Digital workplace

The problem of SaaS sprawl (and what to do about it)

Published Apr 6, 2022

The fact that software is now ubiquitous in the workplace is nothing new. Even before the pandemic pushed work remote, employees were already collaborating, communicating, planning, and executing more and more in the digital sphere. 

The shift to the digital workplace has brought new opportunities—managers, for example, can leverage analytics to get unprecedented insights into how their employees are working and how best to support them. But it’s also brought new challenges.

Apps for apps’ sake

Consider the ever-increasing number of apps companies are adding to their portfolios (and spending untold amounts on). Between 2018 and 2020, the amount of software as a service (SaaS) apps companies purchased increased 30%. What’s more, the average amount of money companies spent on SaaS products increased 50%. Today, the typical enterprise company spends over $4 million annually on SaaS products and holds a portfolio of over 270 apps

There’s a term for this seemingly never-ending proliferation of apps and the bloated budgets associated with them: SaaS sprawl. It’s a problem that hurts companies on multiple levels beyond merely the financial.   

The risks of an out of control portfolio

There’s no question that a bloated portfolio of internal-facing apps is a needless financial drain on a company. For one, many of these apps go underused, if not totally unused, by the majority of employees they’re meant to help. And when it comes to the apps employees do utilize, it’s not uncommon for some to serve the same purpose and provide equivalent functionality as others already in the tech stack. These duplicative apps have become a hallmark of SaaS sprawl—the average company now has 3.6 such apps in their portfolio. Underuse of apps alongside the existence of duplicative ones signals that a company is paying too much for software and not getting the ROI it should. 

But SaaS sprawl also hurts companies’ finances in less direct ways, especially when it comes to productivity. If different departments or teams are leveraging different apps for similar reasons, they’ll have less visibility into what their colleagues are working on and will be less able to collaborate and communicate effectively. They may also get confused or frustrated when it’s unclear which app to use for which workflow or process. This can lead to growth in support ticket requests and help queries that can quickly overwhelm IT. A confusing app landscape also worsens the employee experience, increasing the risk that individuals and teams will churn. 

“Shadow IT” and the security risk that comes with it

With SaaS sprawl comes the likelihood—especially in larger enterprise companies—that different departments or teams may be buying and using apps that aren’t IT-approved. This phenomenon, known as “shadow IT,” almost always raises compliance and security risks. 

This is true both for the apps companies purchase as well as those they build for internal use—as the growth of “no code/low code” platforms has made it easier than ever for departments to build and use apps IT has no knowledge of. To ensure security and drive governance, IT needs to get a firm handle on the creation and use of unauthorized apps in the workplace. But where should they start?

How to rein in your portfolio and mature your digital workplace

The first step is taking a comprehensive inventory of what’s in a company’s portfolio. A solution such as Pendo Adopt offers robust analytics that lets IT and business technology leaders understand both what apps employees are using and the context in which they’re using them. Once they understand the current state of work, they can define the future goals they want to work towards—retiring a duplicative or underused app, driving better compliance rates, streamlining workflows, or some other end—and empower employees to meet that goal through customized in-app guidance and tailored support measures. They can then repeat the process, further optimizing the state of their portfolio and putting employees in a position to thrive.

With Pendo Adopt, business technology leaders have everything they need to rein in SaaS sprawl—so they can build a mature digital workplace that has systems, processes, and governance in place to drive greater consistency and better business outcomes.

Want to learn more about how Pendo Adopt can help optimize your internal-facing portfolio? Schedule a custom demo today.