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SaaS Cost Management: The Success Journey of an Automotive Industry Leader

(Januar 2024)

Company Profile

  • Industry: Automotive
  • Size: 373k employees
  • Revenue: $8.7B
  • Region: US
  • Market: Mid-Market
Analysis:
$64K
year 1 cost savings

SaaS Cost Management Success Story | EXECUTIVE SUMMARY

This automotive company uses Cornerstone OnDemand’s learning management platform to provide key skills training to its North American employees. When the SaaS provider notified the organization that it had exceeded its entitlement and would need to purchase more licenses, they turned to Anglepoint for comprehensive software usage analysis and future expenditure optimization.

With the discovery that 50 percent of user accounts were inactive and a large proportion were duplicate accounts, Anglepoint successfully guided the client in remedying the situation, averting unplanned costs. Now, with greater visibility over its ongoing consumption and a deeper understanding of its licensing metrics, the company is in a position to realize substantial savings at its next renewal.

Critically, the company now has a clear example of the effectiveness of best practices in Software Asset Management (SAM) in preventing SaaS costs from spiraling out of control.

The Challenge

With dozens of entities and a vest network of dealerships, the North American arm of this automotive company has an extensive and complex IT landscape. At a time when it is investing heavily in the development of electric vehicles (EVs), it is vital that the company strategically pursues new efficiencies and cost savings across its wider business operations. Part of this initiative involves an increased reliance on SaaS-based solutions, offering ease of deployment, scalability, and promising cost advantages. Despite this, the company identified potential cost escalation for one of its SaaS providers, Cornerstone OnDemand. Product managers were being approached almost daily by the SaaS provider’s sales team, indicating that they needed additional software license purchases, citing usage exceeding entitlement, leading to unforeseen costs. Faced with this issue, the organization needed to quickly determine employee usage of the Cornerstone learning management platform.

In addition, the company needed a better understanding of its software licensing metrics to establish if and how unused licenses could be reassigned. While the company has a robust approach to Software Asset Management (SAM), its SaaS contracts were managed solely by its procurement team, leaving the SAM and product teams in the dark about its entitlement and the optimum way to provision licenses.

The automotive company also recognized that with more accurate data at its disposal, it could negotiate more favorable terms at its next renewal, scheduled for 2025. Finally, it saw an opportunity to improve processes and governance around the way employees access the training platform as well as other solutions to reach SaaS cost management success.

The Solution

Anglepoint has been this company’s SAM partner of record since early 2022, when it was selected to provide multi-year managed services, covering all top tier publisher relationships. With a deep understanding of the client’s IT environment and proven experience optimizing SaaS deployments, the Anglepoint team was ideally placed to lead this investigation to achieve SaaS cost management success.

As an initial step, Anglepoint was granted access to the client’s Cornerstone admin console, where they could get a better understanding of consumption. The data showed that only 50 percent of purchased licenses had been used in the previous 12 months, with a large portion never having been used at all. In addition, while there were 37,000 accounts created, 24,000 were duplicates, with only 13,000 unique users registered to use the learning management platform. Furthermore, the company has configured its Workday solution to automatically feed into the Cornerstone platform, further inflating the number of users.

With this visibility, Anglepoint worked with the client to decommission unused and duplicate accounts, bringing usage levels below the contracted terms with no fear of exceeding the threshold during the remaining contract period. This generated immediate cost savings of $64,000.

Once the immediate risk was mitigated, Anglepoint began to implement a series of longer-term improvements to help further optimize the client’s Cornerstone deployments. These included:

  • An accurate forecast of software licensing requirements ahead of the client’s Cornerstone renewal in 2025; this will save the client a further $604,000.
  • A deep dive into its contract terms, so the client understands all the risks faced and how to remediate them.
  • Closer alignment between the product, SAM, and procurement teams, so purchasing decisions and deployments are aligned to the same set of objectives.
  • New policies and stricter governance around how new users are added to the Cornerstone platform. More robust processes provide the client with extra control but still ensure employees can access the training they need.
  • A new license reprovisioning strategy. While it is standard practice to reprovision unused SaaS licenses after 90 days, in this instance, Anglepoint’s advised the client to take a more conservative approach, only deprovisioning or reassigning licenses for accounts that had been dormant for a year or more, as much of the training is only needed on an annual or sporadic basis.
RESULTS

Immediate cost savings: By right-sizing its licenses to below the threshold stipulated in the Cornerstone contract, Anglepoint delivered SaaS cost management success with immediate cost savings of $64,000.

More accurate forecasting will deliver further savings: With greater visibility into its Cornerstone usage, the client is set to reduce its costs by an additional $604,000 at the next renewal.

Enhanced collaboration: The client’s SAM team and product owners now work in close collaboration with procurement to ensure SaaS contracts reflect their needs.

Stronger processes and governance allow the client to keep constant control over its usage and costs.

Blueprint to optimize all SaaS deployments: This project provides a template which can be followed to optimize other SaaS deployments across the organization, reducing its overall exposure to risk.

Software Asset Management is now a strategic priority: Senior leaders now have better visibility into the value delivered by a strategic SAM program.

SaaS contracts were managed solely by the procurement team, leaving the SAM and product teams in the dark about their entitlement and the optimum way to provision licenses. They needed a better understanding of their software licensing metrics to reassign unused licenses.

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