Contributing authors: Vinay Patel, Bernard Williams, Jocel Siglos
Introduction
The adoption of Software-as-a-Service (SaaS) solutions has surged across every sector, offering flexibility, scalability, and ease of use. However, the resulting sprawl of decentralized SaaS usage has introduced new challenges. Many of the organizations we have worked with struggle with visibility, security, compliance, and cost control. To help address these issues, we have developed the SaaS Governance Maturity Model (SGMM), it's a strategic framework designed to help organizations assess their current SaaS management practices and map a path toward smarter governance. While there are many models available in the market space for teams to use, our SGMM takes a streamlined approach intended for proactive leaders who are not bound by the bureaucracy that typically hinders larger organizations.
Why SaaS Governance is Crucial
As SaaS applications multiply, so do the risks associated with unmanaged environments. If you have seen some of our recent content, then you know that Shadow IT becomes a significant issue when departments procure software outside of organizational processes and controls. Compliance risks also rise due to a lack of visibility into data residency, access, and usage. Additionally, organizations often encounter wasted spend from redundant licenses and unused subscriptions. In fact, studies show that up to 30% of SaaS licenses go unused, representing a major area of preventable loss.SaaS governance brings structure, policy, and accountability to software adoption. It does not take a lot to see how appropriate use of SaaS governance helps organizations protect data, optimize costs, and maintain agility.
What is the OIC SaaS Governance Maturity Model (SGMM)?
The OIC SGMM is a framework that outlines progressive stages of SaaS management capability. It guides CIOs, IT leaders, procurement, and security teams through the evolution from ad hoc tool use to strategic SaaS optimization. The model enables organizations with a clear path to benchmark their current maturity level, identify governance gaps, and prioritize initiatives and technology investments.Equally important is communicating to the broader team why SaaS governance matters highlighting how it protects the organization, reduces risk, and maximizes the value of every SaaS investment.
The Levels of SaaS Governance Maturity
The levels of the maturity model framework are outlined below.SaaS Governance Maturity Model—a four-level framework that charts the path from chaos to optimization.
Level 1: Chaotic
Priority: Gain visibility into your existing SaaS landscape and identify unmanaged or redundant tools
At this initial stage, there is no formal governance or oversight of SaaS applications. Departments or individual employees independently purchase tools, often without IT involvement. The result? A tangled web of shadow IT, redundant subscriptions, and unknown security vulnerabilities. Costs spiral without accountability, and compliance risks go undetected.
Level 2: Emerging
Priority: Build foundational processes, assign ownership, and establish centralized tracking for spend and usage.
Organizations in the Emerging stage are beginning to realize the need for governance. Some policies and controls may be in place, but they are reactive and inconsistent. Teams might track spend or access manually, and there’s limited collaboration between IT, finance, and business units. While awareness is growing, efforts to control SaaS are often siloed and lack enforcement.
Level 3: Managed
Priority: Strengthen automation, enforce policy adherence, and optimize licensing based on real-time usage.Governance becomes structured and proactive at this stage. The organization implements defined policies for SaaS acquisition, security, and compliance. Tools are used to monitor spend, manage access, and ensure vendor compliance. IT, procurement, and legal departments work in tandem to enforce standards and eliminate risk. Cost optimization and policy enforcement are now routine.
Level 4: Optimized
Priority: Leverage analytics and automation to continuously improve SaaS performance, security, and alignment with strategy.
In the final stage, SaaS governance is a strategic function aligned with broader business goals. Governance processes are fully automated, and data flows seamlessly across departments. Real-time dashboards, AI-driven insights, and predictive analytics guide decisions. Every SaaS investment is measured for ROI, compliance, and impact; turning governance into a competitive advantage.
Conclusion
SaaS is a necessary part of any business in today's economy and the use of it will continue to proliferate for the foreseeable future. SaaS Governance is about how to capitalize on the capabilities of SaaS while minimizing the risks, and reducing the amount of spend required to realize true value. SaaS doesn’t need to be a source of risk or inefficiency. With the right governance model, it becomes a powerful enabler of agility, innovation, and growth. By understanding where your organization stands within this maturity model, you can take meaningful steps toward controlling spend, reducing risk, and maximizing value.The OIC SaaS Governance Maturity Model provides a roadmap to help organizations transition from chaotic SaaS sprawl to strategic enablement. Whether you're at the beginning of your journey or refining advanced processes, SGMM offers the clarity and structure needed to govern with confidence. Now is the time to evaluate where you stand and take the next step toward smarter SaaS management.
Now’s the time to ask: What level of SaaS governance are we operating at—and where do we need to go next?
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