What is SaaS Sprawl and How to Effectively Manage SaaS Sprawl in Your Organization
May 2, 2023
What is SaaS Sprawl?
According to a recent report by Gartner, global SaaS investment is projected to reach $195 billion in 2023, representing a 16.8% compound annual growth rate.
With the rise of cloud-based technologies, businesses of all sizes are turning to SaaS applications to streamline workflows and enhance productivity. However, with this increased reliance on SaaS apps comes the risk of SaaS sprawl – the uncontrolled spread of SaaS tools across an organization, leading to financial, security, and productivity risks.
In fact, a report by Productiv discovered that only 45% of company apps are used on a regular basis, and 56% of all apps are shadow IT. This lack of centralized management leads to SaaS sprawl, causing a host of issues that can negatively impact a business's bottom line.
To help businesses understand the risks associated with SaaS, we have created this guide on understanding SaaS sprawl and ways to manage it, as well as offer insights into the tools and technologies that can be used to streamline and manage multiple tools effectively.
Whether you're a small business owner or an IT professional, read on to understand the world of SaaS and help you navigate the risks associated with SaaS sprawl.
The ascent of cloud-based technologies has fueled the explosive proliferation of SaaS applications. These ingenious tools equip businesses with cost-effective, adaptable, and user-friendly solutions for streamlining diverse aspects of their operations - from marketing and customer relationship management to accounting and finance.
However, complications arise when the number of these applications proliferates uncontrollably, leading to a chaotic and costly situation commonly referred to as SaaS sprawl. This issue emerges from overlapping functionalities, redundancy, and organizational disarray caused by excessive and unmanaged usage of multiple software solutions.
A lack of centralized oversight can further exacerbate expenses while dampening efficiency as tracking usage becomes increasingly laborious. Moreover, unauthorized app adoption - or shadow IT - can heighten security risks and spawn compliance challenges.
Cracking the code on managing SaaS sprawl is pivotal for averting potential hazards tied to multi-app environments. Businesses should embark on a thorough SaaS audit journey that involves identifying all active apps and evaluating their respective usage patterns and costs before consolidating or pruning down duplicate functionalities - a feat that ensures streamlined application landscapes.
Causes of SaaS Sprawl
The meteoric rise of SaaS applications has transformed the landscape of modern business operations, offering a plethora of advantages that organizations can't resist. However, this ever-increasing popularity comes with its own set of challenges - one being an increased risk of SaaS sprawl. The added risk stems from a multitude of reasons:
Lack of Centralized Management
A key contributing factor to SaaS sprawl is the elusive centralized management for these applications. In a world where multiple teams and departments adopt diverse tools, tracking usage patterns and expenses becomes an intricate dance.
Often, procuring and implementing SaaS applications occur without proper oversight or blessings from IT departments - resulting in an unbridled expansion that spirals out of control. This decentralization further complicates matters concerning access and permissions, turning user account management and data security into formidable challenges.
Consequently, businesses grapple with a convoluted network of SaaS applications riddled with financial, security, and productivity hazards.
Another catalyst for rampant SaaS sprawl lies within overlapping functions between apps. As companies flourish, they accumulate new solutions to meet emerging needs - sparking redundancy and bewilderment in their wake.
For instance, numerous SaaS providers may offer strikingly similar features like email marketing or customer relationship management capabilities - breeding confusion while rendering certain tools superfluous.
This overlap leaves employees juggling multiple apps; learning varied workflows; managing disparate datasets - all culminating in diminished productivity levels. Moreover, redundant functionalities across different platforms inadvertently inflate expenses as organizations pay for unused features and licenses they don't genuinely require.
Employing Shadow IT
Shadow IT is the use of unauthorized applications by employees without the approval or knowledge of IT departments. This can lead to an overabundance of SaaS tools across an organization, as different business departments use multiple applications to meet their specific needs.
These unauthorized applications may not be secure or compliant with regulations, so shadow IT can also pose a security risk. The use of unauthorized applications can also result in information security incidents, such as data breaches and cyberattacks, since these applications may not be as secure as authorized ones.
Another driving force behind SaaS sprawl is vendor lock-in—a situation where businesses find themselves trapped due to the daunting task of migrating data and workflows elsewhere. Consequently, organizations face increased expenses and are forced to continue using platforms that no longer cater to their evolving needs.
This entanglement hampers innovation and adaptability, limiting companies by the capabilities offered by their current platform alone. Ultimately, this poses a risk of decreased productivity and competitiveness in response to ever-changing market conditions or technological advancements.
Impact of SaaS Sprawl
While SaaS offers numerous benefits, the uncontrolled growth of SaaS tools can have a significant impact on businesses. In and of itself, SaaS sprawl can impact companies in several ways.
One of the most significant impacts of SaaS sprawl is its financial implications. Because of SaaS sprawl, businesses may find it challenging to track expenses and manage costs effectively.
The use of redundant or unnecessary applications can lead to increased expenses, and the inability to track spending can complicate budget allocation. SaaS apps may end up costing businesses more than they need to.
SaaS sprawl can also impact privacy and security. With each new app, there is an increased risk of cyberattacks, particularly if these applications do not have the same level of security as other applications.
Furthermore, the use of unauthorized applications by shadow IT can increase security risks. It is possible that these applications are not secure or comply with regulations, and losing control may affect procurement teams, IT teams, and processes across a number of departments.
Productivity takes a serious hit with SaaS sprawl. The constant context switching among SaaS tools results in confusion and redundancy, making it difficult for employees to manage workflows and processes effectively.
Each application may have its own unique interface and workflow, leading to a lack of consistency and increased training requirements. This leads to an inefficient work environment and increased frustration as employees struggle to manage their workload effectively.
Best Practices for Managing SaaS Sprawl
The meteoric rise in the adoption of Software as a Service (SaaS) has fundamentally transformed the landscape of modern business operations. However, with this incredible technological leverage comes an amplified obligation to manage your SaaS portfolio effectively. To help you navigate this complex terrain, we offer a range of ingenious strategies designed to tackle and master the intricate challenges posed by the phenomenon known as SaaS sprawl.
Conducting a SaaS Audit
Initiate your journey by conducting a comprehensive SaaS audit. Uncover every hidden gem within your organization's arsenal, evaluate usage patterns, and assess expenses. This grants you visibility into your digital domain while unveiling opportunities for consolidation and cost reduction.
Consolidating and Streamlining
Armed with knowledge from the audit, identify overlapping functionalities across applications and fuse those bearing striking similarities. The result? A streamlined app landscape that eliminates redundancies while enhancing efficiency, productivity, and cost management.
Setting up a SaaS Procurement Plan
Design an elegant procurement strategy as you acquire new software solutions - a crucial component in preventing uncontrolled expansion and minimizing risks associated with sprawl. Engage all relevant stakeholders to ensure seamless integration between chosen providers' offerings into existing workflows without inadvertently contributing to the sprawl phenomenon.
Establishing Guidelines and Policies
Establish crystal-clear usage guidelines alongside policies governing procurement processes for effective cost management. These measures also address data security concerns ensuring privacy remains uncompromised. Department heads can propagate these principles throughout their teams via proper training initiatives.
Providing SaaS Training
Knowledge is power; thus, diligently educating employees about optimal usage practices holds paramount importance in managing unruly growth effectively. By offering ample support for utilizing various tools efficiently, organizations reduce shadow IT occurrences while bolstering security measures - all culminating in soaring productivity levels.
Using Tools for SaaS Management
Enterprises can tap into the power of dynamic SaaS management platforms to tame the wild growth of software applications. These vibrant tools boast an array of features and capabilities, enabling businesses to pierce the veil over their SaaS ecosystem, optimize expenses, and fortify security measures.
For instance, Admina emerges as a trailblazing SaaS management platform that helps organizations unmask hidden instances of shadow IT lurking within their infrastructure - spanning from ERPs and accounting software to clever browser extensions.
With Admina's keen eye on employee SaaS accounts sorted by roles and license records, businesses can delve deep into their application usage patterns. This newfound knowledge empowers them to unlock productivity gains while keeping costs in check.
Mastering the art of managing burgeoning SaaS solutions is crucial for reaping all benefits without inviting unwanted consequences upon your thriving business venture.
Should You Use a SaaS Management Platform?
Investing in SaaS can be costly, so it's understandable if your business is considering a solution. A SaaS management platform can be a valuable tool for organizations looking to manage and optimize their use of SaaS applications.
To determine if your organization needs a SaaS management platform, consider the number of SaaS applications in use, the complexity of managing access and permissions, and the level of oversight and control needed over SaaS usage. If your organization is struggling in any of these areas, a management platform may be a valuable investment.
A SaaS management platform can offer a consolidated perspective of all applications and their corresponding expenses, enhance security by detecting and managing shadow IT, assist in controlling access and permissions, and, ultimately, simplify and streamline processes, decreasing overlap and duplication. This can contribute to enhancing efficiency and productivity in an organization.
The Bottom Line
SaaS sprawl has swiftly emerged as a pressing concern for enterprises across the spectrum. The unchecked proliferation of SaaS applications can trigger spiraling expenses, dwindling productivity, and looming security perils.
By grasping the nuances of SaaS sprawl and embracing best practices to manage an intricate SaaS landscape - as explored in this guide - organizations can reclaim control over their cloud services usage while enhancing operational efficiency.
Among the most potent solutions to conquer SaaS sprawl lies in leveraging a robust management platform like Admina. This versatile all-in-one powerhouse uncovers shadow IT and SaaS apps throughout your organization equips you with tools to orchestrate account access seamlessly, and offers invaluable insights into your spending patterns.
Book a demo with us today and discover how our platform can revolutionize your approach to optimizing SaaS management.
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