How CFOs Can Regain Control in the Era of SaaS Sprawl

In the past, CFOs had clear visibility into their organizations' software expenses. Decisions on software investments were centralized, with IT leaders purchasing on-premise solutions that would meet business needs for several years. This process made software investments predictable and manageable. But the rise of SaaS has dramatically changed that landscape.

The Challenge of Decentralized Purchasing

The shift to SaaS revolutionized how companies acquire software. With the ability for employees to purchase software directly using a credit card, traditional procurement processes have become decentralized. Today, many purchases are made without ever going through IT or procurement, leading to what's commonly referred to as 'shadow IT.'

Recent reports show that business units now control more than two-thirds of SaaS spending, leaving a smaller portion under direct IT oversight. While this can empower teams to quickly access the tools they need, it often results in a lack of centralized oversight and unanticipated budget creep.

For CFOs, this new reality can be frustrating. A growing number of apps means higher costs, and without proper tracking, it's hard to see where the money is going and how effectively it's being used.

The Impact of SaaS Sprawl

It might seem like a minor issue when an employee downloads a Trello or Canva for their project. But small actions add up, and soon, the organization’s SaaS expenses can spiral out of control.

Consider this: the average company now spends millions annually on SaaS tools. Many SaaS providers use a "land and expand" approach, starting with one or two users on a free or low-cost version. As usage grows within a team, it often expands across departments, eventually requiring a company-wide license.

This growth can quickly inflate the software budget. Over time, SaaS has become one of the largest budget line items for many organizations, second only to employee salaries.

Why Visibility into SaaS Spend Matters

For a CFO, maintaining fiscal responsibility requires a complete view of where money is being spent. However, with individual employees expensing tools or departments purchasing niche apps without consulting IT, a significant portion of software spending remains hidden. This shadow IT makes it challenging to maximize software investments and ensure that money is well spent.

Having complete visibility into SaaS spend allows CFOs to:

• Uncover Waste: Identify duplicate purchases, redundant tools, and unused licenses that drain resources.
• Negotiate Better Deals: Leverage data to secure more favorable terms during renewals.
• Reallocate Licenses: Ensure that underutilized licenses are reassigned to those who actually need them.
• Empower Better Management: Make informed decisions about which tools to keep and which to phase out.
• Plan for the Future: Accurately forecast and budget for SaaS needs based on real usage patterns.

Regaining Control of SaaS Spending

To get back in control, CFOs need a clear understanding of their SaaS landscape. This starts with continuous discovery—because you can’t manage what you don’t know is there.

With new applications entering an organization’s ecosystem every month, discovery isn’t a one-time task; it’s an ongoing need. Modern SaaS management platforms can help automate this process, continuously scanning and identifying SaaS usage across all departments.

For example, using an advanced SaaS management tool, you can uncover that up to 60% of your software licenses are actively used, with many tools lying dormant. By consolidating redundant apps, eliminating unnecessary ones, and reallocating licenses, CFOs can significantly optimize spending.

How Our Solution Helps You Regain Control

Our SaaS management platform goes beyond simple tracking. It provides actionable insights that can help you take immediate steps to reduce waste and optimize your SaaS portfolio. Here’s how it works:

• Automated Discovery: Continuously identify all SaaS applications in use across your organization, including those hidden under shadow IT.
• Smart Optimization: Spot underused licenses and apps that have overlapping functions, allowing you to streamline your stack.
• License Reallocation: Our platform identifies licenses that sit unused and offers recommendations for reallocation or cancellation, ensuring every dollar counts.
• Simplified Reporting: Get clear, easy-to-understand reports that show where the money is going and highlight areas for savings.

Imagine knowing exactly how much you could save by cutting down on unused software. By adopting a data-driven approach, you can not only reduce your software expenses but also ensure that your team has the tools they need without the excess baggage.

Conclusion: It’s Time to Take Action

Managing SaaS may seem complex, but the right approach can make it easier. Here’s what you can do today:

• Audit Regularly: Don’t wait for budget reviews. Regularly audit your software to see what’s actually in use.
• Centralize Visibility: Ensure your IT team has full visibility into all tools, even those procured outside of traditional channels.
• Optimize Continuously: Use the data to make adjustments, consolidate apps, and eliminate waste.

CFOs need tools that can adapt to the ever-changing SaaS landscape, providing clarity and actionable insights. If you’re looking to regain control of your SaaS spend, our platform offers a clear path forward. Try our free trial—no credit card required—and see how you can save up to 40% on your SaaS spend. Start your trial today.