SaaS Waste

As more SaaS services over the last few years have been added to solve/add value to processes, we’ve gone from managing a handful of subscriptions to hundreds. Because it’s SaaS, companies often don’t check, compare, or look at options. As a result, companies are wasting hundreds of thousands in redundant subscriptions, but also taking a “subscribe-and-forget” attitude on technology often outdated in a year or two.

How does your company track, and work to remediate SaaS Waste?

A friend of mine told me once, that every time he goes to inspect a property (Hotels), he’d ask the manager what costs they were going to cut, and how they were going to add or improve value for guests. It was a discipline he created to push younger associates to continually look for ways to improve whatever property they managed.

Companies typically don’t do this for SaaS services, much less SaaS integration apps. When a toe is stubbed, people look at it, but as long as CFO is ok, many departments don’t think twice about the efficiency/waste. What happens as a result is sometimes referred to as sprawl. One department gets a SaaS account, users, trading partners or volumes churn, but no one goes back to adjust subscriptions. Worse still, many add more subscriptions onto the existing, or create side-by-side accounts. Years go by and you can’t recoup that revenue. You need to manage it now.

Reading a few articles on the subject of SaaS Waste. They point to crazy numbers. For example, one report from 2019 states many companies are wasting approximately $113K annually on SaaS accounts. Most tie off to user/employee churn, or a project-related service deemed no longer needed, which makes sense.

For myself, the day I read the article I reviewed several accounts, and adjusted our Xbox family plan… My son and I used to have a blast with Halo, and some other games a few years ago. I probably gifted Microsoft 3 years worth of fees through inattention.

Business managers need to remove non value-added waste from their value streams. The question I’d leave you with is how does your company manage the process of refining your own subscriptions for enterprise applications, hosted EDI accounts or others?

“The biggest room in the world is the room for improvement.”
– Helmut Schmidt