SaaS Sprawl: What it means & how you should manage it

Would you struggle to name every SaaS application in your company’s tech stack? You’re not alone. According to a recent survey, 61% of companies are currently signed up to over 100 different SaaS applications, a situation commonly referred to as SaaS sprawl. 

So, what exactly is SaaS sprawl? What kinds of problems does it present and how should you handle them? To help you get your tech stack under control, we’ve put together an easy-to-follow guide to SaaS sprawl.

SaaS sprawl is a problem that arises when an organization has an unmanageable number of SaaS applications in its tech stack. Key symptoms of SaaS sprawl include: 

1. Your IT manager is unsure how many applications are in use

Ideally, your IT manager should know how many SaaS platforms are necessary for your business to operate successfully, as well as the kinds of services to which your company subscribes. In a company affected by SaaS sprawl, teams may be using an array of different tech products that perform the same essential functions. 

For example, your finance team may use Dropbox to perform everyday activities, while your marketing team uses Google Docs. When the teams need to work together, this kind of siloed SaaS activity could prove disruptive, costly, and frustrating. 

2. You’re spending huge amounts of money on SaaS products

Ideally, your IT manager should know how many SaaS platforms are necessary for your business to operate successfully, as well as the kinds of services to which your company subscribes. In a company affected by SaaS sprawl, teams may be using an array of different tech products that perform the same essential functions. 

For example, your finance team may use Dropbox to perform everyday activities, while your marketing team uses Google Docs. When the teams need to work together, this kind of siloed SaaS activity could prove disruptive, costly, and frustrating. 

3. You’re SaaS collection isn’t centralized

Failing to collate a list of active subscriptions represents a one-way street to SaaS sprawl. Fortunately, as we will discuss later in this article, platforms such as onetool can help you to tackle visibility issues and refine your tech stack. 

Why is SaaS sprawl so common amongst growing businesses?

The main reason why SaaS sprawl affects so many companies is that tech companies have made their sign-up processes hyper-efficient. Before SaaS applications were popularized, signing up to local platforms was a multi-layered process that involved the following steps:

  • Shortlisting potential vendors and weighing up their pros and cons.
  • Negotiating a software contact, potentially by holding a meeting.
  • Purchasing the software.
  • Working with the vendor’s tech team to install and configure the system.
  • Asking members of the IT department to onboard employees to the platform.

 

Today, senior employees can sign up for new SaaS platforms within a matter of seconds if they have access to company funds. In some ways, this streamlined process is a blessing, saving time and ensuring that individual teams have the freedom to source the best SaaS applications to suit their needs. Employees with limited software options may find themselves frustrated and unproductive, while workers with access to cutting-edge new tools could help your business go from strength to strength.

On the other hand, however, the wide availability of SaaS platforms means that many companies are building an unmanageable stack of tech products. Thanks to the COVID-19 crisis and the worldwide shift to homeworking, the problem has only worsened. Unable to communicate with each of their colleagues quickly and easily, remote workers are more likely to sign up for a new tool without assessing whether it is cost-effective or even particularly useful.

What problems does SaaS sprawl present?

The main reason why SaaS sprawl affects so many companies is that tech companies have made their sign-up processes hyper-efficient. Before SaaS applications were popularized, signing up to local platforms was a multi-layered process that involved the following steps:

  • Shortlisting potential vendors and weighing up their pros and cons.
  • Negotiating a software contact, potentially by holding a meeting.
  • Purchasing the software.
  • Working with the vendor’s tech team to install and configure the system.
  • Asking members of the IT department to onboard employees to the platform.

 

Today, senior employees can sign up for new SaaS platforms within a matter of seconds if they have access to company funds. In some ways, this streamlined process is a blessing, saving time and ensuring that individual teams have the freedom to source the best SaaS applications to suit their needs. Employees with limited software options may find themselves frustrated and unproductive, while workers with access to cutting-edge new tools could help your business go from strength to strength.

On the other hand, however, the wide availability of SaaS platforms means that many companies are building an unmanageable stack of tech products. Thanks to the COVID-19 crisis and the worldwide shift to homeworking, the problem has only worsened. Unable to communicate with each of their colleagues quickly and easily, remote workers are more likely to sign up for a new tool without assessing whether it is cost-effective or even particularly useful.

What problems does SaaS sprawl present?

SaaS sprawl can detrimentally affect employees across departments in differing ways. The primary teams negatively impacted by an unwieldy tech stack include:

1. The IT department

The IT department represents the tech frontline of any business. As such, they’re ultimately accountable for all SaaS activity. Depending on company policies, your IT department’s responsibilities could include delivering SaaS applications to employees, creating user accounts, ensuring that employees are familiar with relevant compliance rules, and approving requests for new licenses. 

 

Unfortunately, many IT departments are unable to handle the many challenges that come with SaaS adoption. If they don’t have tracking strategies and licensing best practices in place to handle a high volume of SaaS applications, they may lose their grip on the company’s tech stack. As a result, the following problems may occur:

 

  • Members of the IT team being unable to help colleagues troubleshoot SaaS issues.
  • Data breaches, data loss, or infringement of privacy laws.
  • Poor collaboration between different teams.
  • Bandwidth problems that negatively affect productivity.
  • Budget wastage.
 

In other words, a happy and functional IT team needs as much help as possible from tech solutions and higher management to handle SaaS sprawl.

2. The finance team

All finance teams require comprehensive visibility of company spending to fulfil their roles. If they’re unable to view spending figures related to your company’s SaaS subscriptions, they won’t be able to accurately ascertain financial outgoings. Indeed, your finance team is likely to underestimate your SaaS outgoings, thereby producing overly optimistic forecasts and failing to spot instances of inefficient spending. 

In the long term, this financial oversight could dent your profits and slow down the growth of your business. 

3. High-level executives and stakeholders

Stakeholders and workers in executive leadership roles need clear and comprehensive spending statistics to analyze the ROI of SaaS applications. Without these numbers, the executives cannot ask pressing questions about user adoption rates or the value of renewing certain licenses. Such a lack of visibility could even lead to investment withdrawals and reputational damage within the investor community.   

Best practices for managing SaaS sprawl

All finance teams require comprehensive visibility of company spending to fulfil their roles. If they’re unable to view spending figures related to your company’s SaaS subscriptions, they won’t be able to accurately ascertain financial outgoings. Indeed, your finance team is likely to underestimate your SaaS outgoings, thereby producing overly optimistic forecasts and failing to spot instances of inefficient spending. 

In the long term, this financial oversight could dent your profits and slow down the growth of your business. 

1. Close the gap between your IT team and other departments

While giving your IT team ultimate control of your company’s tech stack is likely to cause frustration in other departments, giving team managers free rein over SaaS subscriptions and renewals is a recipe for disaster. 

In other words, you need to bridge any communication gaps between your IT department and other teams. The former should operate on a consultative level, helping team leaders find the best platforms for their needs and highlighting applications which could benefit multiple areas of the business. This will help to avoid unnecessary overinvestment in applications. 

2. Delegate liaison officers for each department

To avoid confusion and to aid clear communications, you may wish to delegate employees from each department to liaise with the IT team. 

3. CEOs and other high-level professionals must take some responsibility

Addressing SaaS sprawl often requires a large-scale cultural shift, particularly if your company employs a large number of workers. If you’re a CEO or CIO, it may be worth sending an email to employees about the need to streamline your tech stack. Alternatively, you could launch an internal awareness campaign for workers to get involved with – just make sure it is as engaging as possible for maximum results

4. Focus on data

The best way to get rid of unnecessary SaaS applications is to collect plenty of data about their efficacy. It may take some hard work, but your IT team should work closely with other teams to collect data about every active SaaS subscription. This data should be carefully analyzed and compared to come up with a cost-effective solution that all employees are happy with. This process should be repeated every so often to ensure your tech stack remains cutting-edge and your business is allowed to grow.

5. Invest in a SaaS management tool

Last, but certainly not least, you must invest in a SaaS management tool. It may seem a little counterintuitive to invest in a SaaS platform to deal with sprawl, but a manual assessment of your applications will take up huge amounts of time and is likely to fail in the end. 

There are several options out there, but savvy business owners should head straight to onetool if they want to enjoy the best management platform on the market.

How onetool could help you to manage your SaaS sprawl

Offering a centralized and easy-to-use SaaS management platform, onetool is your go-to tool for preventing SaaS sprawl. It is affordable, multi-functional, and great value for money. Here are just a few of the ways onetool will aid your IT team:

onetool

1. It improves visibility

As already mentioned, visibility is key to ensuring IT teams are aware of how every SaaS license is being used. By collecting vital licensing information in one place, onetool eliminates the need for manual spreadsheets and the possibility of human error. In other words, our handy platform helps to reduce the workload of your IT team and optimize your company’s spending powers. If your business is growing quickly, onetool will help you to avoid SaaS sprawl and protect the financial viability of your organization. 

2. It offers granular data

As well as offering information about the number of SaaS products in your stack, onetool produces granular data about platform usage. Using this data, senior managers can start to answer questions such as:

Which contracts are worth renewing?

  • Should we attempt to negotiate a better contract with a certain vendor with a view to saving money?
  • Should we switch to a cheaper SaaS license with fewer features?
  • Should we upgrade to a more expensive SaaS license to benefit from cutting-edge features?
  • Which tools are absolutely vital for the running of the company and which can be shaved off if necessary?
 

Are we investing in duplicate SaaS platforms? 

3. You can pay invoices quickly and easily

Renewing SaaS licenses can be time-consuming and confusing. With onetool, all of your software invoices are collected in one place. This allows you to keep on top of your financial affairs and protects the reputation of your company. 

4. You can automate workflows

Onetool is amazingly versatile and offers additional perks beyond SaaS management. It automates employee onboarding and offboarding, for example, ensuring that employees only have access to platforms that they need to use to do their jobs. Automating your SaaS lifecycle management in this way could help to protect your company from data breaches. 

Get the latest tips on SaaS management to your inbox!

Make a deal


By submitting this information I consent to receive onetool’s emails and calls. Please see our privacy policy to understand how onetool handles your personal information.

Request Free Consultation


By submitting this information I consent to receive onetool’s emails and calls. Please see our privacy policy to understand how onetool handles your personal information.