The Hidden Business Risks Of Rapid SaaS Change by Forbes – Entrepreneurs

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Across companies of all sizes, the adoption of software as a service (SaaS) has spread like wildfire. According to my SaaS management company’s annual  report of SaaS usage data across hundreds of organizations, in 2018, the typical business spent $343,000 per year on SaaS subscriptions — an increase of 78% in only one year. A similar 2019 study from Okta showed a 68% increase in the use of business apps over the past four years. This explosion in SaaS adoption shows that businesses are selecting technologies that promise to increase productivity, regardless of which departments they’re in.

But in reality, the picture of SaaS adoption in companies is as chaotic as the race to keep up with the competition. The average midsize (201-500 person) company’s technology stack changed by 39% between 2017 and 2018. This turnover rate is faster than the industry average for tech employee churn (one of the industries with the highest turnover rates according to LinkedIn). The rapid pace of change shows that SaaS has made it easier to deploy apps and switch to new providers as needed. In many ways, flexibility is a good thing, but there are also major risks associated with this level of turnover and technology change.

Here are the top three risks, as well as some pro tips for addressing these risks in organizations of all sizes:

The number of SaaS connections presents more opportunity for human error.

Perhaps the most striking statistic in my company’s 2019 research is just how many connections exist in the SaaS Graph — or the number of people who are connected to the company’s apps (like people-to-people connections in Facebook’s Social Graph, except app-to-people). The average midsize company uses about 120 apps (similarly, Okta’s aforementioned study found an average of 129 apps per company), which sounds manageable until you start to look at how many points of entry and exit exist. 

These 120 apps add up to almost 2,500 app-to-people connections in the organization. Each of these SaaS Graph connections represents a place where something can go wrong. As people share access to apps across teams, the question of “who has access to what data?” becomes harder to answer.

Pro tip: Rather than restrict access to apps (which is not practical and could seriously impede growth), it’s important to gain visibility into which employees have access to which apps. This level of visibility can prevent unauthorized access to apps or data. Visibility starts with maintaining a closed feedback loop between team leaders (who may be purchasing subscriptions and allocating seats directly among team members) and IT managers. Pay particularly close attention during onboarding and offboarding times to ensure that new employees gain access to the apps they need — and similarly, that access is revoked from employees who leave a team or the organization altogether.

Sprawl across departments complicates budgeting.

SaaS usage and spending aren’t relegated to a single department. Today, at the typical midsize company, there’s an average of 32 different billing owners across the company. The owners of these accounts are typically team leaders across all departments within the business.

This level of flexibility and freedom is good for productivity, but it can also be problematic for budgeting across the organization. Finance typically has less visibility into the spending and procurement process than a decade ago, when IT was centrally managed by a relatively small group of people.

Pro tip: Rather than deploy a command-and-control model of IT, modern, SaaS-forward organizations must embrace a collaborative IT approach. At least twice a year, finance, IT and team leaders should proactively meet to review the apps in play across teams (as well as whether or not these apps are working). These discussions will help all teams gain clarity into budgeting and IT needs. Team leaders should be firmly aware of their budget parameters and should be held accountable to operating within these limits throughout the year.

The SaaS orphan problem opens the door to security issues.

In 2018, our SaaS data trended heavily toward “orphaned” subscriptions: 71% of companies have subscriptions with no billing owner. These orphaned accounts may have been initiated by someone who has since left the company or moved to a different role. While the financial impacts of an orphaned subscription may be marginal enough for a company to miss, from a security perspective, the risks can be serious if accounts are left open to unauthorized users.

Pro tip: This trend is yet another example of the need for effective offboarding processes when employees are terminated or voluntarily leave a team or organization. Employees who have unauthorized access to corporate applications and data increase the risk of potential insider threat incidents. Each time an employee leaves, the IT team member (or assigned offboarding team member) should follow a checklist or predetermined process to shut off access to all apps and corporate systems.

Account security, however, extends much further than offboarding processes alone. Requiring that every employee uses a single-sign-on (SSO) software or password management software can remove some of the additional human error surrounding cybersecurity hygiene. In addition, an SSO platform can simplify the process of offboarding by identifying exactly which apps the employee has access to at the time of his or her departure.

SaaS growth isn’t slowing down anytime soon, if year-over-year spending growth is any indicator. However, 2018 data signaled some potentially hidden risks and added complexity that this growth is introducing for organizations of all sizes.

March 13, 2019 at 08:53AM
https://www.forbes.com/sites/theyec/2019/03/13/the-hidden-business-risks-of-rapid-saas-change/
Forbes – Entrepreneurs
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