The consequences of SaaS sprawl don’t end with cyber risk

Software isn’t just part of the workplace anymore: It is the workplace. Learn the solution to shadow IT and application sprawl now.

In 2022, one concern is keeping CIOs up at night more than any other: Security. According to Foundry’s 2022 State of the CIO survey, upgrading IT and data security to reduce corporate risk is the top priority for CIOs, and security improvements are the top factor driving tech budget increases.

It’s not hard to understand why. Since March 2020, IT departments have scrambled to accommodate companies’ accelerated shift to hybrid and remote work models in response to the pandemic. With that shift to remote, software went from being just one element — albeit an extremely important one — of the workplace to becoming the workplace itself. That transition brought an overwhelming amount of requests by both departments and individual employees for new digital tools to use. It also led to the growth of “shadow IT” — when different departments or teams buy and use apps without the approval or knowledge of IT.

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This problem of “SaaS sprawl” — an unchecked proliferation of apps both authorized and unauthorized — has clear and significant implications for a company’s security. But the repercussions of having a company overloaded with software don’t end there. On multiple levels, from hindering productivity and collaboration, to hampering growth and worsening employee churn, SaaS sprawl poses a clear and distinct threat to businesses and their operations.

More software, more problems

When a company’s internal app suite becomes bloated, it puts an unnecessary financial burden to the organization. Today, the average enterprise company holds over 270 apps in its portfolio and spends over $4 million annually on SaaS products. Too many apps means too few employees are using them in the ways intended, which in turn means a company is nowhere near realizing its ROI on its software suite.

For one, there’s the problem of duplicative apps — apps that serve the same purpose or perform the same function. Companies now have an average of 3.6 such apps they’re paying for. Beyond the obvious wasteful spending that the presence of duplicative apps indicates, it also hurts a company’s performance in less direct but still important ways.

Consider employee productivity. If a company has two or more apps in its suite that serve the same purpose, individuals and teams are probably using different apps to complete the same tasks, or tasks that are part of the same workflow. This inherently hinders collaboration, because it means that employees have less visibility into and understanding of what their colleagues are doing and how.

It also leaves employees vulnerable to confusion and frustration over which is in fact the correct app to use in a given situation. Here companies have to be especially careful. As the workplace has shifted to digital spaces, software now plays a paramount role in shaping the employee experience. And employees who feel confused and overwhelmed by a sprawling app portfolio are at higher risk of churning. As the so-called Great Resignation continues to roil the business world, companies need to take every step possible to cultivate a positive employee experience and keep their teams happy. That means reining in an out-of-control portfolio and putting employees at the center of business tech decisions.

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How to stop the SaaS sprawl creep

As we’ve seen, business leaders are under real pressure to minimize employee churn. They’re also under greater scrutiny from investors and other stakeholders for delivering ROI on the software they’ve spent so much on. And yet too many companies have no sophisticated way of understanding what software is helping employees or which applications employees are even using.

Luckily for them, there’s a way forward, and it starts with a digital adoption platform. These are platforms layered on top of other software products that provide users context, guidance and support as they navigate the product on the front end. At the same time, they give IT and business technology teams robust analytics on the back end to understand the flow of work across apps and across time.

Once IT understands how work is happening today, it can plan future goals — such as retiring underused and/or redundant apps, streamlining workflows or driving governance — and support employees as they work toward those goals with customized in-app guidance and support. In short, digital adoption platforms let business tech teams see which software investments are driving success and how to leverage that knowledge to create the most optimal software plan. They’ll then be in a position to vanquish SaaS sprawl once and for all.

Tatyana Mamut, SVP of New Products at Pendo, is a transformative leader in Silicon Valley who drives innovation by understanding customers deeply and leading through empathy. She is a serial entre/intrapreneur, building successful products at Amazon, Salesforce, Nextdoor and IDEO. She has a PhD in cultural anthropology from UC Berkeley and a BA in economics from Amherst College and she lives with her spouse and two daughters in San Francisco.