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SaaS Management

SaaS Sprawl: How to Overcome the Challenges and Save Money

July 29, 2020

application sprawl

How we use software has changed a great deal over the years.

One major change is how software-as-a-service (SaaS) has evolved to become the standard application delivery in addition to enhancing both employee productivity and satisfaction.

While the use of SaaS applications has a long list of benefits, like faster time to value, reduced vendor lock-in, and enhanced scalability, collaboration, and accessibility, it is brought with various challenges on how to manage all these tools, known as SaaS application sprawl.

Before companies utilized SaaS, the use of on-premise applications was a centralized process that consisted of:

  • A shortlist of vendors
  • Negotiating a contract
  • Obtaining the software
  • Working with Systems Integrators and implementation partners to configure the software
  • Getting the IT department to roll out the application to all employees

This method had various shortcomings and wasn’t effective for all employees. For instance, if the application wasn’t critical to their daily workflow, they were still expected to use it, which could cause a loss of productivity and morale. If they weren’t expected to use the application, it would lead to dead investment for the company after time and money were spent integrating and rolling out the application.

Thanks to companies implementing SaaS migration, a bottoms-up adoption of workplace software became more common, creating a better and more productive workflow. Despite the advantages, one key disadvantage that companies often face is application sprawl.

Let’s dive into these challenges and how G2 Track can help.

Challenges of managing SaaS application sprawl

When businesses face SaaS application sprawl, three areas within the organization typically feel the weight of the challenges that it can present.

The IT department

The increase in SaaS applications hasn’t changed the role of a company’s IT department as they’re still tasked with delivering the applications to the employees who need it most while doing so in a secure and compliant manner.

However, an IT department can be ill-equipped to handle the challenges that go hand-in-hand with SaaS adoption, and they can find themselves in the dark about the applications that their own employees are using, which leads to shadow IT.

Not only does application sprawl result in little visibility into their own company’s tech stack, but also how these applications are being used and who is using them. When the majority of applications are outside of IT realms of knowledge, it makes it harder to deliver the applications that employees both want and need the most.

Application sprawl and shadow IT can also lead to:

  • Data loss or a data breach
  • Inefficient collaboration amongst teams
  • Compliance concerns
  • Bandwidth limitations
  • Wasted budget spend on SaaS applications

The finance department

When the finance department within your company lacks true visibility into its own SaaS tech stack, it means that the team will almost always fly blindly when it comes to reigning in the cost and reducing the financial impact of SaaS application sprawl.

At many companies, SaaS spend management can be difficult as spending on SaaS applications can run rampant until someone discovers a trend of inefficient spending. Such inefficiency can be:

  • Overlapping software subscriptions
  • Different teams using different software that offers the same features
  • Paying for more features than what is needed
  • Buying SaaS applications before they’re needed

When a company experiences application sprawl, it’s likely the finance team will find that multiple subscriptions are being paid for that do the same thing. In order to consolidate and reduce software waste, they’ll need to find what isn’t being used and any duplicate subscriptions within their tech stack.

$40 billion

is estimated to be spent on unused software each year.

Source: G2 Track

Executive company stakeholders

Having clear visibility into the ROI in SaaS applications is key for executive leadership and procurements teams in any organization. However, application sprawl and a lack of visibility into what applications are being used make this incredibly difficult

Questions surrounding cost, renewal information, user adoption, application utilization, and how investments are really paying off become almost impossible. This becomes even more challenging as an organization's tech stack grows. The more SaaS applications a company uses, the less visibility these stakeholders will have into what is actually being used, making it harder to justify ROI when negotiating contracts and buying new tools.

How G2 Track can solve SaaS application sprawl

Thankfully, G2 Track is your one-stop-shop to solving the pitfalls that SaaS application sprawl can cause within your organization.

Visibility

G2 Track utilizes single sign-on (SSO) to help companies understand and where they are in regards to every application within their tech stack, from how many there are to how they’re being used. It’s not uncommon for companies to vastly underestimate how many applications their teams are using.

Having this clear picture is a huge benefit to the IT department. As an example, if there’s an application that only half the company is using, this will be shown in the easy-to-read dashboard.

“G2 Track was able to solve SaaS sprawl management, shadow IT, and contract management, while helping the finance and technical teams speak the same language.”

G2 Track Review

Utilization

In addition to crystal clear visibility into how many apps your company is using, G2 Track provides data into how employees are using these tools – and how often.

Having this data helps businesses and ROI teams to understand if they are over-contracting for a product that isn’t being used. It can also answer questions like:

  • Are we paying for more seats that not enough employees are using?
  • Is this contract worth renewing?
  • Can we negotiate a contract with better terms to save money?
  • Is this tool thought of as “must-have” to our employees?

One way that G2 Track provides you access to this information is through user sentiment data, which allows you to know exactly how your team feels about each software application and whether or not it’s worth keeping and spending money on.

With G2 Track, you’ll not only have a better glimpse into your portfolio but become more efficient into how your budget is being spent.

Duplicate spend

If there’s a way that your company can consolidate your tech stack -- G2 Track will show you.

For instance, you’ll be able to see if your marketing team is using one application as their e-signature software solution while your sales team is using something totally different.

With the world’s largest category of software products at your fingertips, G2 Track can easily identify which products are overlapping in terms of features and functionality and provide your company with various opportunities to consolidate your stack, save money, and reduce application sprawl.

Departmental allocation

Departmental allocation can be especially beneficial and valuable to finance teams as they understand if there are cost centers within their company.

For example, G2 Track will allow you to identify if there is an application that is meant to be used by the entire company, but in reality is only being used within a certain department. Some applications are tied to a specific department while others aren’t. Having this data gives the finance team a better grasp into which teams are using which application, and even who on the team is logging in the most. When you have access to this data, you can make smarter budgeting decisions.

There’s an app for that

It’s easy for your company to experience SaaS application sprawl when your tech stack grows out of your control. Eliminate the growing pains that come with a growing business, and a growing stack, when you work toward solving SaaS application sprawl with G2 Track.

Looking for even more ways to save money? Take advantage of our free tech spend analysis to audit your software costs and license usage with a customized savings report.

Manage your software costs with G2 Track.