Overcome SaaS sprawl:
Challenges and methods to conquer it

30% of SaaS spending is wasted on unused subscriptions, redundant tools, or duplicate licenses. You might as well be burning your money—it’s the same thing.

You’re draining resources, cluttering workflows, and your lack of visibility is causing you and your team to stay stuck.

What can you do?

In this article, you’ll learn exactly what SaaS sprawl is, the key factors driving it, and the biggest challenges it poses.

But don’t worry—you’ll also learn proven strategies to overcome SaaS sprawl and ensure it never wastes your money or resources again.

What is SaaS sprawl?

Businesses have increased the number of SaaS apps they use by 4% YoY to 93, according to a report from Okta.

The problem is rife—but what is it exactly?

SaaS sprawl is when an uncontrolled amount of apps are used within an organization. There is typically little oversight from IT or management and it comes with a slew of problems. 

This includes wasting money and resources. 

Nearly half of SaaS licenses are not being used, and 69% of workers waste one hour every day switching between apps.

What are the causes of SaaS sprawl?

Most companies operate in a perfect storm for sprawl to prosper.

• New SaaS applications are easy to access. It has never been easier to find an app for your problem. Not only is there a booming supply, but purchasing is effortless. It takes a few simple clicks, a quick face scan, and within minutes workers can be up and running with the latest SaaS application. This results in a surge of mismanaged software. 
• No clear policies. Without clear policies, chaos quickly ensues. There are no boundaries or guidelines for staff to follow, so they will do what they think is best. Staff don’t intend to create sprawl, but are unaware of the problem, and haven’t been given explicit guidelines. The result? A jumbled mess of apps spread across the company. 
• Procurement of apps is decentralized. Decentralized procurement gives freedom but is a leading cause of sprawl. This results in oversight. With oversight comes inefficiencies, uncontrolled spending, and security risks.

What are the challenges of SaaS sprawl? 

It is crucial to treat and prevent SaaS sprawl due to its serious implications. 

Overspending on SaaS

When so many apps are being used, spending can get out of control. 

With no clear policies and a decentralized procurement process, staff can pick and choose what they purchase, when they like, without thought and need for approval. 

This leads to inefficiencies. 

It’s likely a SaaS license is held that can do the task the worker is looking for, without having to purchase an additional tool. 

It’s wasting money. Like purchasing groceries when the fridge is already full. 

When pockets of money are spent chaotically, how can your organization manage its finances? 

How can your organization reduce costs when spending needs to be cut? 

It’s essential to have an overview of every software being used.

Shadow IT 

30-40% of IT spending in large organizations is shadow IT, according to Gartner studies. 

Shadow IT is when the purchase of SaaS software is not approved by the IT department. It is a consequence of SaaS sprawl. 

This puts companies at risk.

When the IT department in a business is not aware of the apps being used, it can’t be monitored. This exposes the enterprise and presents a risk of being exploited by hackers and other security issues. 

Security and compliance risks

Shadow IT, as explained above, can lead to risk. 

Your data may be held in unsafe applications and shared with unverified people. 

Cloud-based attacks are prevalent. 

As many as 51% of large enterprises had a ransomware attack aiming to steal data with 52% succeeding.

SharePoint Online experienced an attack through a compromised Microsoft Global SaaS admin account. The hackers accessed confidential data and demanded payment to avoid leaking the information.

And it’s not just security, compliance is also an issue. 

If an organization holds sensitive data such as PHI (protected health information) or PII (personally identifiable information) then they must comply with strict protocols. Adhering to these rules becomes difficult when shadow IT is rife as they are unable to verify which apps comply. 

How to prevent and manage SaaS sprawl

It’s paramount that SaaS sprawl is acknowledged, reversed, and prevented. The risks are too great to ignore. 

But how? 

Create a SaaS Governance Policy and outline best practices

A governance policy will lay out clear guidelines for workers. It should exist as a sole document that all workers can access.

Review the policy annually and adjust accordingly based on feedback and experience.
It should address topics such as.

• SaaS usage. An outline of how SaaS tools are used. 
• Purchasing requirements. The steps and approval process for purchasing SaaS tools.

• Security and compliance. The procedure to follow and the verification process to ensure apps comply with good security and are compliant. 

• Access control and user permissions. Outlining who has access to the software, their level of access, and how to request additional membership. 

• Integration protocols. How the apps should integrate with current systems and tools. 

• Renewal and offboarding. Steps outlining how to renew a membership or discontinue. 

To create one, you should follow this four-step process. 

• Get started. To begin you want to gather all the necessary information from different department heads such as legal and wide-domain tech users. Check what current SaaS contracts are in place and ask users what they like or dislike about the current services. Weed out the apps that are no longer in use and suspend the licenses. 
• Outline your structure and best practices. Include the topics addressed above. There may be additional content you’d like to include depending on your business and industry. The key is to make it relevant and useful for your company. Don’t worry if it’s not perfect to begin with. This is the starting document that you should aim to revisit and update regularly. 
• Write it up. Ensure the language is clear, and simple, and avoids jargon. You want staff across the organization to read and understand.
• Find approval. Ensure you get approval from the leaders in management and make any necessary adjustments. 

Train staff on how to request new software

Lack of knowledge is what perpetuates the cycle of SaaS sprawl. 

Once you’ve created your SaaS governance policy it’s easy to send an email with it attached, but it’s better to provide a training session. 

Properly introduce the new policy, let staff ask questions, and in particular, teach them how to request new software. 

Follow these steps:

• Clear request process. Ensure you outline a clear request process. Provide a step-by-step procedure that is easy to follow. 
• Approval workflow. Let staff know who will approve the request, and what’s the criteria for a request to be accepted.
• Risks of shadow IT. Educate staff on the risks of SaaS sprawl and shadow IT. Provide examples and case studies to illustrate your points effectively.
• Accountability. Establish how requests should be made and through what channels to avoid potential tool duplication and to stick to the procedure.
• Provide refresher training. Regularly update staff on the importance of preventing SaaS sprawl, ensuring new staff are also aware.

Improve visibility and share SaaS applications used across the company

When the whole organization is aware of what tools are available it enhances productivity, avoids duplication requests, and breaks down silos.

Follow this process to optimize sharing your SaaS applications.

• Centralized visibility. Create a shared repository for all software. There are multiple ways you can create this. You might have a spreadsheet on your shared drive or a list on Notion. Yet, it’s better to have a SaaS management tool, like Spendbase, and all your software listed in it.
• Cross-department collaboration. Make sure you obtain all the SaaS tools used across the organization by every department. Ask them to share what they use it for and the benefits it brings. This means when sharing with the company other staff can identify what tools might be helpful for them. 

• Search before requests. Ensure staff search the tool repository before requesting new software. This will decrease the number of requests received and promote good practice.

• Announce new software. Inform staff when a new tool has been accepted. This keeps them up-to-date with the latest apps available and will keep them engaged with the process.

Regularly audit and optimize your SaaS stack

Audits are critical to avoid SaaS sprawl. It helps optimize the current software usage and ensures that security and compliance are kept in check. It allows you to assess and review what software is in use and whether it’s still necessary.

An audit can also avoid duplicate tools and redundant apps that are overloading your SaaS stack.

Here’s a quick guide to conducting an audit:

Use a SaaS management tool 

You can save 39% on software when using the right SaaS management tool. 

You’ll make huge cost savings from identifying redundant apps and negotiating contracts. 

You’ll avoid overpaying for underused tools and gain 100% visibility and control of your entire SaaS stack. 

You can also save money on the tools you want to keep using. 86% of people who use Spendbase successfully negotiate better deals with SaaS vendors.

Your audits can be an overwhelming and looming task, as though you’re looking up the top of a mountain when you’re sitting at the bottom.

Spendbase is like attaching a jetpack to your back. You’ll set up app requests and approval workflows that employees will enjoy using. And you’ll get a transparent and up-to-date list of all your company’s apps in one place.

Imagine a life where SaaS sprawl feels like a story from another life. Shadow IT is eliminated, spending is in check, and transparency is always available. 

It’s time to get your sprawl under control.