Recognize SaaS Sprawl

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This week’s newsletter unpacks the challenge of SaaS application sprawl. The consequences of not taking action are significant. Why? Because about one-third of SaaS software spending is underutilized or wasted, according to Flexera's State of ITAM 2022 report.

Our own experience validates this number. After an internal audit, we were able to cut our SaaS spending by one-third. How? By following these steps. DIY or we can guide you through the process.

Winback Control

SaaS application sprawl is not just a big company problem. A typical company uses around 254 SaaS applications. While large enterprises skew this number, smaller companies are not immune to the problem.

In fact, our research suggests the problem exists for businesses with more than $5M in sales. Read SAAS application sprawl to learn why the high cost of doing nothing is bigger than you think.

Use this approach to save money and increase the productivity per dollar of SaaS spend.

Grasp the Problem

The problem typically occurs when departments or individual employees independently adopt cloud-based applications without centralized oversight. This lack of coordination often leads to redundant applications, underutilized resources, and difficulties in data integration and compliance.

Develop a Strategy

The first step to combat sprawl is developing a strategy. It starts by assessing the existing SaaS landscape, identifying redundant or unnecessary applications, and understanding the needs of different departments. An audit can provide the clear picture you need.

Apply Governance

Next, put together a cross-functional team, typically led by IT but includes folks from various departments, to ensure that SaaS adoption aligns with the strategy. This team should develop and enforce policies for the procurement, deployment, and usage of SaaS applications.

Communicate and Collaborate

You need to foster a culture for departments to share their needs and experiences with different applications. This collaborative approach helps in identifying overlapping functionalities and encourages the adoption of shared solutions.

Emphasize Data Security and Compliance

All SaaS tools should meet the company’s security standards and comply with relevant regulations. Regular security assessments and compliance audits are essential to mitigate risks associated with SaaS sprawl. Without such a process, you may have hidden vulnerabilities.

Bank Savings or Reallocate Resources

You can achieve significant cost savings by eliminating redundant applications and renegotiating contracts. A more streamlined SaaS portfolio makes managing licenses and subscriptions easier. You get time back to spend on bigger priorities.

Want Help?

Our strategy consulting practice can guide you through this process. Learn more by booking a strategy call.

Wrap Up

Our weekly newsletter is packed with helpful, practical nuggets. Want to catch up on earlier issues? Explore the archive here.

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