SaaS Creep: Wrangling the Expansion of Your Business Software Costs

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Software used to be bought by going to the store and purchasing the installation disk for a one time cost. But those days are long gone. Today, businesses typically buy their software as a “service” wherein they pay a monthly fee, usually based on the number of users.

Software-as-a-Service (SaaS), as it is commonly called, has revolutionized the way businesses consume software. With a low cost of entry and easy implementation, company’s find themselves adding more and more software to their solution stack. Then one day, the business owner looks down and sees the business is spending a fortune every month on software and they don’t even know what it is all for.

If you find yourself in this situation, here are some steps on how to get it all under control.

Build a list

You don’t know what you got until you know what you got. The first step is to take a look through your books to identify those recurring monthly, quarterly, or yearly charges that are silently hitting your account every month.

Pick out the charges that are for some sort of software and add them to the list. Don’t worry about digging into the details yet, just build your list. Write down what the software is along with the frequency and amount of the payment

Get the details

For each software product you identified, create a report about that piece of software. The report will need the following sections:

  • The goal behind the application: Why did you get this software to start with? What specific problem were you trying to solve?
  • Changes to the original problem: The problem you were having when you first purchased the software may have changed. Notate how the problem is affecting your business now.
  • User list: Who are the people using the software? Make a special not for the administrative user.
  • Total number of users: How many people do you have using the software?
  • Administrative accounts: Sometimes companies end up setting up multiple administrative accounts for the same piece of software. One way to save money on SaaS applications is by ensuring that all users are under one master account for the company as there are usually discounts for a bulk number of users.
  • Pricing Model: Most software has a unit of cost. It may be per user, per number of records, or per level of functionality.
  • Unit Price: How much does the software cost per unit.
  • Total paid each month: How much do you pay for the software each month. If you pay quarterly or yearly, break it down into a monthly cost.
  • Contract dates: If the software is under a contract, list the contract begin and end dates.
  • Invoice notification: Get the email or mailing address of where the SaaS invoice is sent.
  • Account paid from: Provide the account used to pay the charges for the software.

Analyze your applications

Now that you have a solid understanding of just what software your paying for, it’s time to look for cost reducing waste and overlap.

  • Waste: Your greatest cost savings are likely to come from over-licensing. During your report building, you will find that you have licenses for users that are no longer with the company or no longer serving the role that requires the software.
  • Overlap: Especially as a company grows, you end up getting two pieces of software that have overlap in some functionality. Look for the opportunity to get rid of software that overlaps. Additionally, look for opportunities to replace two or more software services with one that can do everything. You can find the better-fitting alternative at a site like FinancesOnline.

Take Control of you SaaS costs

Today’s businesses often depend on Software as a Service but wasteful costs can creep up on you. Take some time today to evaluate your SaaS costs or get in touch with us today to help guide you through the process.