FinOps And SaaS management: collaboration is the key to optimisation
FinOps And SaaS management: collaboration is the key to optimisation
Cross-organisational initiatives can bring together the data that’s needed to derive the best value possible from technology investments.
Published on 12th February 2025
Today, with multiple ways for technology to get into your organization—from an employee paying for a single software-as-a-service (SaaS) subscription on their own credit card to massive numbers of assets and contracts with thousands of technology suppliers being assumed through a merger or acquisition—the problem of managing IT resources and expenses is growing exponentially.
The visibility gap and management challenges are more daunting as organizations aim to maximize the value of their rapidly growing investments in artificial intelligence (AI). However, technology can’t control costs by itself; a sound organizational approach is key.
Organizational structure is a huge variable when it comes to how well IT initiatives and spending are managed. It isn’t uncommon for different organizations to have different approaches. For example, a cloud-focused FinOps team might oversee IT asset management (ITAM) initiatives. Or conversely, ITAM might manage FinOps. SaaS management and security could be involved in these initiatives as well.
Consider these best practices in order to surface data that applies to a variety of functional areas, particularly FinOps and SaaS management.
The FinOps Approach: Expanding To SaaS And The Data Center
FinOps, defined by the FinOps Foundation as “an operational framework and cultural practice which maximizes the business value of cloud, enables timely data-driven decision-making, and creates financial accountability through collaboration between engineering, finance, and business teams,” was traditionally focused on cloud financial management. It’s an essential approach to controlling licenses in the cloud and cloud expenses.
Over the past two years, as FinOps practices matured and cloud dominance became clearer, the processes and principles of FinOps have been integrated with other areas. The FinOps Foundation says that the practice of FinOps is expanding beyond the public cloud by adding data centers and SaaS as core areas, called FinOps Scopes, that need to be considered to manage costs effectively.
The FinOps SaaS Scope provides a framework that can be applied iteratively at scale to evaluate things like decentralized procurement processes, the resulting organizational visibility and pricing models. The result for SaaS optimization is transparency and accountability in SaaS spending, which is evaluated by more traditional approaches to FinOps.
The Spread Of SaaS
SaaS can fall into several categories. For example, traditional software includes human resources (HR) and productivity applications, such as those from Salesforce, Workday, ServiceNow, Microsoft Office 365 and SAP. Another category includes databases and data platforms available on cloud marketplaces such as Databricks, MongoDB and Snowflake.
SaaS is increasingly common and increasingly difficult to manage. This issue is growing exponentially as adoption of AI and generative AI (GenAI) technologies are being adopted as SaaS. This is particularly noteworthy as OpenAI, supplier of ChatGPT, made the list of top five technology vendors that IT leaders currently or plan to spend the most within 2025.
The growing need to manage SaaS is reflected in current trends:
- Sixty-eight percent of IT decision-makers say that their business units are procuring far more cloud and SaaS than IT knows about.
- Sixty-four percent say that SaaS is a key area of increased investment.
- Twenty-six percent think they are overspending on SaaS applications.
How To Overcome Hurdles That Impede FinOps
Fortunately, cross-organizational initiatives can bring together the underlying data that’s required to manage expenses and derive the best value possible from technology investments. Data—normalized and enriched to create a single system of insight—is the foundation on which collaborative efforts can be built and refined.
Whether your chief financial officer (CFO), chief procurement officer (CPO), chief information officer (CIO) or someone else is leading the charge for spend optimization, collaborative improvements are essential for improving your FinOps and SaaS management initiatives.
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Image Credit
Imam Fathoni via Vecteezy
