How to Stop Shelfware from Draining Your Business Budget

Have you wondered why your software budget continues to rise and the usage remains stagnant or goes unmonitored? If so, you’re not the only one. Deep within your IT stack is one of the greatest underestimated threats to your tech budget known as shelfware. These are unused or underused software licenses that continuously drain resources every month. While shelfware may initially look minor, its accumulative effect can be large, especially if you are an enterprise or growing business.

Let’s examine the impact of shelfware on business software budgets and discuss strategies to recover that waste.

What Is Shelfware and Why Should You Care?

Shelfware are software subscriptions that an organization buys but does not fully use or deploy. This phenomenon is alarmingly common, and reports have shown where organizations spend a lot on their software budgets in shelfware. In addition to wasting money, shelfware puts an additional administrative workload raising security concerns.

The IT budget drain from shelfware occurs because organizations often buy licenses “just in case” they might be needed or fall victim to sales incentives offering discounts on large purchases. Without appropriate monitoring, these licenses develop, creating a financial waste that offers no return on funding.

The Impact of Shelfware on Business Software Budgets

Ignoring shelfware can severely affect your business. Here’s how shelfware negatively impacts your budget:

1. Wasted License Fees

When licenses go unused, companies pay for software that has zero value. These costs increase gradually, limiting ROI on software investments.

2. Missed Optimization Opportunities

Without a usage visibility, an organization may continue to pay for higher tier license plans unnecessarily. It can be difficult to right-size licenses or remove redundant tools without precise information. This prevents efforts from optimizing software spending and operational efficiencies.

3. Increased Compliance Risks

Licenses that are not active may still have provisioning with access to important data which can become a risk unless rectified. This results in non-compliance concerning protection and software licensing regulations.

4. Inaccurate Budget Forecasting

Shelfware distorts application usage and can make predicting future software needs challenging. Also, budget plans based on outdated license counts can cause overspending and undermines cost control efforts.

5. Inconsistent Data

Data may be dispersed over several forms and places by various departments using different tools for the same objective. This makes it difficult to properly aggregate and evaluate information, which affects the quality of business insights and causes mistakes in reporting and decision-making.

Best Ways to Reduce Shelfware and Optimize SaaS Spending

It is important that you build a robust plan for shelfware reduction into your SaaS optimization efforts. Here are some top strategies for reducing shelfware, and optimizing SaaS spend:

1. Conduct Regular SaaS Audits

Regular audits are essential to identify non-used or under-used software across the company. They ensure that every tool you’ve purchased is achieving value where savings can be made. Also, using shelfware detection software can guarantee that your SaaS environment is efficient and cost-effective.

2. Align Purchases with Team Needs

Before buying a tool, discuss with various teams to understand their specific demands. This guarantees unnecessary investment on tools that don’t fulfil actual business needs and supports a clear operational purpose.

3. Deprovision Inactive Users Automatically

When an employee leaves the organization, it is essential to automate the removal of inactive user accounts. This way you can ensure that only active employees have permission to paid services and strengthens SaaS security by limiting unsanctioned access to business systems.

4. Implement License Reclamation Policies

Formalizing a policy for reclaiming un-used licenses give organizations the ability to transfer or repurpose licenses from departing team members. This prevents wastage and can help with more successful software license management without additional spending.

5. Consolidate Redundant Applications

Most organizations pay for multiple applications that essentially do the same functionality. Finding and combining overlapping software, lowers expenses and makes user training easier. It also increases the effectiveness of IT management.

6. Centralize Software Procurement

Centralizing your software procurement process will prevent departments from buying isolated or duplicate purchases. This improves visibility into all available software and supports better compliance and usage tracking.

7. Negotiate Flexible Contracts

When negotiating with vendors, ask for agreements that will allow you to increase and decrease your licenses based on actual usage. Flexible terms minimize the risk of over-committing to unused capacity and improve budget control over time.

8. Review and Optimize Subscription Services

Consistently review features associated with your subscriptions to guarantee they still meet organizational goals efficiently. According to Gartner, organizations can cut spending on software by as much as 30 percent by implementing license optimization best practices.

Optimization may involve downgrading plans, eliminating unnecessary add-ons, or simply switching to a more cost-effective alternate option. Doing this can increase the value of every SaaS investment.

9. Educate Employees on Software Usage

Training employees on how and when to use approved software will improve SaaS adoption and value realization. Also, awareness campaigns can deter shadow IT and promote the best use of the available resources contributing to better workflow.

Say Goodbye to Shelfware and Hello to Smarter SaaS Management!

Are you searching for a simple and powerful method to manage your SaaS licenses and eliminate shelfware completely? CloudFuze’s SaaS Management Platform provides an all-in-one solution to discover, manage and secure, your SaaS applications. Our team of experts can provide ongoing support and help you to continuously optimize your SaaS environment and prevent shelfware from re-entering.

Get in touch with us today to schedule a personalized demo!