CIOs tackle the proliferation of SaaS applications

Strategy

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The proliferation of best-of-breed solutions in SaaS mode within the company is encouraging many IT departments to launch rationalization and integration strategies. Objectives: reduce technological debt, complexity and put costs under control.

AdvertisingAfter years of strategies focused on the adoption of cloud solutions, CIOs increasingly find themselves faced with an overdue bill: rationalizing, managing and integrating an ever-expanding range of SaaS offerings – many of which do not have t introduced by themselves. Salesforce, Workday, Atlassian, Oracle, Microsoft, GitHub and ServiceNow are just a few of the many vendors whose cloud applications form the new technology backbone of most businesses, in conjunction with custom internal applications and niche offerings. on public clouds.

“It’s a real challenge,” acknowledges Greg Beltzer, head of technology for the American wealth management arm of the Royal Bank of Canada (RBC). Greg Beltzer, other CIOs and industry analysts note that the explosion of SaaS deployments has led to inefficiencies and complexities that can no longer be ignored, even as enterprise adoption of the cloud continues.

As a result, SaaS portfolio management has become a top priority for many businesses. According to the 2023 IDC SaaS Path study, 67% of companies with more than 1,000 employees use a SaaS application management platform, says Frank Della Rosa, an analyst at IDC. A niche market that includes a wide range of solutions dedicated to this problem, such as Productiv, Zylo, Flexera One, Blissfully, Torii, BetterCloud, Zluri, Apptio and LeanIX, among many others.

A subject that CIOs can no longer ignore

For many CIOs, adopting cloud solutions has been a key part of their strategy to move away from data center management. But the proliferation of SaaS – which results not only from IT decisions but also from the technological spending choices of businesses – presents CIOs with a challenge that they have tried to avoid. There has been a lot of pressure to move platforms to the cloud for many good reasons, and organizations have taken advantage of the capabilities of these environments and the support of vendors. “However, the proliferation is undeniable,” notes Julie Mohr, principal analyst at Forrester. It is therefore impossible for CIOs to evade the question, according to her

Managing technical debt, streamlining services and reducing infrastructure complexity have always been essential for an organization to successfully create value, explains the analyst. Moving to the cloud does not make these aspects disappear, and they are not the responsibility of the provider. Managing a service portfolio is vital, and this is not limited to on-premises services.

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For many IT leaders, mergers and decentralization, coupled with cloud migration strategies, contribute significantly to the headaches of managing SaaS, leading to increased complexity and redundancies that can be difficult to discover.

Expedia Group, for example, has grown significantly through acquisitions to include 21 distinct travel brands, each with its own technology environment and SaaS providers, says Rajesh Naidu, chief architect and head of the platform. data and data management. Addressing the proliferation of solutions that results from this situation has not been simple.

We have just completed a three-year program to simplify our platform, explains Rajesh Naidu. During this process, we had the opportunity to re-evaluate all of the SaaS vendors we were working with and think about how we could simplify things across the organization. Having a rigorous strategy in place helped us reduce unnecessary complexity and proliferation.

Greg Beltzer of RBC highlights another difficulty linked to the proliferation of SaaS: integration. The manager has placed Salesforce Finance Services Cloud at the heart of his cloud strategy because of its extensibility and the availability of predefined connectors to other SaaS offerings, but overall his team relies on the platform of MuleSoft Anypoint integration to connect on-premises and cloud data.

The problem with SaaS applications is that they don’t talk to each other or integrate, says Greg Beltzer. It is often the data in these silos that must be integrated across multiple sites, multiple systems, especially in the real-time world we live in today, compared to the more batch-oriented architecture of yesteryear. about ten years old.

Limit the impact of previous decisions

Collin Campbell, business information manager at Cushman & Wakefield, designed a different solution to address this challenge. It uses external vendors and internal developers to write the code providing the integration capabilities. For him, the origin of part of the anxiety caused by the proliferation of SaaS lies in the ability to extract data from applications and adapt it for consumption by other application services. Cushman & Wakefield leverages a tangle of approximately 75 business-critical SaaS applications and 135 other SaaS solutions across business lines.

Cushman & Wakefield, which relies heavily on Microsoft technologies, does not rely on a global integration platform like MuleSoft because Collin Campbell considers it a very expensive solution that I believe can be replaced by a more expensive alternative. easy to implement. Instead, to work with Azure, the company uses licensed proprietary solutions and specific codes.

The commercial real estate services company, which is also laying the foundation for enterprise-wide AI, has seen its integration efforts pay off from a client perspective, according to the executive, who adds that Cushman & Wakefield clients themselves face similar problems when it comes to expansion and integration, and try to minimize the impact of their previous decisions, let’s say based on “purchasing logics”.

Manage over 100 key suppliers

For Bryan Muehlberger, CIO of sportswear brand Vuori, the SaaS breakthrough has also led to increased challenges in supplier management. We are starting to look for players in the market who can help us manage and track our licensing, our solution usage and our governance, says the CIO, who has seen a 25 to 50% increase in SaaS solutions in enterprise technology environments. over the last five to seven years.

In the past, we had between 15 and 30 key suppliers, today we have more than 100, he explains. It is sometimes difficult to manage a detailed budget per supplier. If we add resellers, the situation becomes even more complicated.

The race for functionalities, the multiplication of overlaps

Brian Woodring, CIO of Rocket Mortgage, a Detroit-based US mortgage lender with over 1,000 developers, and his team deployed an enterprise cloud architecture using AWS as the primary platform. But the CIO recognizes that, for Rocket Mortgage, which relies on Salesforce, Workday and ServiceNow like many other companies, the proliferation of SaaS is causing more and more headaches. Like Cushman & Wakefield, its engineers are often responsible for providing the code needed to integrate and resolve issues between SaaS.

And Brian Woodring thinks the problem isn’t going away any time soon. These systems are getting bigger and more complicated. The proliferation, the complexity, the contracts, all the new features – because we’re seeing an arms race where everyone is adding as much new stuff as they can, creating a lot of overlap – all contribute to the challenges my team faces, he said.

And while he acknowledges that his developers probably wouldn’t be able to build solutions in-house that could compete with the best enterprise SaaS solutions, he questions whether adopting a large number of SaaS solutions is worth it. Each solution comes with its own ecosystem of people that need to be hired and practices that need to be put in place, he explains. At the end of the day, you wonder if you really saved money.

Find the highlights of the CIO conference Managing the business in full SaaS
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