A 4-pronged strategy to cut SaaS sprawl

To preempt such instances of shadow IT, Goel proposes that enterprise technology leaders implement a centralized approval process for any new SaaS tool adoption. “IT leaders should require teams to justify the need for the new tool, demonstrate its value, and explain how it complements the existing tech stack. This approach ensures that every SaaS subscription aligns with the organization’s overall strategy and prevents impulsive adoptions that may lead to SaaS bloat,” he says.

At one of Goel’s previous employers, the IT department introduced a formal SaaS request form. Any team wanting to adopt a new SaaS tool had to fill out the form, including details about the tool’s intended purpose, anticipated benefits, and estimated costs. The request then underwent a review process involving key stakeholders, IT, and finance.

“This process led to a significant reduction in unnecessary subscriptions as teams became more mindful of their software choices,” says Goel.

Laxshmivarahan adds that CIOs can also adopt technologies aimed at providing visibility into the sprawl, which can then be arrested. “We are in the process of implementing cloud access security broker (CASB) that will give us a view into shadow IT, which we didn’t have earlier.”

Periodic vendor and contract review

It is also critical for enterprise IT decision makers to regularly review existing SaaS vendors and contracts to ensure they still meet the organization’s needs and align with its objectives.

“As business requirements evolve, certain applications may become obsolete or less relevant. Negotiate with vendors for better terms or consider alternative solutions that offer similar functionalities at a lower cost. One organization discovered that over time, the features offered by their email marketing software were not being fully utilized. Instead of continuing with the current vendor, they opted for a different platform with a more tailored feature set, resulting in substantial cost savings,” says Goel.

There are technologies available today that can provide an IT leader with complete visibility into the organization’s SaaS environment. However, whether technology leaders are leveraging such technologies or not depends on their scope of work. Old-styled IT leaders, who just define the hardware and software environments and focus on only managing the IT environment, seldom use such technology to cut SaaS bloat. 

“In the current bloat, there is a possibility that smart leaders will find ways to create valuable opportunities for businesses to differentiate themselves, by leveraging the unused features. That is, CIOs should be singularly thinking about ways to develop digital business capabilities, and employees may be encouraged to think about creative ways as well, in case they find something valuable,” adds Dr Setia.