of respondents had exported data after closing SaaS accounts. Consequently, it’s dangerous for individuals to not have access to personal information – mainly those leaving. 

Procurement and Onboarding 

Saas app users have 43% of the buying decisions made in their departments. This is partly because implementation times can reach 2-6 months for up to 44% of teams. By bypassing IT departments, you may be able to reduce the time for value. Moreover, departmental abuses could cause more challenges in the long run. In contrast, most said they have been testing apps since January 1 for one year. Only 3% of the respondents reported having the capability to launch their new application within the same day. 


The findings also suggest that 16% attended the first training session during purchase, while 33% reported receiving training only once. This is likely true for applications obtained from the departmental level and not approved by IT. IT leaders schedule more training sessions than they do per annum in 27% of cases. The figure should only refer to licensed apps purchased through the company’s official channels. 39% of enterprises implement a SaaS training program. 

Benefits of SaaS Governance

When looking to sell SaaS online, you should know that SaaS Governance combines a wide array of features to help mitigate security risks. The tool sets the groundwork for building and managing the technology stack efficiently. 

Reduce security risks 

SaaS Governance provides you control over the application lifecycle. So it helps to reduce the risk of a scalability attack on your SaaS, like session hijackings. They are caused when hackers trick a user into using a malicious link or authorizing a password. It is, therefore, essential for the management team in your organization to be educated about the risks associated with utilizing company software. SaaS Governance helps you improve security by helping you understand where information is going. When you know what SaaS applications you have, look at how the data is stored within them. 

Ensure alignment of tools with business needs 

A SaaS governance framework allows organizations to make decisions in a SaaS framework that suits their business requirements. Start a successful IT collaboration. This aligns applications to business line needs. The ability for businesses to determine the tool used and their need is helpful. This is the information that Brad Pollard shared with SaaSMe Unfilter. Pollard, former chief executive officer of Tenable, observed that people weren’t using

smartphones until the epidemic started. He had fortunately been able to check phone information quickly in Zylo. 

Strengthen Fiscal Responsibility 

SaaS governance improves a corporation’s finances by establishing a consistent ownership process across its entire structure. It provides a framework for all the management of SaaS application development and the distribution responsibility for the implementation to the public. Consequently, your entire enterprise has become more SaaS conscious. As such, the soaring cost associated with Shadow IT, unoptimized licenses, and outdated software are brought under the rug, reducing expenditure for other business functions. 

Empower employees 

Governance is intended to educate employees about tools and the proper way to use those tools. Moreover, the system monitors e-mail applications as they enter, when they are used and when a new user wants a new application mutated. This ongoing system is designed to provide employees with an opportunity to gain access to the right tools to work efficiently. This technology is intended to help the company’s workforce know how to buy SaaS without creating Shadow IT. 

Best practices for successful SaaS governance The following is an outline for organizations that use decentralized governance. Identify & monitor your SaaS inventory 

The best practice for successful SaaS governance is to obtain apparent visibility for application operations inside an organization. In reality, it is impossible to control what nobody sees. But complete visibility can be difficult. SaaS environments are dynamic and changing in nature. Without ongoing monitoring, these applications could quickly turn into shadow IT, creating a hidden cost or putting them at risk. SaaS management may be overwhelmed by manual tasks like simple spreadsheets or Excel spreadsheets. 

Communicate and collaborate across the business 

SaaS Governance allows for effective communication between business units throughout all phases. This gives all stakeholders the right to be heard in SaaS conversations. In addition, it guarantees that the educational process continues. SaaS governance solutions provide employees with an array of approved corporate application catalogs to facilitate employee purchases. Thus, employees can benefit from SaaS functionality while operating within an integrated framework for decentralized SaaS compliance. 

Rationalize and Rightsize Your Application Portfolio

The strategy to optimize and right-size SaaS assets are the most satisfying part of governance, especially in terms of enhanced efficiency. 45% of SaaS licenses are unused. Therefore, SaaS must identify and rationalize applications and determine when they need replacement, retirement, or consolidation. It represents direct solutions for unused and outdated equipment in the business portfolio. Upon rationalization, there may be redundancy on the stack. 

Build a process for managing SaaS Acquisitions 

SaaS acquisitions are not just a project but an ongoing program. It is essential to create a robust approval procedure for this project. The approval process prevents unauthorized spending at no extra cost. It begins with acceptance when a new applicant has been approved for an application. 

Measure program effectiveness using metrics 

Another advantage of using SaaS governance is using metrics to evaluate efficiency. This metric helps assess how well a company’s business process has been adopted by SaaS management software and services. A phased process also provides a systematic method for measuring the various stages of the process before the implementation. ZYLOO customers found this when they began their SaaS system management. 


Software as a service (SaaS) is a type of cloud computing that offers software applications on a subscription basis. Many organizations are using SaaS to reduce the costs of deploying and managing their applications, but it’s important to have governance in place to manage compliance risks. SaaS governance can help you avoid penalties and save money by ensuring that your organization’s data is secure and compliant with regulations.

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