Strategies to Prevent and Manage SaaS Sprawl

Without a centralized SaaS management strategy, every scaling company will inevitably encounter SaaS sprawl. As different teams work to complete everyday tasks, signing up for free trials and duplicate solutions, costs climb up and operational inefficiencies creep in.

In this article, we look at the strategies you can implement to prevent and manage SaaS sprawl. We also look at Vendr: a solution that lets you centralize procurement data, create streamlined approval workflows, and identify opportunities to reduce costs.  

‍

Cut SaaS sprawl

Vendr centralizes your procurement process—saving you time and money.

Sign up for free

‍

Understanding SaaS sprawl

SaaS sprawl is when teams end up with unnecessary software due to uncontrolled spending with little oversight or management from procurement and IT departments. 

It happens when individuals or teams within an organization start buying a variety of different software tools to meet their needs without coordinating with others or considering the broader implications for the organization as a whole. 

Causes of SaaS sprawl

SaaS sprawl can be caused by a number of issues including:

• Decentralized control over SaaS procurement
• Unsuitable approval workflows for new SaaS solutions 
• Limited IT oversight of departments and users
• Increasing popularity and accessibility of SaaS
• Poor internal communication regarding software needs
• Lack of awareness around existing software
• Mismanaged licenses or ‘seats’ for existing software
• No control over free trials and renewals
• Unsuitability of existing systems

Challenges posed by SaaS sprawl 

Saas sprawl often means companies end up with multiple unapproved, redundant, or improperly integrated applications. This is expensive and can slow employees down day-to-day, as they struggle to navigate a variety of different solutions. 

With multiple unmonitored tools, data security and compliance concerns also increase. Since the IT department lacks visibility into the full range of applications used, it can be difficult to manage and enforce consistent SaaS security measures across the organization. Meanwhile, unapproved tools might not adhere to necessary compliance standards, such as GDPR or HIPAA. 

{{cta1}}

Consequences of SaaS sprawl

Let’s take a close look at exactly how SaaS sprawl can damage your bottom line, efficiency, and team.

Redundant subscriptions and underutilized tools

Improper management of SaaS applications leads to duplicated services, unnecessary licensing fees, and underutilized tools. Two people from the same team can be using different tools without realizing they offer the same functionality. 

You’ve probably heard of "Shadow IT." The term refers to rogue apps that cost money without oversight from dedicated IT teams. This wastes resources and leads to duplicate software performing similar tasks at twice the cost.

It’s not all on individual employees and unnecessary apps though. Without close management, companies end up with unused or underutilized licenses for core software. 

Operational inefficiencies and unintegrated SaaS tools

Picture this: John in accounts receivable has chosen new software to streamline his books, meanwhile Simone in accounts payable is sticking to her favorite expense platform. What are the chances they integrate perfectly to properly manage cash flow?

Different departments using varying applications lead to duplicate work, more admin, and operational inefficiency. With tools that aren’t integrated, there’s also no guarantee of unified data so errors can easily creep in. 

Security risks due to unvetted applications

Without proper IT oversight and security measures, SaaS sprawl means systems can also be unsecured or shared with unauthorized people. This increases susceptibility to cybercrime like ransomware or phishing and makes it difficult for you to stay compliant.

Strategies to prevent and manage SaaS sprawl

Tackling SaaS sprawl often means rethinking how you procure and manage software within your organization and ensuring that everything happens from a single solution. Here we take a closer look at how you can do this. 

Centralize SaaS management

By bringing your SaaS procurement and management into one platform, you can maintain a clear overview of which tools are being used, by who, and for which purpose. 

This means you can streamline approvals if you spot a solution your team actually needs and reduce costs if someone requests an unnecessary purchase. You can also manage real-time data in the same solution to track SaaS spend and optimize budget allocation.

Vendr’s supplier management tools allow you to create a single source of truth for software procurement. Collect and manage all supplier agreements and analyze spend to assess the value of tools against SaaS usage data—all from one place.

You can also assess all contracts, manage subscriptions, and track phantom spend. For example, cases where your staff signs up for a free trial and then forgets about the software.

Conduct regular SaaS audits

By conducting a SaaS audit, where you inventory all tools currently in use across the organization, you gain insight into your current SaaS stack, costs, and value. Here’s how to conduct an audit: 

• Catalog all tools including free trials
• Rate the effectiveness of each tool by gathering feedback from users
• Assess the costs (you can use insights from Vendr to work out whether you are paying a fair price, but more on this later) 
• Audit external partners and contractors 

Implement a SaaS procurement policy

By introducing a set of guidelines and procedures for your team to follow before acquiring new SaaS tools, you can ensure all purchases are aligned with business goals and keep costs down. 

Use Vendr to create structured approval workflows that make it easy for your team to submit requests for new software. You can then follow a standardized vetting process to assess new tools. This can include checking security, assessing spend, and reviewing suppliers against your existing solutions. 

Meanwhile, your team can submit unlimited requests with parallel approvals. Our solution lets you streamline communication between teams by ensuring all SaaS conversations happen in one place. 

Leverage Vendr for SaaS optimization

Vendr helps you get a fair price on all SaaS procurements. This means you can purchase exactly the seats you need and your team won’t need to purchase other software for the same use cases. 

With our intelligence, you can access expert insights on demand, leverage pricing benchmarks from users, and receive strategic negotiation recommendations on SaaS quotes.   

Combine this with tools for structured workflows and standardized approvals and you have an easy way to optimize the entire procurement process. 

LocalizeOS saved over $131K by using Vendr. Here’s what Ehud Tzadok, VP of Finance had to say: “I am amazed. With the right approach and Vendr’s solution and data, you’ll get the best results available for your team to optimize workflows and run efficiently.”

Controlling SaaS sprawl 

Implementing effective strategies to control SaaS sprawl is essential for maintaining operational efficiency, security, and cost-effectiveness. 

By centralizing SaaS management, conducting regular audits, and implementing a robust procurement policy, you can significantly mitigate the risks associated with unmanaged software proliferation.

Centralizing your SaaS procurement and management into a single platform like Vendr provides a clear overview of all tools in use, streamlines the approval process, and ensures every purchase adds value.

‍

Cut SaaS sprawl

Vendr centralizes your procurement process—saving you time and money.

Sign up for free

‍

SaaS sprawl FAQs

What are the common causes of SaaS sprawl?

SaaS applications are generally designed to be easy to implement. This leads to departments and individual users purchasing software to solve immediate day-to-day problems before communicating with other members of the team. With no centralized workflows for approving solutions, it can be hard for companies to keep track of the SaaS tools they already have. 

How can organizations prevent and manage SaaS sprawl?

Organizations can prevent SaaS sprawl by implementing robust procurement policies, centralizing the process for decision-making about new solutions, and managing existing software. Thorough audits should be completed to identify underutilized solutions and licenses. Staff also need to be educated on these processes. 

How does Vendr help in managing SaaS sprawl?

Vendr helps to manage SaaS sprawl by centralizing the procurement process. All procurement data is centralized in a single platform, with custom approval workflows to ensure staff can still obtain the software they need quickly.

{{cta1}}