Onboarding New Apps: How to Vet and Manage SaaS Risk

In today's fast-paced business environment, the adoption of new SaaS applications is essential for driving innovation, enhancing productivity, and staying competitive. However, onboarding new apps also introduces potential risks, including data breaches, compliance violations, and operational inefficiencies. Without a structured approach to vetting and managing SaaS risks, your organization could be exposing itself to vulnerabilities that outweigh the benefits of these tools.

Properly vetting SaaS vendors and managing associated risks should be a priority for IT teams, compliance officers, and business leaders. In this blog, we’ll explore the steps to ensure secure onboarding of new SaaS applications while maintaining compliance and minimizing risks to your organization.

Why Managing SaaS Risk Matters

As businesses increasingly rely on SaaS applications for critical functions like communication, collaboration, and data management, the stakes for ensuring these platforms are secure and compliant have never been higher. SaaS platforms often handle sensitive company data, customer information, and intellectual property, making them attractive targets for cyberattacks.

Additionally, poorly managed SaaS adoption can lead to:

• Shadow IT: Employees using unauthorized apps that bypass security policies.

• Compliance Violations: Failure to meet regulations like GDPR, HIPAA, or SOC 2 due to vendor mismanagement.

• Cost Overruns: Redundant or unused subscriptions adding unnecessary expenses.

To address these challenges, organizations need a rigorous vetting process and a robust risk management strategy for onboarding new apps.

How to Vet SaaS Apps Before Onboarding

The first step to managing SaaS risks is ensuring that every new application meets your organization’s security, compliance, and performance standards. Here’s how to vet SaaS vendors effectively:

Assess Vendor Security Practices

Before onboarding any app, evaluate the vendor's security measures. Ask the vendor for documentation about their security protocols, certifications, and incident response plans. Key areas to review include:

• Encryption Standards: Ensure data is encrypted both in transit and at rest.

• Authentication: Check for support for multi-factor authentication (MFA) and single sign-on (SSO).

• Data Residency: Confirm where your data will be stored and whether it aligns with regulatory requirements.

• Incident Response: Ensure the vendor has a plan for detecting and responding to security incidents.

Evaluate Compliance and Certifications

If your organization is subject to specific regulations like GDPR, HIPAA, or PCI DSS, verify that the SaaS vendor complies with these standards. Look for certifications such as:

• SOC 2 Type II

• ISO/IEC 27001

• HIPAA Compliance (for healthcare organizations)

Request a copy of the vendor’s audit reports and confirm that their practices align with your compliance requirements.

Review Data Ownership and Retention Policies

Understand how the vendor handles data ownership, retention, and deletion. Ensure the terms of service specify that your organization retains full ownership of its data and that the vendor will delete or transfer data securely upon termination of the contract.

Evaluate Uptime and Performance Guarantees

Ask for a copy of the vendor’s SLA (Service Level Agreement) to ensure they can meet your performance and uptime expectations. Look for metrics like:

• Guaranteed uptime percentages (e.g., 99.9%).

• Support response times.

• Penalties for failing to meet SLA requirements.

Check for Integration Compatibility

Determine whether the SaaS app integrates seamlessly with your existing tools and systems. Poor integration can lead to data silos and inefficiencies, so confirm API availability and compatibility with your current tech stack.

Risk Management Strategies for SaaS Onboarding

Once a SaaS app has passed the vetting process, it’s time to implement risk management strategies to ensure its secure and effective use.

1. Establish a SaaS Onboarding Workflow

Create a standardized workflow for onboarding new SaaS apps. This should include:

• Submitting app requests through IT or a dedicated SaaS administrator.

• Conducting security and compliance evaluations.

• Obtaining approvals from relevant stakeholders.

• Assigning ownership for app management and maintenance.

A well-defined onboarding process helps prevent shadow IT and ensures all apps are vetted properly before use.

2. Implement Role-Based Access Controls (RBAC)

Not every user needs full access to all features or data within a SaaS app. Use RBAC to limit permissions based on roles and responsibilities, minimizing the risk of accidental data exposure or unauthorized access.

3. Monitor Usage and Costs

Leverage a SaaS management platform to track app usage and ensure you’re getting value from your subscriptions. Platforms like Torii, Lurel, and BetterCloud provide insights into:

• Which users are actively using the app.

• How frequently the app is accessed.

• Unused licenses that can be canceled to reduce costs.

4. Educate Employees on SaaS Security

Employees are often the first line of defense in SaaS security. Conduct training sessions to educate them on:

• Recognizing phishing attempts.

• Using strong passwords and enabling MFA.

• Reporting suspicious activity or potential breaches.

By creating a security-conscious culture, you can minimize human error and reduce SaaS-related risks.

5. Conduct Regular Security Audits

Even after onboarding, SaaS apps should be reviewed periodically to ensure they continue to meet your security and compliance standards. Conduct annual security audits to identify any new risks or vulnerabilities introduced by software updates or changes in vendor practices.

Tools to Help Manage SaaS Risks

Managing SaaS risks requires the right tools to streamline processes and maintain visibility. Here are some tools that can enhance your risk management efforts:

1. Torii: Helps detect shadow IT, manage subscriptions, and track usage metrics.

2. BetterCloud: Focuses on SaaS governance, providing automated workflows for access management and data security.

3. Lurel: Offers robust SaaS management capabilities, including app discovery, compliance tracking, and cost optimization.

4. Okta: Provides SSO, MFA, and access management to secure SaaS apps.

5. Microsoft Defender for Cloud Apps: Offers real-time monitoring and insights into SaaS usage and potential risks.

Conclusion: A Proactive Approach to SaaS Risk Management

Onboarding new SaaS apps can empower your organization with innovative tools and capabilities, but it’s essential to approach the process with caution. Without proper vetting and risk management, SaaS apps can expose your business to security vulnerabilities, compliance issues, and financial waste.

By implementing a structured onboarding process, vetting vendors thoroughly, and using tools to manage and monitor risks, you can strike the right balance between innovation and security. This proactive approach not only protects your organization but also ensures that your SaaS investments deliver maximum value.

Ready to strengthen your SaaS onboarding process? Start by auditing your current SaaS portfolio, creating an onboarding workflow, and prioritizing security and compliance evaluations for every new app you adopt.