What Does an Application Portfolio Manager Do?
The popularity of software adoption has increased dramatically in recent years. According to Statista, there were around 17,000 software as a service (SaaS) companies in the United States alone in 2022, with a total of approximately 59 billion customers worldwide.
Companies with more than 1,000 employees use over 150 SaaS applications, and mid-sized organizations had an average of 32 different billing owners for their SaaS apps in 2020/2021, as reported by Insivia.
In today's IT landscape, where over 100 SaaS apps may be used, managing different billing owners and orphaned and unused apps can be challenging. The tangle of apps requires careful management and resolution, and this is where an application manager comes in.
What is an Application Portfolio Manager?
An application manager ensures a balanced SaaS environment that meets the company's needs without excess, maximizing the value of every investment. This proactive approach drives meaningful results for the company's tech stack.
According to Gartner, application portfolio management (APM) establishes a complete cycle that offers measurements for retiring applications, which then informs the process of acquiring new software. This means it covers not only the current situation but also guides the decision-making process for future steps.
The Unique Challenge to Application Portfolio Management
A significant 80% of SaaS users confess to using unapproved applications during their work. It can be quite challenging for IT teams to monitor SaaS solutions, unlike on-premises solutions. Despite this, the SaaS industry is rapidly expanding and is expected to grow by USD 313.45 billion over the next five years.
SDRs reach out to potential users daily, and these users can be influenced by ads or recommendations from colleagues, leading them to install multiple SaaS applications in mere minutes.
Managing the usage of SaaS can be a challenging task, especially when it comes to monitoring and analyzing the less visible and uncharted areas as you cannot manage the unseen. Considering that you've detected each of those applications, manually keeping track of their usage patterns can be time-consuming and prone to errors.
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What does an Application Portfolio Manager do?
As discussed earlier, the primary responsibility of an application portfolio manager is to ensure that the current SaaS stack aligns with the organization's needs. This involves selecting the appropriate applications for the portfolio and ensuring their efficient usage and adaptability to changing business requirements.
Here is a more detailed overview of their responsibilities and approach:
Collaboration Between Stakeholders
Application Portfolio Management is, in essence, a collaborative effort. Given the democratization of SaaS, multiple departments have a stake in its successful deployment and utilization. An application portfolio manager collaborates extensively with departments like IT, finance, and procurement, like a bridge between those.
They provide these stakeholders with the necessary visibility and data related to the SaaS tools, ensuring everyone is aligned and informed. Moreover, they engage and secure buy-in from executive leadership to make sure that APM strategies are aligned with broader business goals.
Vendor Management
APM is an ongoing endeavor, requiring perpetual effort rather than being a one-off project. Application portfolio managers are charged with daily oversight of the SaaS environment. This includes identifying areas for optimization and ensuring the SaaS portfolio evolves in tandem with organizational needs.
Routine operational check-ins are integral parts of their role, ensuring that the organization is always in a state of readiness, especially when software renewals come around.
Continuous Optimization
Efficiency is at the core of what application portfolio managers bring to the table. Upon identifying optimization chances, they ensure actionable steps are taken. This might mean reclaiming underutilized licenses or avoiding unnecessary costs. Spotting duplicate SaaS apps is another critical task; when duplicate software emerges, they spearhead consolidation efforts. This often involves setting up enterprise license agreements which not only provide better returns on investment but also enhance the utility of applications.
When the time comes for renewals, application portfolio managers don't just go through the motions. They delve into 'rightsizing', which involves forecasting business requirements to make informed decisions during the renewal of enterprise license agreements.
SaaS tools that are duplicated are those that are subscribed to by more than one employee or department, while redundant software applications have overlapping features.
How They do it?
To effectively manage applications, three distinct steps must be taken and maintained. Firstly, it is important to gain visibility into all aspects of the application in order to manage it properly.
Once the application portfolio manager has a clear view of all SaaS apps, the next step is to optimize and manage their usage. By identifying where each app fits and how it can be best utilized, the manager can then move on to the third step of maintenance.
For every decision, the manager must consider other potential options and benchmark them against the current one to select the most appropriate choice. The ultimate goal is to align SaaS apps with business concerns profitably.
Get Visibility
Before any optimization can occur, it's crucial to know what you're dealing with. An application portfolio manager first sets out to identify every SaaS application within the organization. This traditional approach often involved manual searches through company expenses and systematically listing applications in spreadsheets—a tedious task.
With a modern and comprehensive tool like Resmo, the process of discovering every SaaS app used within an organization has been greatly streamlined. With Resmo's SaaS Discovery, this task can be accomplished in minutes, leaving no stone unturned. This means that application portfolio managers no longer have to rely on time-consuming spreadsheets or manually dig through expense data. Resmo uncovers all the apps, the users and the usage data. This allows managers to focus on their ultimate goal: aligning this data with their business goals.
Optimize Licenses and Spend
Once the visibility is achieved, the next step is optimization. The goal is to identify rightsizing opportunities and optimize the existing SaaS portfolio. This involves detecting duplicate and underutilized applications, aligning license seats to actual usage and eliminating any software that's no longer needed. Effective communication and access to in-depth data on expenditure and utilization are vital here.
APMs can simplify this process with Remo dashboards, which provide the most comprehensive insights in the simplest way. In order to observe and make better decisions, APMs can create customized dashboards for their unique needs and set notification rules in order to get informed in real time when something changes.
Manage Renewals
Application portfolio managers not only focus on internal processes but also consider the broader industry context. They use insights and visibility tools to make informed decisions by harnessing internal data. The objective is to ensure that the organization's tech stack is as efficient as industry peers.
To achieve this, applications are benchmarked to guarantee that the organization gets comparable value for similar products. By leveraging data, informed decisions are made during the renewal process, ensuring that the organization's SaaS investments remain competitive and value-driven.
Overall, with the right tools and a strategic approach, application portfolio managers simplify the complex world of SaaS management into a streamlined, optimized, and value-generating endeavor for the organization.
Conclusion
The surge in SaaS adoption presents both opportunities and challenges for organizations. With thousands of apps and numerous overlapping functionalities, managing SaaS portfolios has never been more daunting.
Enter the role of the application portfolio manager. These professionals act as the linchpin in managing, optimizing, and evolving an organization's SaaS environment. Their efforts encompass collaboration with stakeholders, vendor management, continuous optimization, and strategic renewal management.
As the modern business ecosystem continues to weave SaaS solutions into its fabric, the importance of a structured, informed, and proactive approach to SaaS management cannot be overstated. Leveraging tools like Resmo can further enhance their efficiency, allowing businesses to maximize their SaaS investments, stay competitive, and ensure alignment with overarching business objectives.
