The SaaS Sprawl Problem
The average mid-sized company runs 130+ SaaS applications. Most employees use 5–10 of them regularly. The rest — bought during a sprint, added by a consultant, or acquired through acquisition — collect dust while billing continues.
A 2024 Productiv study found that 43% of SaaS licenses in the average enterprise go unused. That's money burning every month.
Step 1: Build Your SaaS Inventory
Before you can cut, you need to see. The fastest way to discover your full SaaS stack:
- Review bank statements — Filter for monthly recurring charges. SaaS subscriptions show up consistently.
- Check SSO provider — Okta, Google Workspace, or Azure AD show every app your team has logged into.
- Survey department heads — Finance, Marketing, Engineering, and HR all buy software independently.
- Check browser extensions — Many SaaS tools are accessed as browser extensions that IT never sees.
Build a spreadsheet with: tool name, monthly cost, owner, number of active users, contract renewal date.
Step 2: Calculate Utilization
For each tool, measure:
- Active users (logged in last 30 days) vs. licensed seats
- Core feature usage — Are teams using advanced paid features, or just the basics?
- Overlap — Where do you have two tools doing the same job?
Tools to help: Productiv, Zylo, Torii, or Zluri can pull utilization data from SSO logs automatically.
Step 3: Categorize and Prioritize
Sort every tool into three buckets:
Keep (mission-critical): Tools the business can't function without. Don't touch these — focus on optimizing their contracts instead. Optimize (used but overpaid): Tools with active users but over-purchased seats, or where a cheaper alternative exists. Eliminate (unused or redundant): Tools with <20% active usage, or where another tool already covers the use case.Step 4: Common Redundancies to Find
Project management: Many companies have Jira AND Asana AND Monday.com running simultaneously for different teams. Consolidate. Communication: Slack + Teams + Zoom Chat. Pick one internal messaging platform. Analytics: Google Analytics, Mixpanel, Amplitude, and Heap all doing similar things. One comprehensive tool beats four overlapping ones. Storage: Dropbox, Google Drive, and OneDrive all active. Standardize. Video calls: Zoom, Teams, and Google Meet all licensed. Teams usually only use one.Step 5: Negotiate Renewals
Most SaaS contracts auto-renew with a 30–60 day cancellation window. Set calendar reminders 90 days before every renewal. Then:
- Pull your actual usage data before the conversation
- Request a right-sizing proposal — ask to reduce to actual active seats
- Get competitive quotes — even a quote you don't intend to use gives you leverage
- Ask for multi-year pricing — 2-3 year commitments often unlock 20–35% discounts
- Time it to their fiscal year-end — Q4 for most US vendors
Quick Wins (Do These Today)
- Cancel any free trials that converted to paid without review
- Remove ex-employees from all SaaS licenses immediately (automate this with Rippling or BambooHR offboarding)
- Downgrade annual plans where usage has dropped
- Consolidate individual plans onto team plans (often cheaper per seat)
Expected Savings
Companies that run structured SaaS audits typically find:
- 15–25% immediate savings from unused licenses
- 10–20% additional from consolidating redundant tools
- 5–15% from renegotiating renewals with utilization data
Combined: 30–60% of current SaaS spend is often recoverable without any productivity loss.