Is your organization spending more than is should on SaaS applications due to redundancy or overlap of features and technological capabilities? For more enterprise organizations, the answer is almost always a resounding “yes”.
“How much does your organization spend on SaaS subscriptions — do you even know?” This is the first question executives must consider when evaluating overall expenditures on SaaS. Most often the answer is very difficult to find, if not impossible, as the data is buried within spreadsheets and pivot tables.
Tracking SaaS spend across all departments can be an absolute nightmare, and on top of that, executives must consider the cost that overlapping features or redundant systems can have on the bottom line. Often times, the cost of redundant SaaS applications can represent a sizeable percentage of the overall SaaS expenditure line item.
The Real Cost of Redundant SaaS
Decisions to move forward with renewals and upsells of SaaS subscriptions are often made at the department level within their respective budgets, creating a disparate view at the top level. Add on to that the challenge of tracking employees software subscriptions when individuals or teams use credit cards for the sake of simplicity and to avoid going through the IT procurement procedures and red tape.
Those subscription costs, whether $99/month or $500/year, add up quickly — especially when multiple employees or teams across the organization may be charging their credit cards for the same subscription, causing redundancy and potential overlap in unnecessary features.
Executives must also consider how much of an impact redundant subscriptions have to the bottom line. IT departments and finance teams have many other priorities and don’t have cycles to spin tracking down whether multiple individuals or teams are using the same subscription software — especially if they are simply charging it to their company or personal credit card.
Because of this, many organizations don’t even know that redundant SaaS applications are an issue in the first place and certainly aren’t aware of the cost of these overlaps.
Internal Implications of Subscription Overlap
Redundancy and overlap of features can cause incredible confusion for employees. For example:
Your marketing team invests in a Marketing Cloud suite that contains capabilities for email, marketing automation, mobile, landing pages, remarketing, advertising, and more. Meanwhile, smaller teams across marketing prefer email capabilities of another solution, while other team members prefer to use a different landing page creator.
While the organization as a whole has invested in the Marketing Cloud suite, separate teams are charging small accounts with just a few users to their personal credit cards.
What’s the risk? Consider a few of the following potential implications:
- Lack of consistency across templates
- No control over brand design or organizational elements
- Lack of IT control over security
- Employee confusion about what solution to use
- Disjointed customer and prospect experience
- Lack of documented processes
When redundancy of products or features is rampant across an organization, team members will have to spend considerable amounts of resources just to understand these overlaps and educate colleagues on when to use what tool, what the procedures are, and so on.
Within your company, do you use more than one of:
- Google Drive, Dropbox, Box
- Skype, Hangouts, Bluejeans
- Asana, Trello, Basecamp
- Slack, iMessage, SMS
- Word, Google Docs
“When you are tiny, it’s fun to experiment around with different things. When you get a little bigger, say 20 people, it’s natural to have multiple systems introduced as you try to optimize things, hire new people who are used to what they used at their previous company, or just get frustrated with what matters and distract yourself with something that doesn’t matter.”
The article continued: “…You will reach a point in your company’s life — typically around 50 people — where you realize you are wasting 20% of your collective time on overlapping systems, inefficient processes, redoing work because someone decided to build a database in Excel that doesn’t link to anything, or scrambling to pull together information that should be immediately available to everyone.”
Closing the Redundancy Gap
How do executives gain visibility to determine if subscription redundancies are occurring? If your executive team was to gain insight into tracking how many employees or teams are using any given SaaS application, wouldn’t you have your Finance team work out an Enterprise or Group discount? Or better yet, roll all of those subscriptions into a single master agreement?
Or perhaps, evaluate applications side by side to identify overlapping feature sets and choose to use the solution that’s most utilized, or most favored by employee sentiment?
Without real-time data to track and monitor SaaS subscriptions across your organization, you may be leaving big bucks on the table.
Take the first step to closing the redundancy gap with SaaS optimization and rationalization. Learn how with our Practical Guide to Rationalizing, Rightsizing, and Renewing SaaS, or grab a copy of our Rationalization Checklist to guide you through the process.