What is SaaS Governance? Why You Need It

Written by Hatice Ozsahan and David Worthington on February 7, 2023

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SaaS governance is an essential aspect of modern business that relies on Software-as-a-Service (SaaS) applications to run day-to-day operations. With the rapid adoption of SaaS, organizations face new challenges around managing these applications effectively.

According to a report, businesses today implement an average of 80 IT-sanctioned SaaS apps. While this number represents only the IT-approved side of the story, there is also a fact as Shadow IT that modern organizations must pay close attention to. The average enterprise utilizes 97% of cloud apps considered cloud shadow IT.

This is where SaaS governance comes in to provide a framework and processes to effectively manage SaaS investments. This article will explore what SaaS governance is, why it matters, and how it can benefit your organization. We’ll also dive into the different SaaS governance models and the best practices for a successful SaaS governance program. 

Whether you’re just starting out with SaaS or looking to improve your existing strategy, this article is a must-read for anyone looking to maximize their SaaS investments. Let’s dive in!

What Is SaaS Governance?

SaaS governance refers to the set of policies, procedures, and standards that organizations use to manage their use of SaaS applications. It encompasses the management of SaaS applications throughout their lifecycle, including procurement, deployment, usage, and retirement. 

SaaS governance aims to ensure that SaaS applications align with the organization’s business objectives and meet the required standards for security, privacy, and compliance. It also helps organizations manage SaaS-related risks, such as data loss or unauthorized access, and optimize the performance and cost of their SaaS applications. SaaS governance is an important aspect of IT governance and helps organizations to effectively manage their SaaS usage.

Benefits of SaaS Governance

SaaS governance empowers organizations to improve their overall performance, reduce risk, and increase efficiency. Here are some of the key benefits of SaaS Governance:

1. Better Data Management

SaaS Governance provides a framework for managing data flow into, out of, and within SaaS applications, improving the accuracy and integrity of the information being stored.

2. Increased Security

SaaS Governance helps organizations implement security measures that protect sensitive information from theft, loss, or unauthorized access. This includes measures such as password management, access controls, and data encryption.

3. Cost Savings

SaaS Governance can help organizations identify and eliminate unnecessary expenses, reducing the overall cost of SaaS applications. By implementing a strong SaaS Governance program, organizations can ensure they are only paying for the applications and services they need.

4. Improved User Experience

SaaS Governance ensures that all SaaS products are used effectively and efficiently, improving the overall user experience for employees. This can lead to increased productivity and a more engaged workforce.

5. Regulatory Compliance

SaaS Governance helps organizations comply with regulations such as GDPR, HIPAA, and SOC2, reducing the risk of costly penalties and reputational damage. 

6. Efficient Vendor Management 

With the increasing use of SaaS applications, organizations must manage relationships with a growing number of vendors. SaaS Governance provides a framework for managing these relationships effectively, reducing the risk of vendor lock-in and ensuring a smooth transition to new vendors if needed.

SaaS Governance Models

SaaS governance models provide organizations with a framework for managing their SaaS investments effectively. There are several different SaaS governance models to choose from, each offering its own unique benefits and challenges. The following are some of the most commonly used SaaS governance models:

Centralized Governance Model

This model involves a central IT or SaaS management team responsible for the deployment, management, and governance of SaaS applications. This model is effective in large organizations where the IT department has the resources and expertise to manage SaaS applications effectively.

Decentralized Governance Model

This model involves delegating the management and governance of SaaS applications to individual departments or business units. This model is effective in smaller organizations or those with limited IT resources, as it allows departments to take ownership of their own SaaS investments.

Hybrid Governance Model

This model combines elements of the centralized and decentralized governance models, allowing organizations to choose the best approach for each SaaS application. This model is effective in organizations that want to retain centralized control while allowing departments to take ownership of their own SaaS investments.

Governance as a Service (GaaS) Model

This model involves outsourcing the management and governance of SaaS applications to a third-party service provider. This model is effective for organizations that want to focus on their core business activities, leaving the management and governance of SaaS applications to the experts.

Best Practices for Effective SaaS Governance

Implementing SaaS governance can seem overwhelming, but by following best practices, organizations can optimize their SaaS investments while reducing risk. Here are some of the best practices for an effective SaaS governance program:

1. Start with a Clear Vision

Before implementing SaaS governance, organizations should establish a clear vision of what they want to achieve. This includes identifying the specific business goals they want to meet, the risks they want to mitigate, and the key performance indicators they want to track.

2. Involve All Stakeholders

SaaS governance affects all parts of the organization, so it is important to involve all stakeholders in the process. This includes IT, business units, end-users, and executives. By involving all stakeholders, organizations can ensure that their SaaS governance program meets the needs of everyone impacted by it.

3. Establish Clear Policies and Procedures

To ensure the success of their SaaS governance program, organizations should establish clear policies and procedures for managing their SaaS investments. This includes guidelines for selecting, deploying, and managing SaaS applications and policies for managing data, security, and vendor relationships.

4. Embrace Automation

SaaS governance can be time-consuming and complex, but by embracing automation, organizations can streamline many of the manual processes involved. Automated tools can help organizations manage their SaaS investments more efficiently, reducing the risk of errors and freeing up staff time for more strategic activities.

5. Continuously Monitor and Review

SaaS governance is not a one-time event but an ongoing process. Organizations should continuously monitor and review their SaaS investments to confirm that they are meeting their goals and mitigating risk. Regular reviews also help organizations identify areas for improvement and make necessary changes to their SaaS governance program.

Managing Your SaaS Environment

SaaS governance is a crucial aspect of modern businesses that rely on SaaS applications. It provides organizations with a framework and processes to effectively manage their SaaS investments, ensuring they are delivering the desired results. With the growing adoption of SaaS, SaaS governance is becoming increasingly important for organizations of all sizes.

JumpCloud is a cloud directory service that offers a unified solution of SaaS, IT security, and asset management. With JumpCloud, you can eliminate shadow IT and gain full visibility into all apps and cloud infrastructure in an all-in-one solution. JumpCloud’s help customers to deliver secure and streamlined user provisioning, access request management, and utilization monitoring.

Our customers tell us that asset management is also important for security and IT operations. JumpCloud is enhancing its platform to unify SaaS, IT security, and asset management transactions.

You can try JumpCloud for free to determine if it’s right for your organization.

Hatice Ozsahan
David Worthington

I'm the JumpCloud Champion for Product, Security. JumpCloud and Microsoft certified, security analyst, a one-time tech journalist, and former IT director.

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