You’re Wasting Money with Unused Software. Cut Costs with Laser Precision

It doesn’t matter if the economy is booming or on a precipitous decline, companies are looking to make the most out of their investments. That means cutting costs without sacrificing utility wherever possible. For many, that means taking a deeper look at their largest investment right after headcount – their SaaS portfolio. Unused software is a big culprit.

The average organization’s SaaS portfolio is rife with unused software. So it’s a natural place to start saving. In fact, 51% of applications go underutilized or unused, and organizations waste approximately $18M each year on unused SaaS licenses. Talk about wasted spend that could be better invested elsewhere. It’s only a matter of identifying these applications and taking the right action. 

That’s why today we’re going to take a look at how you can stop wasting money on unused software with SaaS management. 

Cut the Waste with SaaS Management

SaaS management is more than just a one-and-done project to optimize your tech stack. Rather, it’s a programmatic approach to cutting software waste with laser precision – saving you money while maximizing your investments.  

Contrast this with blanket approaches to cost-cutting. Whereas it’s tempting to say, “let’s cut spend by 10%” and be done with it, you risk cutting tools and investments for the things you really need. In the process, you lose utility and may well find yourself a greater loss than before. It’s a hammer approach where a fine tool is needed. 

Rather, rely on a smart SaaS management platform that can tell you where that 10% exists so you can cut it with precision without harming your tech stack in the process. 

Opportunities to Reduce the Costs of Unused Software

The key to cutting software waste is knowing when to strike. Renewals are your prime opportunity for optimization – reducing unused software and spend. Here are a few opportunities to accomplish this:

1. Consolidate redundant or overlapping applications
2. Rightsize to the appropriate number of licenses per your needs
3. Negotiate better pricing with your vendor based on benchmarking data

A renewal-minded approach to SaaS management is most effective when operationalized across your entire business as part of a system of programmatic renewal management. 

Let’s take a quick look at those big opportunities we just mentioned – rightsizing, rationalization, and benchmarking. 

Rightsizing

When we talk about rightsizing a SaaS stack, we’re talking about more than just removing applications or reducing license seats. Rightsizing requires identifying your SaaS applications and their utility, classifying them according to business impact, and collaborating across your business units to determine their value. 

During this process, you’ll be able to map solutions to your company goals and see how they align. You just need the right tools to do that with precision. A dedicated SaaS management tool makes that possible – allowing you to know exactly how many apps you are running and how many users are taking advantage of them each and every one. This information will put your entire stack under a microscope to find cost-saving opportunities no matter where they’re hiding. 

For example, imagine that you have 1,000 licenses of Salesforce. Through SaaS discovery, you may find that only 500 people are using it. That’s money going to waste and a prime opportunity for rightsizing. And with a tool like Salesforce, you’re likely to save thousands of dollars.

Rationalizing

Rationalization on the other hand is focused on determining which applications should remain in use, replaced, retired, or consolidated. As such it’s a major opportunity to cut costs. However, it’s more than an audit. Rather, it’s about creating a system of logic and reasoning to apply to your tech stack and evaluate tools.

For example, there are very few companies that could justify having dozens of project management applications running in their stack. Rationalizing your tech stack could bring this number down to the single digits, leaving the applications that best align with your needs. Along the way, you’ll rout out the unproductive and outdated tools that linger in every company’s SaaS portfolio. 

Benchmarking

Simply put, SaaS benchmarking involves evaluating and comparing data against internal or external sources to optimize processes and improve performance.

For example, your existing SaaS Management platform likely shows how many licenses you hold for each application, utilization data, and cost. Benchmarking adds an additional layer of context, allowing you to see how your organization stacks up against companies of similar size and industry.

When it comes to reducing waste in your SaaS portfolio, benchmarking gives you leverage going into renewal conversations. Building on the previous Salesforce example, say you find that you’re paying 40% more than your cohort. You then bring that to your vendor to strengthen your request for a reduced rate. 

A tool like Zylo Benchmarks helps you renew your applications at the best price. Not to mention, if you are consolidating, finding the best tool for the job. And, maybe that makes not renewing an easier decision.

Examples of Real Cost Savings from Zylo Customers

As we said before, SaaS management is more than just a one-time project. It’s an ongoing system of management that requires an efficient tool like Zylo’s SaaS management platform to make it work. Otherwise, you risk being caught in a mire of spreadsheets that require constant upkeep.

Here are the benefits experienced by real Zylo Customers. 

• Versapay – In their first 3 months, Versapay saved 4% of their total SaaS, and that grew to 16% within the first year of using Zylo’s SaaS Management Platform and Managed Services. 
• Biogen – After partnering with Zylo, Biogen set a goal to save a million dollars in their first year. “I’m happy to say that we’re well on track to hit that in our first full year of implementation.” Said Keith Sarbaugh, Vice President, IT Infrastructure, Architecture, and Operations.
• Momentive – In 3 years, Momentive canceled 222 applications and saved $7 million on their SaaS stack. 

Steps to Reduce Unused Software & Save Money

SaaS management isn’t an overnight success. It takes practice and programmatic application to see results. How does it help you reduce the amount of unused software in your stack and save money? Let’s look at a few ways it can help.

Step 1: Get Complete Visibility

Reducing unused software and cost savings starts with complete visibility of your SaaS applications, usage, and spend. Getting all that data is imperative. After all, you can’t manage what you can’t see. 

For instance, Zylo’s Discovery Engine is an AI- and machine learning-powered discovery mechanism that finds 100% of an organization’s SaaS software. Even those hidden and miscategorized in expense spend – also referred to as shadow IT.

Leaving any stone unturned leaves your organization open to security and compliance risks, surging costs, and redundant software. Not to mention any information gaps prevent you from making a truly informed decision.

Once you have this visibility and data, you can begin to collect insights and prioritize action. 

Step 2: Derive Meaningful Insights

The next step is to turn these data points into insights and meaningful action. Zylo Insights does this automatically. It surfaces personalized, prioritized, and actionable recommendations to drive your rightsizing and savings initiatives in a single convenient view. Optimization recommendations prioritized by greatest returns mean you can take action and experience savings fast. 

This becomes especially important when it comes to renewal. A quick snapshot, like Zylo’s App Overview, makes it faster to find savings and eliminate software waste. It’ll be your one-stop shop for application insights like adoption, license usage, and even where employees are expensing an application outside your corporate agreement. 

“App Overview is another bold, clean, and easy-to-understand tool from Zylo,” said Josh Ehlers, Software Asset Manager at Instructure. “When Managing a software stack, you must be able to answer questions fast, convey information efficiently, and provide the decision-makers the best possible foot forward in renewal conversations.” 

With your data all together in a single view, you’ll find yourself making confident decisions on your next SaaS renewal – and all year long.

Step 3: Make Informed Decisions

Once you’ve compiled your data, you can begin to regularly examine the most important metrics around your SaaS. 

From a utilization standpoint, how is SaaS being used, by who, and why? Tracking utilization will allow you to answer these questions and indicate opportunities to rightsize or consolidate redundant apps. 

Next, consider how an application is being purchased. Are there employees expensing the tool outside your enterprise agreement? Is it coming from multiple cost centers? Understanding how an app is being purchased could reveal consolidation opportunities.

What’s more, you can bring this data to the negotiation table. Understanding what you actually need and how much you should be spending through benchmarking, you have better leverage with your vendor. You can then work together to hammer out an agreement better suited to your organization. 

Those are just a few metrics you’ll want to pay attention to. At the end of the day, having these data and insights help you make informed renewal and optimization decisions. 

Reduce Your SaaS Spend with Zylo

The ultimate goal of SaaS management is to reduce waste and get the most out of your tech stack. You just need the right tools to make that happen. Zylo is here to help you cut the waste with precision, so you end up with just what you need and more cash in your pocket.

Take a deeper dive into SaaS cost optimization in our resource center. Or, schedule a personalized demo today to experience how Zylo can help you reduce unused software and wasted spending firsthand.