Data Governance and SaaS: What is It, Why is It Crucial?

Updated August 04th, 2023
SaaS data governance

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The past decade has witnessed an unprecedented surge in Software-as-a-Service (SaaS) adoption, revolutionizing the way organizations operate and manage their software solutions. This trend only accelerated during the pandemic of 2020, as businesses sought cloud-based alternatives to facilitate remote work. However, this meteoric rise in SaaS adoption has brought forth new challenges, particularly in managing and governing the ever-expanding SaaS ecosystem.

In this context, the relationship between data governance and SaaS has become paramount in ensuring organizational efficiency, cost optimization, and risk mitigation. Let us start the discussion by understanding the need for Saas governance.

Table of contents

  1. The need for SaaS governance
  2. Relationship between data governance and SaaS
  3. Data governance for SaaS
  4. SaaS governance strategy
  5. Who manages the data with SaaS?
  6. Summary
  7. Related reads

The need for SaaS governance

The rise of individual SaaS expensing within organizations has led to a sprawling and uncoordinated SaaS landscape. SaaS governance has emerged as the solution to these challenges, encompassing the processes, policies, and frameworks to manage and optimize the SaaS portfolio. At its core, SaaS governance aims to establish centralized control over SaaS usage while empowering business units to make informed decisions.

What is the relationship between data governance and SaaS?

Data governance and SaaS governance share a symbiotic relationship, as data plays a pivotal role in the success of any SaaS implementation.

Let’s explore how data governance influences the various aspects of SaaS management:

  1. Data quality and integration
  2. Data security and compliance
  3. Cost optimization
  4. Collaboration and data sharing
  5. Risk management

Let us understand them in detail:

1. Data quality and integration


Data governance ensures that data is accurate, consistent, and reliable across the organization. When different departments adopt their SaaS solutions, maintaining data quality and ensuring smooth data integration becomes challenging. A robust data governance framework bridges this gap, promoting seamless data flow and informed decision-making.

2. Data security and compliance


The decentralized nature of SaaS adoption can expose organizations to potential security risks and compliance breaches. Data governance establishes data protection measures, access controls, and compliance protocols to safeguard sensitive information, ensuring that SaaS solutions adhere to regulatory requirements.

3. Cost optimization


The widespread adoption of SaaS solutions can lead to “shadow IT,” where multiple redundant subscriptions drive up costs unnecessarily. Data governance provides visibility into SaaS usage and spending, enabling organizations to identify cost-saving opportunities and rationalize their SaaS portfolio.

4. Collaboration and data sharing


Data governance fosters a data-driven culture of collaboration, breaking down data silos that may emerge from disparate SaaS implementations. It encourages data sharing and promotes a unified approach to data management across the organization.

5. Risk management


SaaS solutions may vary in terms of security and reliability. Data governance helps organizations assess the risks associated with different SaaS providers and select solutions that align with the organization’s risk tolerance and security standards.

By leveraging data governance principles, organizations can maintain data quality, optimize costs, enhance security, and foster collaboration, thereby ensuring that the SaaS ecosystem contributes positively to organizational growth and resilience. Embracing this nexus between data governance and SaaS will be critical in staying ahead in the dynamic landscape of modern business operations.

What is data governance for the SaaS application?

Data governance for SaaS applications refers to the set of policies, processes, and controls put in place to manage and ensure the proper use, security, and integrity of data within the context of Software-as-a-Service (SaaS) solutions. As organizations increasingly rely on cloud-based applications to run their operations, data governance for SaaS becomes essential to maintain data quality, protect sensitive information, comply with regulations, and optimize the overall efficiency and effectiveness of SaaS implementations.

Here is a detailed explanation of data governance for SaaS applications:

  1. Data quality assurance
  2. Data security and privacy
  3. Regulatory compliance
  4. Data integration and interoperability
  5. Data ownership and accountability
  6. Data retention and archiving
  7. Data analytics and reporting
  8. Vendor management

Let us understand each of them in detail:

1. Data quality assurance


Data governance for SaaS involves establishing standards for data quality, and ensuring that data entered, stored, and processed within SaaS applications is accurate, consistent, and reliable. It includes defining data validation rules, data cleansing procedures, and data integration guidelines to prevent discrepancies and inconsistencies in data across different SaaS solutions.

2. Data security and privacy


SaaS applications often store sensitive and confidential information. Data governance ensures that appropriate security measures are in place to protect this data from unauthorized access, data breaches, and cyber threats. It involves implementing role-based access controls, encryption, and multi-factor authentication to safeguard data confidentiality and integrity.

3. Regulatory compliance


Many industries and regions have data protection and privacy regulations that organizations must comply with, such as GDPR, CCPA, or HIPAA. Data governance for SaaS applications ensures that the handling of data within these applications aligns with regulatory requirements. It involves monitoring data access, auditing data usage, and maintaining compliance documentation.

4. Data integration and interoperability


Organizations often use multiple SaaS applications to support different functions, and data governance ensures that these applications can seamlessly exchange data. It involves establishing data integration standards, using application programming interfaces (APIs), and facilitating data flow between SaaS solutions while maintaining data consistency.

5. Data ownership and accountability


Data governance for SaaS clarifies data ownership and defines accountability for data stewardship. It specifies roles and responsibilities for individuals responsible for managing data within SaaS applications and ensures that data is used appropriately and ethically.

6. Data retention and archiving


SaaS applications may generate large volumes of data, and data governance includes defining policies for data retention and archiving. Organizations need to determine how long data should be stored within SaaS applications and how it should be archived or deleted when no longer needed.

7. Data analytics and reporting


Data governance facilitates the use of data from SaaS applications for analytics and reporting purposes. It involves providing access to data in a controlled manner to authorized users and ensuring that analytics and reports are based on accurate and reliable data.

8. Vendor management


Data governance for SaaS involves evaluating the data handling practices of SaaS vendors and assessing their security and compliance measures. Organizations must ensure that SaaS vendors align with their data governance requirements and adhere to the organization’s data protection and privacy standards.

In summary, data governance for SaaS applications encompasses all the necessary measures to ensure data quality, security, compliance, and efficiency within the context of cloud-based software solutions. By implementing robust data governance practices, organizations can harness the full potential of SaaS applications while safeguarding sensitive information and maintaining data integrity.

What is the SaaS governance strategy?

SaaS governance strategy is a framework and approach that organizations adopt to effectively manage and optimize their Software-as-a-Service (SaaS) applications. It involves defining policies, processes, and guidelines to ensure that SaaS usage aligns with the organization’s goals, enhances operational efficiency, and mitigates potential risks.

Here are the key components of a SaaS governance strategy:

  1. Inventory and assessment
  2. Vendor management
  3. Data governance integration
  4. Centralized control and decentralized decision-making
  5. Data backup and recovery
  6. Periodic reviews and audits
  7. Exit strategy
  8. Continuous improvement

Let us understand each of them in detail:

1. Inventory and assessment


Begin by creating an inventory of all SaaS applications used across the organization. Assess each application’s relevance, value, and alignment with business objectives. This assessment helps identify redundant or underutilized SaaS solutions, enabling cost optimization and rationalization.

2. Vendor management


Establish criteria for evaluating SaaS vendors and their offerings. This includes assessing their security measures, data handling practices, and compliance with relevant regulations. Select vendors that meet the organization’s data governance and security requirements.

3. Data governance integration


Integrate data governance principles into the SaaS governance strategy. Ensure that data quality, security, and privacy measures are applied consistently across all SaaS applications. Data ownership, access controls, and data lifecycle management should be clearly defined.

4. Centralized control and decentralized decision-making


Strike a balance between centralized control and decentralized decision-making. While central IT may retain oversight for security and compliance, empower individual business units to choose SaaS solutions that best suit their needs, within the defined governance framework.

5. Data backup and recovery


Establish policies for data backup and recovery for critical SaaS applications. Ensure that data is backed up regularly to prevent data loss in the event of an outage or system failure.

6. Periodic reviews and audits


Conduct regular reviews and audits of SaaS applications and their adherence to the governance strategy. Identify areas for improvement and update the strategy based on changing business needs and technology advancements.

7. Exit strategy


Plan for the orderly transition or decommissioning of SaaS applications when necessary. Define procedures for data extraction and vendor contract termination to minimize disruption during the process.

8. Continuous improvement


SaaS governance is an ongoing process. Encourage feedback from users and stakeholders, and continuously improve the strategy to adapt to evolving business requirements and technological advancements.

In conclusion, a SaaS governance strategy provides a structured approach to managing the ever-growing SaaS ecosystem effectively. It ensures that SaaS usage aligns with organizational objectives, data is handled securely, costs are optimized, and risks are mitigated. By implementing a robust SaaS governance strategy, organizations can maximize the benefits of SaaS applications while maintaining control and efficiency across their cloud-based software landscape.

Who manages the data with SaaS?

In a Software-as-a-Service (SaaS) model, the responsibility for managing the data can vary depending on the type of SaaS application and the agreement between the SaaS provider and the customer (organization or individual using the SaaS service).

Generally, there are two main entities involved in managing the data with SaaS:

1. SaaS provider


The SaaS provider is the company or organization that develops and offers the SaaS application to customers. They are responsible for hosting, maintaining, and managing the underlying infrastructure and software that runs the SaaS application. This includes managing servers, databases, security protocols, and software updates.

  • Data security: The SaaS provider is responsible for implementing security measures to protect customer data stored within the SaaS application. This includes encryption, access controls, firewalls, and other security protocols.
  • Data backups: It is the responsibility of the SaaS provider to regularly back up customer data to prevent data loss in case of system failures or data corruption.
  • Data availability: The SaaS provider ensures that the SaaS application is accessible and available to customers as per the agreed-upon service level agreements (SLAs).

2. Customer (Data Owner/User)


The customer of the SaaS application, also known as the data owner or user, is responsible for managing and controlling the data entered into the SaaS application. This includes the data specific to their business or organization, such as customer information, transaction records, and other relevant data.

  • Data input and usage: Customers are responsible for inputting and managing their data within the SaaS application, using the provided features and functionalities.
  • Data access control: Customers can control who within their organization has access to the SaaS application and specific data within it. They can assign roles and permissions to users to restrict access to sensitive information.
  • Data compliance: The customer is responsible for ensuring that the data they input and manage within the SaaS application complies with relevant laws and regulations.

Summarizing it all together

The SaaS revolution has undoubtedly empowered organizations with greater flexibility and agility in software adoption. However, it has also brought challenges that demand attention. SaaS governance, closely intertwined with data governance, provides the framework needed to navigate this new era of decentralized SaaS usage effectively

In summary, the SaaS provider manages the underlying infrastructure, security, and availability of the SaaS application, while the customer (data owner/user) is responsible for managing and controlling the data specific to their business or organization within the SaaS application.

The division of responsibilities is typically outlined in the SaaS provider’s terms of service or service level agreements (SLAs). It’s crucial for customers to understand their role and the responsibilities of the SaaS provider to ensure secure and compliant use of the SaaS application.

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