How AbbVie Eliminates Waste with Laser Precision

Wasted spend is one of the biggest plights we see in SaaS stacks in organizations everywhere. It stems from many places, but the number one source of waste we see today is unused software. In fact, the average organization is only utilizing approximately 56% of its SaaS licenses. 

What about that other 44%? Well, it’s gone. Plain and simple. Even in the best of economic climates, that’s just too much. 

That’s why in this session of SaaSMe 2023, we explored how to identify unused SaaS licenses and how you can take action to optimize, eliminate waste and maximize adoption. 

Our speaker for this breakaway session was none other than Renee Turco, the Technology Asset Manager from AbbVie. Watch the recording below or read on for key takeaways.

4 Ways AbbVie Eliminates Waste

Turco began with an overview of Abbvie’s SaaS portfolio, which features over 1,500 SaaS applications and 4,000 software applications in total. Together, this amounts to approximately $400 million in software spend.

And this is where it gets interesting. Of that $400 million, SaaS costs represent half of that spend. 

“In terms of the number of applications,” said Turco. “While it’s much lower than our on-premises number, the spend is still significant. This is why it’s so important that we’re managing SaaS subscription applications very precisely.”

According to Turco, this is achieved by focusing on four different areas: monitoring Shadow IT, evaluating inefficiencies, rationalization, and license optimization. 

Monitor and Address Shadow IT

For AbbVie, a key focus for 2022 was addressing all expensed software and preventing click-thru agreements, unapproved spend, and excessive purchasing. In other words, shadow IT.

“A lot of folks didn’t understand that there were already agreements in place for some of the software that they were purchasing on P-Cards,” said Turco. “And they weren’t leveraging the pricing that AbbVie had already pre-negotiated. So, there were some instances where people were overbuying or paying way too much for applications that we already had agreements for.”

Turco went on to explain that many of these purchases were made via clickthrough agreements that simply weren’t favorable to their organization. For instance, with SurveyMonkey, many employees were still expensing that software over and over. That led to 408 separate transactions. 

By being able to access this data in Zylo, AbbVie reached out and educated their users, and consolidated their purchases into a single enterprise agreement. 

Evaluate Inefficiencies

Next on the list is evaluating purchasing inefficiencies. Turco touched upon this some regarding shadow IT, but she drove this home by discussing separate transactions on the same software. 

“Rather than having, say, 10 plus individual transactions at different times of the year,” said Turco. “They were consolidated and co-termed.” 

Consolidating these applications as well as blocking credit card expenses allow AbbVie to avoid hidden costs for significant savings beyond optimizing. 

Rationalize Applications

Speaking of optimization, many organizations suffer the same problem: application redundancy. Turco knows this well, and that’s why rationalization is a key component of AbbVie’s strategy.

“In the project management space, we use several tools,” said Turco. “But once you start vetting that more closely with your business application owners, you may find there is a very legitimate reason for each of these individual applications to exist. However, you might find there is an opportunity to have teams migrate to something that’s more standard, maybe even less expensive.”  

To this end, AbbVie uses Zylo to categorize applications based on capabilities to provide a starting point for examining overlap. From there, they work with business owners across the organization to vet software while determining use and needs and defining what’s considered redundant. 

At the end of this process, an organization like AbbVie is able to tackle redundant software and consolidate or cancel wherever possible. For example, despite the previous enterprise agreement with SurveyMonkey, they found that the organization already made heavy use of Microsoft solutions. 

“We’ve migrated users away from SurveyMoney,” said Turco. “And onto Microsoft Forms at no additional cost to the company… It’s over a $200,000 elimination as a result of moving to Microsoft Forms.” 

Optimize License Usage

Another opportunity to cut back on waste and optimize SaaS licenses requires insights into usage. For AbbVie, the goal was to specifically reduce any shelfware and address the demand for new solutions. 

By adopting a usage threshold, Turco explained that she was able to take a look at their SaaS applications, and decide what they could do to optimize them. 

“If you find that you’re using far less than what was purchased,” said Turco “It is certainly an opportunity to reduce that spend. And here at AbbVie, we start at the 50% threshold as a starting point.”

Key Results

According to Turco, AbbVie’s key results for 2022 revolved around attaining central visibility in their purchases, contact information, and utilization data. All of this was easily achieved by utilizing Zylo and the concierge services to improve communication across the entire organization. 

At the end of the day, AbbVie’s 2022 SaaS management efforts:

• Reduced expense spend by 47%
• Canceled over 60 subscriptions that were against policy, mostly those with click-thru agreements 
• Optimized Salesforce licenses, swapping licenses between 30 instances of the app, achieving $2.2M in cost avoidance

A SaaS Management Tool Enables Precise Optimization

Today’s SaaS portfolio requires laser precision to manage. However, between shadow IT and a constantly evolving environment, that can be difficult. But it doesn’t have to be. 

Adopting a SaaS management tool like Zylo can help you put all the data you need to make informed decisions and optimize your portfolio with the power of precision at your fingertips. 

And if you want to hear more from our panelists on their SaaS management journeys, you can watch this SaaSMe 2023 session right here.