Octobits Blog – The financial impact of SaaS waste is pretty significant, which is why identifying SaaS waste has become a big thing in recent years. But, how to identify SaaS waste?
As we know, SaaS waste can take many forms, such as underused licenses, redundant apps, or forgotten subscriptions.
So, why are we still here? Let’s break down the specifics of SaaS waste.
Common Types of SaaS Waste
SaaS waste can take many forms, each of which adds to the unnecessary expenses and inefficiencies that an organization faces.
One common example of waste is underused applications. Even though they’re paid for, many SaaS subscriptions don’t get much use.
And we all know why underutilized SaaS licenses result in significant financial losses.
Another big contributor to SaaS waste are redundant tools. It’s not uncommon for companies to subscribe to multiple apps that do similar things, like different project management or team collaboration tools.
For instance, it’s a good idea to combine similar tools like online training, collaboration, and project management to cut down on unnecessary costs.
Another thing that can lead to unnecessary costs is accounts that are linked to former employees or those who have shifted roles.
These accounts often stay active and keep getting paid for unless they’re identified and deactivated.
Another way to cut costs is to make sure you’re not paying for unused features.
It’s not uncommon for companies to subscribe to premium plans, expecting to use advanced features. But in reality, they may only need the basic functionalities.
Finally, if you don’t review SaaS subscriptions regularly, you might end up paying for tools that are no longer needed or that you don’t even use.
It’s a good idea to regularly review SaaS contracts and assess their relevance to help prevent this waste.
For your reference, kindly read “Your Silent Budget Killer: How to Stop the Leaks of SaaS License Waste.”
Steps to Identify SaaS Waste
To identify SaaS waste, you need to take a systematic and data-driven approach. Here are a few steps you can try to help you uncover and address wasteful spending.
Conduct a SaaS Audit
The first thing you need to do to identify SaaS waste is to do a proper audit of all the SaaS apps you’re using.
This means taking a look at every application, how many users it has, and what it’s used for.
Regular audits can also show you which apps you don’t need anymore or that do the same thing as other tools.
The white paper “How to Eliminate Toxic Spend on Large SaaS Estates” by NPI Financial recommends a comprehensive audit to help you understand what you’re using and who’s using it. This will allow you to cancel or reallocate licenses that aren’t being used effectively.
Analyze SaaS Usage Metrics
It’s key to Monitoring SaaS usage metrics. This helps you spot applications that aren’t being used much.
SaaS management platforms can show you how often applications are used, which helps you make smart decisions about whether to keep or cancel a subscription.
NPI Financial also says this in the same report: it’s important to look at usage data to understand how licenses are being used and to find ways to make them more efficient.
Identify Duplicate or Redundant SaaS Applications
It’s pretty common for different departments to have similar tools, but they often end up paying for them separately, which just leads to more work.
If you can spot these redundancies and get everyone using the same tool, you can save a lot of money.
A lot of companies have trouble with tools that do the same thing, like online training, team collaboration, and project management.
That’s why it can be a good idea to consolidate these functionalities to save money.
Detect Overprovisioned SaaS Licenses
It’s easy to see if you have too many licenses by comparing the number of licenses you’re using to the number you’ve subscribed to.
Sometimes organizations end up paying for more licenses than they actually need, particularly when there’s a change in staff or the project’s requirements change.
So, by digging into actual usage data, organizations can spot and fix overprovisioning, which can help cut down on unnecessary spending.
Uncover Orphaned or Abandoned SaaS Accounts
If you don’t manage orphaned accounts, which are tied to former employees, they can keep on costing you.
So always do a regular review of user accounts and deactivate those that aren’t being used anymore. This can help you avoid unnecessary expenses.
And it’s important to make sure you can see how much data is being used.
This is really helpful for spotting inactive licenses that can be canceled or reused, which will save a lot of money.
We’ll give you the lowdown on “The SaaS Inventory Management Playbook: Strategies for Cost-Savings.”
Review SaaS Renewal and Billing Cycles
It’s a must to review billing cycles and renewal dates to make sure subscriptions are still needed.
Automatic renewals can lead to continued payments for tools that you no longer need.
The problem is renewals often happen automatically, without checking whether the user is actually using the service.
This practice leads to bloat over time, as the SaaS estate quietly grows while costs increase exponentially.
Engage Stakeholders and Gather Feedback
It’s great to get feedback from different departments on which SaaS tools are useful and which aren’t.
This helps us to see which tools are really important and which we can do without.
The NPI Financial white paper makes a good point about involving IT and procurement teams in managing the SaaS portfolio.
The NPI Financial also suggests partnering with business units to understand use cases and make sure the software being purchased aligns with organizational needs.
How Octobits Supports Identifying SaaS Waste
We at Octobits offer a one-stop SaaS management platform to help your organization find and cut out the waste in SaaS.
Our platform gives you all the tools you need to keep an eye on SaaS usage, spot any redundancies, and make sure you’re getting the most out of your licenses.
At Octobits, we make it easy for you to conduct audits and engage with stakeholders to collect valuable feedback.
This means you can make smart choices and get the most out of your SaaS investments.
Take a look at Octobits to see how our solutions can help your organization cut down on SaaS waste and get the most out of your software investments.
Conclusion
So, yes, making the most of your IT budget and boosting efficiency depends on getting rid of the waste in SaaS.
If you take the initiative to take action now, you’ll be well on your way to enhancing operational efficiency and bolstering your financial health.
At the end of the day, understanding how to identify SaaS waste is a key part of achieving your business goals.
