Industry executives and experts share their predictions for 2023.  Read them in this 15th annual VMblog.com series exclusive.

What The New Year Holds for IT and SaaS

By Uri Haramati, co-founder and CEO of Torii

Last year, my predictions focused on the influence of SaaS on the state of work. Autonomy flourished as companies embraced decentralization, IT's role continued to shift, and offboarding was (and still is) a key focus. 2023 will be all about realignment, returns, and re-envisioned strategies for SaaS management. Here's how I predict it'll play out.

Experts have already predicted that IT spending is still going to grow in 2023 despite economic challenges, albeit at a slower pace than what we've seen in the past couple years. But don't expect budgets to grow just for growth's sake. Organizations are looking for the most bang for their buck as the recession approaches.

Before investing in new software, organizations will look to optimize ROI of their essential, existing tools and eliminate waste. For SaaS applications, that means right-sizing licenses, removing duplicate apps, negotiating optimal renewals, and cutting apps where cost outweighs benefits.

I also expect that new SaaS-related investments will focus on automation and spend management tools. We all know time is money, so eliminating time-intensive manual tasks like onboarding and offboarding will free up resources better spent elsewhere. And perhaps it sounds counterintuitive to spend money on a tool that's built to reduce spending waste - but it makes total sense when it  pays for itself quickly and continually. SaaS management tools are built for the decentralized new normal, so they act as a single source of truth where key spending and contract data are easily accessible (and actionable) for the stakeholders who need it.

Organizations also need to be mindful of who is purchasing tech. There's quite a bit of buyer's remorse on tech investments and it's mainly non-IT buyers feeling this way. IT and Procurement teams with buying experience should share their expertise with business teams and app owners to make sure distributed adoption isn't a free-for-all that ends up costing more than it delivers.

As predicted last year, organizations embraced decentralization, a necessary evolution that allows department heads and even individuals to purchase software on their own without IT's involvement. Notably, 57% of IT professionals report that their companies now allow this adoption practice.

The question is, now that adoption (and costs) are distributed across the organization, do you have a clear, complete, data-driven understanding of what's in your SaaS stack? For a large majority of organizations, the answer is no or, at best, not really. Without infrastructure and intentionality on the part of app owners and adopters, decentralization impairs organizations' visibility and ability to wrangle SaaS sprawl.

Auditing SaaS stacks and gaining back visibility will be mission-critical for organizations in their mission to optimize costs. To conserve, consolidate and automate within their app ecosystems, organizations need a baseline (and ongoing) understanding of:

• What apps (sanctioned and unsanctioned) exist in your ecosystem
• Who owns each app
• Who uses each app, how, and why
• What each contract and license costs
• Where unassigned licenses exist
• When contract renewals will occur
• Which apps have capabilities that overlap with another in its category
• Which apps are compliant
  

The trick is, most organizations don't have the tools necessary to complete comprehensive, reliable, anytime audits of their SaaS stacks.

SaaS management is strengthened by tools that automate real-time application discovery, centralize data, and empower governance over a decentralized ecosystem. But it also requires cross-functional reinforcement.

Enterprises typically have several hundred apps in their tech stacks, with adoption, ownership, and cost and usage data scattered across the organization. IT teams simply can't manage it alone.

Torii's recent State of SaaS at Work Report found that collaboration between IT teams and their cross-functional peers is lacking-on average, only 20% of IT report that they collaborate with other teams on SaaS management tasks "often" or "continuously."  That's something I expect (and that needs) to change in 2023.

There needs to be a paradigm shift, so that organizations recognize SaaS management as the distributed practice it now is, where responsibilities are shared. IT will begin delegating tasks like onboarding or offboarding, working with security teams to uncover hidden apps, proactively sharing usage data with Procurement to prepare them for renewals, and empowering app owners to effectively manage their apps' costs and usage.

I view distributed SaaS management as a team sport, and 2023 is the year we'll see it play out. IT pros will act as team captains, while finance, procurement, security, business groups and other cross-functional teams get familiar with the SaaS management playbook.

Then, when they huddle up and run a SaaS play, everyone will be clear on their position on the field, the desired outcome, and how they'll achieve it.

##

ABOUT THE AUTHOR

Uri Haramati is co-founder and CEO of Torii, whose automated SaaS management platform helps modern IT drive businesses forward by making the best use of SaaS. A serial entrepreneur, Uri has founded several successful startups including Life on Air, the parent company behind popular apps such as Meerkat and Houseparty. He also started Skedook, an event discovery app. Uri is passionate about innovating technology that solves complex challenges and creates new opportunities.