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SaaS Optimization: Don’t Throw Money Down the Drain

April 19, 2018

Software is expensive – simple as that. Companies shell out tens of thousands of dollars (if not much, much more) to pay for the services that help them achieve their goals. And when that software works effectively, it’s worth every penny.

Unfortunately, that’s not always the case. Every day, companies waste serious chunks of change on the software as a service (SaaS) tools they’re using (or often, not using), which is why spend optimization is so important. We know – “serious chunks of change” is a pretty arbitrary term. This statistic may clear things up: According to a report from 1E, unused or rarely used software in the U.S. and UK is wasting $34 billion per year.

Regardless of exactly how a company is wasting money, what it comes down to is this: Underutilized software can have a significant hit on your bottom line. At that point, you may as well set your money on fire – it certainly would be more interesting to watch.

In this article, we’ll highlight some of the most common ways SaaS tools are going to waste, but more importantly, we’ll follow up with some preventative measures you can take to avoid this. When you’re through here, you’ll have some helpful hints to share with your colleagues on how to optimize your SaaS.

Here’s the scary part: Wasting money with SaaS is relatively easy. Often the process is quiet and discreet until you crunch the numbers and realize, woah, you bought this software last half but still only have one registered user.

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Purchasing software that you fail to implement is a complete waste of money. You’d think that goes without saying, but it’s more common than you think. In fact, according to CSO Insights, only 44 percent of companies implementing CRM software achieve full adoption. Forty-four percent? That means that more than half of companies are wasting money when they purchase CRM software. Luckily, only a few companies use CRM software, right?

Oh, wait.

Purchasing software is a great step to solving your business problems, but it means nothing without full implementation. To achieve implementation, be sure to provide adequate training to those who will be using the tool so that users can jump in as soon as they get their login information.

It’s also important to get everybody well-versed on the why: Why are you implementing this particular software, why it’s important they start using it, and why it’s going to help you push the needle on your company’s goals.

Additionally, using software to less than its fullest capabilities is another sneaky way to waste money. For example, if you’re paying top dollar for a marketing automation tool, but only using it to build landing pages and send a few emails a year, you’re missing out on a host of features. Utilizing the tool for all of its functions will not only open the door to new ways to reach your audience, but also get you the most for your investment.

Again, this circles back to why adequate training is so important. Employees should be well-versed on most features of the software tool – not just what they’ll be using in their day-to-day. This knowledge does more than ensure you’re using your software to its highest capability.

Through proper training, your employees will become more well-rounded professionals who are ready to raise their hands when a new or uncomfortable task is requested. Empowering employees to become well-trained in different software tools contributes to their professional development and their overall job satisfaction.

And while you always want to have enough software logins and licenses for your team to get their work done, be wary of “overbuying,” or paying for too much. This increased spending can often result in underutilized logins, licenses without employees, and overall, some wasted cash.

Before purchasing, you’ll want to nail down precisely what you’re trying to achieve with this software tool, and who will need licenses for you to accomplish that. We’re not recommending giving licenses exclusively to managers, or being stingy, but do the extra work to ensure that the licenses you’re paying for will be used.

Finally, a lack of alignment throughout different teams will likely cause you to spend more than you’re thinking. For example, if your sales, marketing, and HR teams are using three separate project management tools, it’s probably time to reevaluate. Yes, different tools will support respective teams in unique ways, but in many cases, you could save money by consolidating multiple groups onto one tool.

How to Avoid Wasting Money

Up until now, this article has been pretty discouraging. But don’t worry – now we’re going to discuss ways to avoid wasting money. The best part? It’s pretty darn easy.

The first step is easy. Conduct your research before you buy. Buying a software tool based solely off of the pitch you got from the salesperson is an easy way to choose the wrong solution. And when you select the wrong software, it’s likely you won’t achieve high implementation rates.

Related: Read what the saturation of the SaaS industry means for buyers. 

When you’re choosing your software, be sure the tool will help you achieve every task you’re buying it for. Thorough research can be the deciding factor in picking software that gets the job done, versus software that's a money pit.

We’ve covered purchasing software pretty comprehensively in chapter four of our what is SaaS guide, so be sure to check that out before you make a decision.

Similarly, a free trial can be a major game changer. Try one! Typically, these will last around two weeks, which is plenty of time to indicate whether or not you’ll use the software. If you use it for 14 days and immediately realize that you can’t live without it, it’s probably a safe purchase. On the other hand, if you had to go out of your way just to log in, it will likely waste your money in the long run.

Multiple times per year, consider executing a company-wide software “audit" with the help of ITFM tools. Allow each team to document which tools they’re paying for, what business problems they help solve, and use your findings to determine if the software you’re paying for is necessary. You can run these every quarter, every half, or on whatever time frame works for you and your business.

The final step may seem like a bit of an oxymoron – it does involve purchasing another software program. But if you’re truly concerned that your software is just wasting money, consider implementing a software asset management platform. These tools will help you manage purchasing, implementing, utilizing, and in some cases, disposing of your software.

While it may seem counterproductive to purchase another software, these tools may catch things that a human wouldn’t, ultimately, saving cash in the long run.

Software is expensive, but it doesn’t have to be a waste of money. These tools will help you ensure that the software you’re paying for is truly making an impact. If not, cut your ties and let it go.

SaaS Optimization: Don’t Throw Money Down the Drain SaaS can be a great purchase, but only if you use it! This article will help you optimize your SaaS and ensure you're getting the most use out of your software tools.
Claire Brenner Claire is a former growth marketing team manager at G2. Born and raised in the Chicago area, her brief stint in Ohio (University of Dayton) gave her a new appreciation for deep-dish pizza, but left her well-versed in Cincinnati-style chili and "cities" with a population fewer than 400,000. While not writing, Claire can be found practicing calligraphy, seeking out the best dive bars in Chicago, and planning her next trip. (she/her/hers)

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