Collaborative Approach: Financial Operations and SaaS Administration: Cooperation Leads to Efficiency Optimization
Conal Gallagher is the Chief Information Officer (CIO) for both Flexera and its division, Revenera, where he oversees IT and information security programs.
Today, due to various methods of technology integration into an organization—ranging from an employee purchasing a software-as-a-service (SaaS) subscription using their personal credit card to numerous assets and contracts through mergers or acquisitions—the challenge of managing IT resources and expenses is escalating rapidly.
As organizations strive to maximize the value of their investments in artificial intelligence (AI), the visibility gap and management challenges become even more daunting. However, technology alone cannot control costs; a strategic organizational approach is instrumental.
Organizational structure plays a significant role in managing IT initiatives and spending effectively. Different organizations may approach this task differently. For instance, a cloud-focused FinOps team could manage IT asset management (ITAM), while in other cases, ITAM might oversee FinOps. SaaS management and security could also be involved in these initiatives.
The importance of teamwork, particularly between security and engineering teams, has been emphasized before in the context of maximizing security. Organizational collaboration can also aid in managing IT investments, especially with the continuing growth of SaaS usage.
When striving to surface data applicable to various functional areas, such as FinOps and SaaS management, adhering to these best practices can be beneficial:
FinOps Approach: Expanding to SaaS and the Data Center
FinOps, described by the FinOps Foundation as "an operational framework and cultural practice that 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 previously primarily focused on cloud financial management. It is an essential tool for managing licenses in the cloud and controlling cloud expenses.
Over the past two years, as FinOps practices have matured and cloud dominance has become more pronounced, the FinOps principles have been integrated into other areas. The FinOps Foundation asserts that the practice of FinOps is expanding beyond the public cloud by incorporating data centers and SaaS as core areas, referred to as FinOps Scopes, which are essential to manage costs effectively.
The FinOps SaaS Scope offers a framework that can be applied iteratively at scale to evaluate factors such as decentralized procurement processes, resulting organizational visibility, and pricing models. This leads to transparency and accountability in SaaS spending, evaluated through conventional FinOps techniques.
The Spread of SaaS
SaaS can be categorized in various ways, such as human resources (HR) and productivity software (e.g., Salesforce, Workday, ServiceNow, Microsoft Office 365, and SAP) and databases and data platforms (e.g., Databricks, MongoDB, and Snowflake) available on cloud marketplaces.
SaaS is increasingly prevalent and difficult to manage, particularly as adoption of AI and generative AI (GenAI) technologies as SaaS continues to grow. This is notable as OpenAI, supplier of ChatGPT, has been named one of the top five technology vendors that IT leaders currently or plan to spend the most on by 2025.
The growing need to manage SaaS is reflected in current trends:
• Sixty-eight percent of IT decision-makers acknowledge that their business units are procuring far more cloud and SaaS than IT is aware of.
• Sixty-four percent indicate that SaaS is a key area of increased investment.
• Twenty-six percent believe they are overspending on SaaS applications.
Collectively, these figures indicate business scenarios where spend on SaaS is escalating, and overspending could be detrimental. SaaS also plays a significant role in the growth (and associated financial and security risks) of shadow IT.
Overcoming Barriers to FinOps
Fortunately, cross-organizational initiatives can gather the necessary data for managing expenses effectively and deriving the maximum value from technology investments. Data—normalized and enriched to create a single system of insight—serves as the foundation for collaborative efforts.
Whether your CFO, CPO, CIO, or another executive is driving the spend optimization effort, cross-functional cooperation is crucial for enhancing your FinOps and SaaS management initiatives.
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Conal Gallagher's expertise as the Chief Information Officer (CIO) is crucial in managing IT resources and expenses, especially in the context of the growing use of SaaS and the challenge of keeping track of spending in these areas.
Given the increasing prevalence and complexity of SaaS usage, Conal Gallagher's role in overseeing IT and information security programs becomes even more significant, as effective management is essential to avoid overspending and mitigate associated risks.
