How to Identify and Eliminate Unused SaaS Licenses in Your Organization?

Have you ever wondered how much money your organization spends on unused SaaS licenses? Organizations subscribe to numerous SaaS tools but find it difficult to track their actual use, leading to, lots of unnecessary expenses. Without an appropriate SaaS license management strategy in place, companies end up paying more on subscriptions.

The first step towards the improvement of SaaS spends is to assess how SaaS applications are being used. Reduction of redundant SaaS subscriptions puts an organization in a good position to significantly decrease it’s spent on SaaS licenses.

This article will explore about the practical steps to finding and eliminating unused SaaS licenses, optimizing SaaS spend and streamlining your SaaS portfolios.

Understanding the Impact of Unused SaaS Licenses

Unused SaaS licenses refer to software subscriptions that organizations continue to pay for but are not actively utilized by employees. This often occurs due to employee turnover, redundant applications, or inefficient license allocation. Without proper oversight of SaaS usage, organizations may accumulate excess licenses, leading to unnecessary costs and wasted resources.

The complexity of managing SaaS licenses carries significant financial implications. Ineffective SaaS management can cost companies thousands to millions of dollars annually. According to Fortune Business Insights, the SaaS market is expected to surpass $800 billion by the end of the decade.

Additionally, unmonitored SaaS usage poses security risks and compliance challenges, particularly when former employees retain access to business data. To address these inefficiencies and establish effective SaaS financial management, organizations need a structured and proactive approach.

How to Identify Unused SaaS Licenses

To assess adoption and eliminate unused SaaS licenses, organizations need a systematic approach. This involves a combination of technical analysis and thorough review of organizational data. Here are the key steps in the process:

1. Conduct a SaaS Audit

A SaaS audit is essential for identifying all software subscriptions within an organization. This process includes compiling a comprehensive list of SaaS applications, analysing active user engagement, and reviewing contract terms. By conducting regular audits, companies can determine whether employees are fully utilizing the software, identify redundant applications with overlapping functionalities, and eliminate unnecessary expenses.

2. Leverage SaaS Usage Monitoring

By analysing employee usage patterns, organizations can gain valuable insights into which SaaS applications are actively utilized and which remain idle. SaaS inventory management platforms offer detailed usage analytics, including login frequency, feature adoption, and user engagement levels. These insights enable organizations to make informed decisions about software optimization, helping to eliminate redundant licenses and reduce unnecessary costs.

These allow organizations to use SaaS usage monitoring tools and make informed, data-driven decisions to optimize their software portfolio and to manage Saas applications effectively.

3. Identify Redundant SaaS Subscriptions

Redundancy is a common issue in SaaS environments, as varying teams or departments may subscribe to different overlapping tools without coordination. Businesses should therefore work on consolidating applications with similar functionalities such as those used by different departments to eliminate the hidden costs of unmanaged SaaS subscriptions and thus, simplify operations.

4. Evaluate License Utilization

Organizations must analyse their SaaS license usage to determine whether they are overpaying for unused licenses. For example, if a company subscribes to 500 seats of a SaaS tool but only 300 employees actively use it, reducing the license count can lead to significant cost savings. Regularly reviewing and adjusting subscriptions ensures optimal resource allocation and prevents unnecessary expenses.

Strategies to Eliminate Unused SaaS Licenses

Once unused SaaS licenses have been identified, a structured approach is needed for their elimination and for a successful SaaS license management. This prevents further financial loss, optimizes software spending and improves overall operational efficiency.

1. Automate SaaS License Management

Manually tracking SaaS programs is time-consuming and prone to errors. Automating SaaS license management helps organizations maintain visibility over their portfolio and ensure optimal resource allocation. SaaS management platforms give you a view into real-time license usage and allow for rapid automatic de-provisioning of unused accounts.

2. Optimize License Allocation

Companies need to be proactive and allocate licenses based on the actual needs of each individual employee instead of buying a bulk option for the entire company. A request-based licensing model ensures that licenses are available strictly to those who need them, avoiding excess expenditure.

3. Establish Renewal Tracking Mechanisms

Missing cancellation deadlines can result in unnecessary payments for software subscriptions that are no longer needed. To avoid this, companies should implement a renewal tracking system that provides alerts before contract renewals. This allows them to reassess the necessity of the subscription and make informed decisions before automatic payments are processed.

4. Streamline SaaS Portfolio

Simplifying the SaaS ecosystem eliminates complexities and allows for efficient functioning. As per Gartner’s report managing SaaS applications with disparate admin controls reduces IT’s ability to monitor usage, automate administrative tasks, and create a consistent security posture across the portfolio.

So, organizations must consolidate multiple tools into fewer, comprehensive solutions to simplify their SaaS portfolio. Moreover, standardizing applications across departments minimizes duplicate subscriptions and encourages collaboration.

5. Implement SaaS Cost-Saving Initiatives

To maximize cost savings from SaaS solutions, companies should improve vendor pricing. Discounts based on volume can be employed to further cutting down SaaS expenses. The annual billing plan is almost always more economical than a monthly subscription. In addition, consolidated vendors boost bargaining power and make streamlined expenditures possible.

6. Employee Training and Awareness

Organizations should educate employees on responsible software usage, as needless subscriptions could drain actual finances away. Conducting regular training sessions explain the right approaches for team members to obtain, use, or hand back SaaS tools as requested. It is important for clear security policies to be in place that helps in guiding employees on how to acquire access to and deal with software.

When staff members understand the license costs and best practices, they become more mindful of their software usage thus, leading to Saas waste reduction and optimizing SaaS spend.

7. Centralized Procurement

Centralized procurement streamlines the management of SaaS subscriptions by consolidating all purchases under a single system. It prevents disjointed teams from independently acquiring similar tools, hence eliminating monotony and unneeded SaaS costs.

It provides an organized approval process that allows purchasing only necessary software reflecting business necessities and compliance standards. It also provides simplified tracking making it easier to monitor usage and renewals and get rid of underutilized applications.

Conclusion

Turn SaaS Overspending Into Cost Savings Today!

Looking for a smarter way to manage your SaaS licenses and reduce unnecessary SaaS costs? SaaS Management Platform makes it simple. With an intuitive interface, our platform gives real-time visibility of your SaaS landscape so you can quickly recognize and eliminate unused licenses, optimize your software portfolio, and maximize ROI.

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