Over the course of the 2010s, corporate adoption of cloud productivity services skyrocketed. This meant that by the end of 2020, entire C-level teams were in for a rude awakening: spend on SaaS (Software-as-a-Service) subscriptions had increased with little control. Budgeting on SaaS spend became a matter of pricing without any real analysis being done on the multi-layered spending structure, revealing an overlapping set of dormant subscriptions and underused licenses. One global retailer thought it paid $80 million for 220 known SaaS apps – until an audit set the record straight. Analysts proved that the retailer was actually spending 262 million on IT assets (3.3X the assumed 80M), spread across 498 applications. Overly, only 28% of those licenses were actually used. In total, the team exposed $ 5.5 million worth of savings by canceling needless SaaS tools and licenses, along with stopping autopay renewals. This startling finding, achieved through prudent management of SaaS expenses, illustrates the unchecked reality of SaaS sprawl: the potential to mask monumental costs.
Example case: a global retailer hired specialized consultants to audit their SaaS subscriptions. The consultants uncovered hundreds of previously unnoticed subscriptions and associated expenses. Armed with this data, the firm’s executives were able to significantly reduce operational costs by contract renegotiation, app consolidation, and retiring unused applications. In this case, duplicative services were identified by metered license analytics and cost-optimization tools. They discovered almost five hundred active applications – more than double what was estimated. By comparing expenditure logs against actual utilization, they attributed $1.6 million to license mismanagement, $1.9 million to price benchmarking on unused apps, and another $2 million by eliminating over one hundred unmonitored, auto-renewing subscriptions. Such rationalization and governance provided a yield of 3.3 times return on their efforts in merely a few months.
No wonder analysts expect continued double-digit growth in SaaS spending, even while tech budgets shrink. IT leaders stand to gain millions by surfacing hidden expenses and rightsizing licenses. In this article, we highlight healthcare and fintech along with education and retail, showcasing the massive savings and how executives can apply those strategies.
Real world cases
Case study: ModMed
Such extreme outcomes are not unique. Over entire industries, intelligent IT departments have leveraged oversight over software as a service to sculpt profitable playbooks. Take ModMed, a growing IT firm in US healthcare. Faced with sprawling software silos, ModMed’s CIO confessed managing licenses by spreadsheet was “like playing Whack-A-Mole.” The IT VP described data completeness as a chase, chronicled hours going after incomplete data sets, devoid of logic. With dedicated SaaS management structures, ModMed discovered 224 applications in need of centralized management. Automated reclamation workflows yielded the recovery of 2800 unused licenses, cutting needless subscriptions. The outcome: 1.4 million in cost avoidance instantaneously by disabling excess seats. Simultaneously, corporate policy enforced uniform credentialing policies reclaiming 156 applications governed by single sign-on, a compliance win strengthening security while barring rogue applications. In addition ModMed rescinded 122 completely dormant applications, slashing another 1.6 million recurring costs. All together, the MedTech provider avoided 3 million in SaaS spend and established an ongoing programmatic process for license revocation. There were real operational gains as well. With automation of license deprovisioning, IT workload was slashed transforming the once manual chaotic game streamlined revocation system scalable to provide avoidance of future costs. A single authoritative source now supports, as the CIO observed, timeliness and accuracy for data that took days to compile manually after iterative saplings.
Case study: Versapay
Like other industries, Fintech is undergoing digital transformation. Collaborative accounts-receivable software company Versapay, for instance, discovered it was overspending on SaaS services during a merger-spree in 2021. Former IT head Ryan Johnson remembers seeing duplicate subscriptions and runaway personal card spending on SaaS tools within days of joining. His first task was to untangle messy and outdated Excel pivot tables, which predicted headcount growth faster than spreadsheets could keep up. By merging with a SaaS management platform, Versapay was able to gain visibility into every subscription—even the ones hidden in acquired companies. This uncovered a 30% overspend in SaaS spending. Combined with policy enforcement on IT-software, portal restrictions, and app rationalization, the IT team made substantial cuts on spending. Within three months, Versapay reduced overall spend by 4% and by the end of the first year, total spend was down 16%. Savings from rationalizing licenses provided an additional 5% reduction by aligning user-seats and removing excess tools. These SaaS efficiency improvements resulted in a stunning 200% ROI within 90 days.
As Johnson points out, revealing shadow IT was the initial pivotal step: “When you grow that way and that fast, there aren’t always processes set up… I knew there would be a lot of duplicative software, as well as software people bought on a credit card and forgot about,” he elaborates. In summary, effective SaaS management turned Versapay’s vast portfolio assets into a streamlined, compliant stack, and recaptured hundreds of thousands of dollars in excess spending long before contract renewals.
Case study: Tangoe
There are other sectors beyond manufactured goods recognizing these results. For one company in the transportation segment of the manufacturing sector, the focus shifted to their largest SaaS vendors first. After employing Tangoe for telecom savings, their IT department sprang into action analyzing Microsoft 365 and Salesforce services. Within weeks, analytics revealed 1,574 licenses eligible for reallocation or downgrade adjustments. Furthermore, a significant number of Microsoft E3 seats were over-provided, and a large portion could be transitioned to or downgraded to E1s. Several stale Adobe and Salesforce accounts went unaccounted for. This allowed them to recapture $183,872 for the company within one year. Most importantly, the manufacturer now understands which contracts are on auto-renew, and which applications remain unused. Streamlined processes bolster security by reducing orphan accounts and sluggish user elimination. As the IT systems analyst put it, “With less SaaS waste and more productivity, we’ve achieved ROI within one year.” Thus, this still proves the same core premise: automated governance paired with enhanced visibility not only liberates capital but also de-risks the ecosystem by curbing net unauthorized applications and entitlement controls tighten over users.
Case study: Education K-12 School District
Education K–12 School District: No industry is safe from the spread of SaaS. One K–12 example showed an IT director discovering orphaned accounts on prominent services. Slack and Zendesk, for instance, were not closing off staff user accounts after they left the organisation. Easing onto those accounts would have cost the district $15,000 in a year. Through automated off-boarding workflows tied to an HR system or identity tools, those gaps were closed. As the director said, “without automation, Slack accounts remained active for days” after exits. Now, moving someone to an “alumni” group automatically disables and purges associated service accounts. That district also used BetterCloud to perform file sharing audits and found 800,000 files on Google Drive that were shared far too liberally. With one command, changing permissions to private removed access for unauthenticated users. Altogether, BetterCloud’s optimisation spend features greatly reduced these educational institutions’ data leaks while also cutting down thousands of wasted licenses. The key takeaway is that even a small IT team can deliver significant value through automated deprovisioning and auditing.
Every one of these case studies shows measurable results: recovering millions, reducing hundreds of legacy applications, and a reduction in spend by double-digit percentages. They also have common themes: collaboration, automation to eliminate manual spreadsheet work, and powered decisions based on data. Most importantly, reinforcing governance on top of saving money was an added perk. Enhancing some of the apps that were concealed plugged the expensive security holes – a recent investigation by the SEC has fined banks for untracked messaging platforms. To summarize, managing SaaS strategically not only helps control spending but also enhances risk management and compliance.
Analyses
In every sector, uncontrolled SaaS spending is an example of a “silent budget drainer.” Research supports these narratives; on average, enterprises waste over one-third of their SaaS budgets on idle licenses and/or redundant tools. Specifically, in the financial sector, analysts believe U.S. companies waste over $30 billion a year on unused software. Practically speaking, the waste is often caused by hidden “shadow IT.” As one security vendor notes, employees will circumvent officially sanctioned channels when they are too slow to respond because these unofficial tools are too slow to respond. Such unsanctioned applications may, unfortunately, contravene data policies and invite regulatory action. Most notably, recent SEC probes have fined banks for not preserving records of conversations held on employee-selected messaging platforms. To summarize, gaps in oversight for SaaS management can create tangible corporate governance, legal, financial, and compliance risks.
The case studies demonstrate how risks occur. Versapay’s top IT executive noted that when he “stepped into” the merged company, he encountered numerous redundant subscriptions and unauthorised credit card transactions. Another case came from a global retailer that was unaware a myriad of SaaS costs exceeded their estimates by three times. Lack of visibility seems to always result in blind spots. In all these cases, blindness was actually the result of a lack of centralisation. Automated discovery made through SSO and proxies, expense scanning, or direct API integration provided the centralized truth executives highly sought. Once data was clear, leadership was free to enforce new policies, such as the ones implemented by ModMed, in which deprovisioning workflows were enacted, recovering 2,800 license seats and sustaining funds that had been lost, continuously spent, unguided.
SaaS optimisations often provide immediate ROI. For example, CFOs of both Versapay and ModMed were able to renew contracts with a 5-10% savings promise. In reality, only a small number of top-tier licenses are expensive and most savings come from slashing redundant subscriptions. Consider the audit performed by the financial firm: they discovered that removing one overlapping SaaS product resulted in a million dollars of annual savings. A retailer managed to save $5.5 million just through eliminating unnecessary subscriptions and negotiating their license count. These profit figures provide an unrefuted argument for C-level managers: even the smallest gains achievable via SaaS management overshadow the cost of employing a dedicated management platform, staff, or even the time spent doing it internally.
At the same time, the advantages go beyond cash. Improved governance and security emerge as major themes. The K-12 District’s Director mentioned that turning off unused accounts “was not only important from a security perspective, but from a financial one as well.” The IT shop prevented off-boarding fraud and ensured compliance with student-data privacy regulations, eliminating potential attack vectors. From the procurement standpoint, maintaining a consolidated SaaS inventory offers enhanced contract leverage and audibility. No CISO or CFO hopes to be caught off guard by an audit revealing unaccounted-for licensed assets. As one consultant warns, “finding where shadow IT exists” during a tech stack audit is the most crucial first step. This aligns with best practices from FinOps and ITAM: administering SaaS as you would with any other capital expenditure—monitoring, valuing, and zeroing out when unnecessary.
SaaS Optimization Framework
With the 2022 technology driving shift, companies started implementing systematic SaaS optimisation frameworks for controlling software spending as well as improving operational effectiveness. One of the key approaches was to implement automated discovery, such as Microsoft Entra and SaaS application usage tracking. This gave complete coverage over all SaaS applications as well as user activities within an organisation. So, IT could not only see the redundant applications but also identify shadow IT globally. Along with this, AI-driven analytics provided cost reduction pointers through licenses with low usage, and accounts that had not been active for a significant time or had been associated with terminated employees. In a bid to enable better decisions concerning license reallocation or termination, they enabled driving campaigns targeting the least active users offering licenses. Through this, they unplugged several unnecessary SaaS applications to increase cost savings while improving cross-industry compliance.
Recommendations:
To combat the mounting risks and inefficiencies of unmanaged SaaS growth, organisations should take immediate steps to implement structured SaaS Expense Management.
First, establish centralised visibility across all subscriptions using integrated platforms that combine identity management systems (IMS), such as Microsoft Entra or Okta, with cybersecurity observability tools, like CrowdStrike. These tools enable IT and finance teams to uncover shadow IT, automate off-boarding, and track real-time license utilisation.
Second, deploy automated workflows for license reclamation, contract benchmarking, and off-boarding based on HR triggers to ensure that no subscriptions persist beyond their intended use.
Third, IT leaders should collaborate with procurement and compliance stakeholders to use this data to renegotiate contracts, consolidate duplicative apps, and drive smarter spend. It would be greatly beneficial if your SaaS Expense Management tool supports these activities by having the ability to run campaigns, greatly automate the process. By integrating FinOps and ITAM principles and embracing automation, organisations can unlock immediate savings, improve their security posture, reduce audit risk, and reclaim operational bandwidth, turning SaaS from a cost liability into a governed, high ROI asset.
Conclusion
In tandem with the rapid adoption of enterprise SaaS, managing expenses strategically has become essential for every executive. The case studies above illustrate the potential oversights can recover millions; from a school district’s $15K discovery to global multi-million dollar savings. The ecosystem benefits scale exponentially. Every app decommissioned translates to fewer security risks – less firefighting – and less administrator workload. Each contract renegotiation yields greater funds available for strategic innovation far surpassing simple ensnarement and dependency on license fees. Watered-down: focused governance translates into disciplined SaaS stewardship which fosters unparalleled operational excellence. The entire sprawl mindset poses clear dangers to CIOs, CTOs, and CFOs dedicated to squeezing every last drop of ROI from investments and spend. The outlook, however, does clarify: ignoring SaaS sprawl is perilous. A storm brews: the effort controls are set to tame the storm’s wrath is up to companies. Provided the right SaaS controls are instituted, firms can expect systems to backfire and channel overwhelming efficiency instead. With trust in software expenditures regained, executives can repurpose shadow IT from burden into abundant opportunity. Margins have taken a hit; unchecked subscriptions cannot be compounded-acting is imperative now.
Implementing these recommendations enables organisations to realise significant savings, transforming SaaS from a cost centre into a strategic resource, safeguarding effective expenditures and appropriate governance of systems in this cloud-centric era.
