SaaS Sprawl - The Ultimate Guide

Sethu Meenakshisundaram

16th August, 2023

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In the SaaS accelerated world, businesses are rapidly adopting SaaS applications like never before. When an organization’s SaaS stack isn’t managed properly, it gives rise to SaaS Sprawl.

In this post, we'll discuss the causes of SaaS sprawl, its problems, and best practices for managing it.

Key Takeaways:

Best Practices to Manage SaaS Sprawl
- Discover all applications
- Bridge the gap between IT and other departments
- Mandate usage policies for applications
- Educate employees
- Centralize SaaS procurement
- Improve onboarding

What is SaaS Sprawl?

SaaS sprawl is the uncontrolled use of SaaS applications within an organization, resulting in increased costs, security concerns, and difficulties in managing and organizing data. It occurs when various departments within an organization independently purchase software applications without proper coordination or approval, resulting in duplication and inefficiencies.

What are the causes of SaaS Sprawl?

Causes of SaaS Sprawl
  • No standardization in the apps category: This gives employees the freedom to choose their own apps, which can lead to duplicate apps, apps with overlapping features, and mismanagement of licenses.

  • Lack of centralized app procurement: When IT is not involved in the app procurement process, or other departments and employees can directly purchase the apps they want, it can lead to the purchase of unnecessary apps. Allowing everyone to procure applications without having a central system gives rise to SaaS sprawl.

  • The abundance of options in the market: There are multiple applications available in the market for every niche work. This can lead to employees signing up for similar applications and using them partially without fully utilizing the available ones. This can also lead to multiple apps with similar functionality.

  • Lack of employee training: When employees are not educated and trained about how to use the applications and when to sign up for any new applications, they may try different applications.

What Problems Does SaaS Sprawl Bring?

  • Security Concerns:
    In a recent survey by Zluri and Pulse, 75% of IT leaders said that the most significant concern from SaaS Sprawl is security. 

    SaaS applications store confidential data, such as financial information, customer records, intellectual property, and more, which needs to be protected from external threats.

    With every new application, it becomes vital to protect business from all security threats so that it doesn't cause security breaches. In case any employee adds any SaaS application that is not secure, there are high chances of data breaches.

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  • Budget Constraints:
    When employees start procuring SaaS applications without checking the existing SaaS stack, it gives rise to the number of SaaS applications in the organization, which could be redundant. As a result, the overall SaaS spend increases.

    It creates difficulties in budget forecasting and cost estimation for the finance department. Hence, it often becomes challenging to manage SaaS spending, and companies often realize they are overspending on SaaS applications until an expert spots this trend.

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  • Compliance issues:
    Organizations must comply with various regulations like FISMA, GDPR, ISO27001, SOC 2, HIPAA, PCI DSS, etc., depending on the service they offer to protect sensitive data. Organizations are completely responsible for compliance-related issues, and failing in it can cost heavy penalties, lawsuits, and business reputation.

    When organizations lose control of their SaaS stack or users' roles are not administered properly, it can expose data to external sources.

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  • Visibility Issues:
    The IT department lacks visibility into the applications that are in use and how they are being used. This ultimately leads to risks associated with Shadow IT.

    • Data breaches

    • Bandwidth limitations

    • System inefficiencies

    • Compliance violation

    • Attack surface expansion

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  • Data management difficulties:
    SaaS sprawl brings data sprawl due to the decentralized distribution of the information with different applications. It becomes difficult for IT to find where all data resides, who has access to it, and how it is exposed.

    For example, an employee who finds Dropbox more convenient for sharing and storing files while the organization uses Google Drive. They may store and share data using Dropbox, which is beyond the purview of the IT department. When the employee gets offboarded, the data may remain in it forever with no chance of recovery.

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  • Operational inefficiencies:
    The presence of more applications creates confusion among employees and IT. It causes delay and inefficiency and affects employees' experience. When employees suffer, so does their productivity and collaboration across different departments.

    For example, when employees store and share data using different SaaS applications like Drive and Dropbox, retrieving this data efficiently when needed becomes challenging.

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Best Practices to Manage SaaS Sprawl

SaaS Sprawl best practices

Discover all applications:

Get a platform that lets you get complete visibility of your SaaS stack across different departments. At first glance, it will give an idea about your SaaS stack and whether all applications are approved or not by IT. You can keep in mind the following points to do a comprehensive audit of your SaaS stack:

  • Check license uses of different applications.

  • Find out the unused licenses by employees.

  • Monitor the network for unknown applications.

  • Find out the different underutilized applications. 

  • Check invoices of all the applications.

  • In each app portal, review the app-specific usage data.

You can find answers to some of the above questions by asking and surveying employees or looking at single-sign-on data. But both methods are time-consuming, and none of them will give you accurate information.

Bridge the gap between IT and other departments:

Let IT interact with employees from all departments to understand their needs and find which application is best suited for the use case. 

IT can also create a separate application consultation panel to eliminate and resolve any doubts of the employees. It can also be used to educate them about the best procurement practices.

Mandate usage policies for applications: 

List different SaaS applications based on the requirements and department's needs. Make it compulsory for employees to only use those applications for specific tasks so that the users cannot purchase duplicate or redundant apps.

Share the apps list with departments and employees so they have information on which apps are already available in the organization.

To understand which app to standardize, you can do the below analysis:

  • Find applications with overlapping features and choose one that meets your organization's needs.

  • Take a survey of employees and understand the pros and cons of different applications.

  • Ask the security and compliance team to review the app and include it only after authorization.

Understand your SaaS stack and find if the new app can integrate.

Educate Employees:

Do regular audits of SaaS applications and understand their usage. IT teams can train new employees to use the applications and understand the efficiency.

By understanding the least utilized applications, IT can provide training to get the best out of the applications. IT should regularly caution employees about the risks of using unauthorized apps.

Centralize SaaS procurement: 

Plan and create a centralized SaaS procurement process in your organization, and only the concerned departments or authorized persons can give access to the application. It'll give you an overview of your SaaS footprint. 

Improve onboarding:

Allocate new employees all the required applications so they won't struggle to find or sign up for unauthorized and risky applications when they need to.

Train and educate them about applications they have been given access to and whom to reach in case they need a new one. Educate them on what's allowed and what's not in the organization.

Zluri’s SaaS Management platform helps discover, optimize, and automate processes. The platform gives you a 360-degree view of your SaaS stack and routes you towards governing access. Avail a Free Personalized Demo.

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