Octobits Blog – Different types of SaaS waste can increase costs and efficiency, so organizations need to find and manage these wastes in the right way.
Suppose you don’t manage these inefficiencies properly. In that case, you’ll end up wasting resources, using licenses you don’t need, and having lots of redundant applications, which will all add to your operational costs.
Ideally, companies should adopt a strategic approach to monitoring and optimizing their SaaS usage on an ongoing basis.
So, in this guide, we’ll dive deeper into the different types of SaaS waste and how to handle them.
Common Types of SaaS Waste
Unused Licenses
Unused licenses represent a significant portion of SaaS waste. Organizations often buy more licenses than they need, which wastes resources.
According to Zylo’s “2024 SaaS Management Index,” an average of 44% of SaaS licenses go unused or underutilized in enterprises.
This waste happens because businesses don’t do regular audits and inventory checks, which are key for spotting and getting rid of extra licenses.
In the “2021 State of SaaSOp,” BetterCloud also shows how important it is to keep an eye on things and make sure that license allocations are adjusted to match actual usage needs.
Underutilized Subscriptions
Another common form of SaaS waste is underutilized subscriptions. This happens when employees aren’t fully trained to use the software or when the software isn’t fully integrated into their workflows.
According to a study by Vertice in “The true cost of SaaS wastage (and how to prevent it),” 33% of software licenses within an organization’s SaaS stack are underutilized due to inadequate training.
If you get people up to speed with the software quickly and keep them informed about new features, you can significantly boost how much they use it, which will cut down on waste.
Redundant Applications
When different departments or teams in an organization get tools that do basically the same thing, you wind up with a lot of overlapping functionality.
This kind of redundancy is pretty common in large companies, and it adds up to a lot of unnecessary expenses.
The BetterCloud report says consolidating these apps can save you a lot of money. You can get volume-based discounts and cut the number of software subscriptions.
Shadow IT
Shadow IT is when employees use unapproved software without the IT department’s knowledge. This practice not only poses security risks but also leads to more SaaS waste.
This can lead to security risks, data governance issues, and contribute to SaaS waste if these unauthorized subscriptions aren’t checked.
Strict policies and monitoring tools can help organizations control unauthorized software use and minimize waste.
Lack of Integration
If you don’t integrate your different SaaS tools well, you’ll end up with data silos and redundant work processes, which is a waste of SaaS.
Making sure new software works well with existing systems is key to getting the most out of them and avoiding waste.
You can avoid some of the integration issues by choosing SaaS solutions that have good APIs and are compatible with your existing infrastructure.
To get an idea of how much money you could save by reducing SaaS waste, kindly read “How to Reduce SaaS Waste: $18 Million Problem You Need to Kick Out.”
Strategies to Mitigate Different Types of SaaS Waste
Running audits on a regular basis is key to spotting licenses that aren’t being used or aren’t being used to their full potential.
SaaS management platforms can make this process easier by giving you a better idea of what software is being used and helping you make better decisions.
According to Czekała, Drozdowski, and Łabiak in “Modern Technologies for Waste Management: A Review,” systematic inventory management helps companies to make the most of their resources and avoid wasting anything.
A centralized SaaS management system gives you better oversight and control over software procurement and usage.
This approach helps you avoid buying the same thing twice and makes sure you’re on the same page as the rest of the company.
Centralization also makes it easier to negotiate with vendors and manage contracts, which can lead to cost savings.
If you give people all the training they need to use SaaS tools effectively, they’ll be more likely to use them.
Asking employees for their feedback helps figure out which tools are really essential and which can be eliminated.
Reviewing and combining applications with similar functions can really cut costs.
You can also negotiate volume-based discounts for all the tools you’ve consolidated. This strategy also makes it easier to manage and support the software environment.
Automation for tracking and monitoring license usage helps you keep an up-to-date inventory and stay in compliance.
Automated alerts for when you’re using too much or too little can help you take action to make the most of your resources.
Czekała, Drozdowski, and Łabiak talk about the benefits of using automated systems for efficient waste management, which can be applied to managing SaaS resources as well.
Tools to Track and Reduce SaaS Waste
There are lots of tools out there to help businesses track and cut down on SaaS waste. Each one has its own special features that can help make things more efficient and save money.
SaaS Management Platforms (SMPs) are designed to give you a centralized dashboard for managing all your SaaS subscriptions in one place.
These platforms have features like usage tracking, license optimization, renewal management, and spend analysis.
For instance, Octobits has got you covered when it comes to managing SaaS portfolios.
This tool has some pretty handy features, like automated license tracking, usage monitoring, and compliance management. These help to cut down on SaaS waste.
Octobits gives you all the info you need to make smart decisions about your software investments.
Just head over to the Octobits website for more info and to get a free trial until the end of June 2024.
Expense management software is also great for tracking SaaS spending, spotting cost-saving opportunities, and automating expense reporting processes.
Zluri is one example of a tool that provides real-time expense tracking and reporting, which helps finance managers keep a close eye on SaaS expenses.
Also, think about using Cloud Access Security Brokers (CASBs) to get a better handle on shadow IT usage, enforce security policies, and control access to cloud apps.
These brokers are really important for spotting unauthorized software, which can be a big security risk and contribute to SaaS waste.
Conclusion
So, it’s clear that figuring out how to cut back on SaaS waste is a great way to get the most value out of all your software spending.
Suppose you spend a bit of time identifying common areas of waste and putting strategies in place to tackle them.
In that case, you’ll not only be improving your day-to-day operations but also saving money in the process.
With the right tools and platforms, like Octobits, managing all types of SaaS waste is a breeze.
