The impact of SaaS sprawl on productivity

The uncontrolled spread of software-as-a-service applications can pose a number of issues and hamper organizational efficiency. To maximize productivity, it is crucial to understand the root causes and consequences of SaaS sprawl, as well as to investigate effective solutions for controlling and limiting its effects.
In this guide we will explore the effects of Saas Sprawl and how leaders can overcome them to improve the productivity of team and individual.

So, let's get started.

What is SaaS Sprawl?

The advent of cloud-based SaaS tools ushered in a supercharged and hyper-effective workplace powered by technological advances and human creativity. SaaS apps’ inherent ease of adoption, limitless applicability, feature and aesthetic personalization opportunities, rapid deployment, and business-friendly economics made it an obvious choice to enhance productivity at work for businesses that were embracing digital tools. 

With time, companies’ digital tools and services stack grew to an extent where it became a tedious task for management to stay cognizant of what tools a company licenses, what the workforce actually uses, and its impact on workforce productivity. This burgeoning problem is defined as SaaS sprawl when management is unable to manage the cost, consumption, impact, and compliance of SaaS tools used by the workforce.

Companies that are powered by digital tools, on average, run on a tech stack constituted by 70 to 100 digital tools and apps. Of this stack, collaboration and productivity tools alone number anywhere between 16 to 25 tools. On top of these, individual teams use their own tech stack, as seen at most software development teams working with Git, CI/CD, and monitoring tools, while marketing and sales teams work using their customer relationship, communication, and data management stack. Many of these organizations saw a rise in the number of tools adopted and used only recently and therefore, there is a prevalent lack of insight into the cost, adoption, usage, and visibility into the impact these digital tools have on productivity and employee experience.

What Causes SaaS Sprawl?

SaaS sprawl refers to the situation where an organization is using multiple SaaS applications across different departments or functions, resulting in a decentralized and fragmented software landscape. The factors that contribute to the occurrence of SaaS sprawl are:

1. Lack of Visibility and Governance

In the absence of robust governance mechanisms, organizations may struggle to gain visibility into the SaaS applications being used across the enterprise. This lack of oversight makes it challenging to manage costs, security, compliance, and overall performance.

2. Duplication of Functionality

When numerous applications with identical functionality are implemented inside an organization, SaaS sprawl can emerge. Different departments may use different technologies to meet identical goals, leading in duplication, higher expenses, and greater complexity.

3. Rapid Innovation and Market Fragmentation

The SaaS market is highly dynamic, with new applications being introduced frequently. The availability of a wide range of specialized tools and the pressure to stay competitive can tempt organizations to adopt multiple applications, contributing to the sprawl.

4. Lack of Integration

SaaS applications are typically designed to address specific functionalities or processes. However, when these applications do not integrate well with each other or with existing systems, organizations may adopt additional applications to bridge the gaps, resulting in a sprawl of disparate tools.

What are the effects of Saas Sprawl on teams productivity?

The most obvious and widely recognized problem of SaaS sprawl is the cost aspect. A burgeoning spend on SaaS tools adds a strain to the business bottom line. 

However, our conversations with dozens of teams living in the reality of SaaS sprawl pointed us in the direction of other problems caused by SaaS sprawl that aren’t widely documented or understood. Our hypothesis is that SaaS sprawl has a destructive effect on individual and team productivity, defeating the very purpose of why teams adopt SaaS tools in the first place. Let’s take a look at why this might be the case:

1. Lack of work visibility  

Consider the team at ABC company that has a strictly enforced policy of SaaS tool compliance along with clearly established processes for digital work management. Here, the teams use Google Docs to generate and share knowledge, and all steps of knowledge generation are documented as tasks on their ClickUp project management tool. Any stakeholder, at any given point in time, knows exactly where to look for resources and how to track the work done on a particular resource.   

Now consider the team at XYZ company that has an unmanaged SaaS sprawl. Here, as teams work across a multitude of tools, they generate knowledge in all these tool spaces. Combined with a lack of process definition, not only is knowledge scattered, but there is no documentation of the what, who, where, and how of any task. When a stakeholder needs to look for information or resources, there is usually a long process of searching for the right resource and app to find any work product. 

This problem of looking for a needle (task resource) in a haystack (SaaS sprawl) hinders the visibility of what work happens in a team and how to access the product of a team’s efforts.  

2. Context switching and App fatigue

Having to work with multiple tools that often overlap in function causes employees to constantly context switch – toggle between the parallel tasks and many tools they have in their digital workplace. A RingCentral and CITE Research survey of 2000 knowledge workers showed that 7 out of 10 workers waste up to an hour of their workday by simply switching between the different tools they use. Furthermore, 50% of employees report that they find it difficult to search for resources in the maze of apps that exist in their workplace, and 46% of workers report that their work is chaotic when toggling between apps – a phenomenon now captured by the phrase “app fatigue”. 

In effect, this leads to up to 80% loss in productivity and leads to several other workplace issues such as stress, knowledge loss, and a dip in outcome quality.  

3. Synchronous communication and unproductive collaboration

The scattered knowledge and resources, the labyrinth of processes, and the difficulty that workers face in accessing and focusing on tasks lead to an increase in the need for synchronous working – which could be a deterrent to focus time and deep work, particularly when teams sync on tasks such as clarifying where a document lives or who should be working on which tool and at what stage. What might seem like a “quick zoom call to clarify doubts”, quickly snowballs into many minutes of synchronous conversations that don’t lead to tangible productive task outcomes. 

In cases where teams collaborate without fundamental digital tool best practices in place, the result of the collaboration does not get documented in the correct place or ends up being duplicated across many tools. In the end, ideas are lost, effort goes untracked, and outcomes are subpar.  

4. Compromised Security 

48% of workers use apps that are not distributed by their IT teams. When any of these apps run into security or data breaches, it becomes an expensive affair for a company to handle. It costs money, time, and also reputation, putting entire teams at risk. When shadow IT and tool sprawl are prevalent, IT teams are refocused to handle security concerns, limiting their attention to other tasks. In practice, we see SaaS-specific information security risks arising from the indiscriminate use of powerful collaboration software. A common example we came across during our customer research was that many sensitive documents on platforms like Google docs, Notion, Miro, etc., that allow powerful sharing features, were unknowingly public for anyone outside the company to access private data. Lack of tooling to control or track usage of such features has made this a prevalent but hidden problem in the world of SaaS.

How can leaders combat SaaS Sprawl? 

As the problem of tool sprawl grows, leaders must use creative, inspired, and data-driven approaches to combat the challenge.
Let us check out some of these approaches:

1. Human-centric structuring of digital culture

A leader’s north star guiding their approach to organizational SaaS stack should be human-centric. This means that leaders are cognizant of how their employees work and what their needs are, and then assemble tools and processes that complement their human efforts. Such a digital culture will ensure that technology works for the humans involved, alleviating their cognitive burden surrounding technology use and helping them process and manage their everyday tasks.  

2. IT audit and adoption tracking

Once the culture of a team’s digital infrastructure is in place, leaders can conduct a thorough assessment and audit of their existing IT infrastructure. What processes are matched with what tools, who uses the tools and where do they face the most bottlenecks, which tools lead to quicker, effective results, which tools are least used, what does the SaaS stack cost? 

Understanding the reach and usage of existing tools can help leaders strategize a SaaS toolkit that addresses gaps and also remove redundancies in app usage. 

An inspiring new methodology in combating SaaS sprawl uses analytics platforms that gather data from the different tools a team uses in order to generate insights and visibility into usage, adoption, costs, and compliance. Previously, teams were using unified multi-solution apps like Microsoft Office and Google workplace but, with expanding SaaS sprawl, there is an urgent need for a vertical integration solution that helps leaders choose the tool belt or app stack that works best for their teams. 

3. Measuring Impact – Knowing how your people work

Rightsizing a company’s SaaS app portfolio based on adoption is a first step in combating SaaS sprawl. The larger, more critical step is to ensure that the SaaS stack contributes towards the objective of using digital tools to support and boost a team’s productivity. Therefore, for leaders, it is important to gain visibility into how teams are using these apps and measure their impact on employee productivity and experience. 

In practice, introducing knowledge management tools to a company’s tool stack is an obvious solution that leaders adopt as a central part of their teams’ daily workflow. But, in our research, we saw that teams documented work and information but rarely shared this documentation with the rest of the team. This not only created knowledge silos but also duplication of information across their knowledge management tools, ultimately making it difficult for teams to discover important pieces of information. Another common scenario was with the usage of instant messengers and video conferencing. Apps like Slack, Microsoft Teams, and Zoom have made it easier and quicker to communicate with team members. But on the flip side, the indiscriminate use of such apps has led to problems like Zoom fatigue and context switching as a result of being interrupted with constant messaging spread across hundreds of channels. 

Tracking work patterns, processes, and outcomes will help leaders understand the impact of their SaaS stack on their team’s productivity and employee experience in an effort to help solve the side effects of an ever-growing SaaS stack.

4. Promoting async work 

The structure of the workplace has been evolving from being offline and in-office to digital and remote for many of us. Therefore it is natural for work patterns to evolve too. To acclimate to such changes, teams have adopted newer ways of work where digital tools find a natural fit. One such way of work is asynchronous work which is proving to be effective in combatting the effect of tool sprawl on productivity.

Asynchronous work is a team’s ability to work on the same project but at different flexible timings. Combined with the practice of allocating focus time slots allows team members to dedicate and direct their attention and effort to cognitively demanding tasks at hand, without being distracted by other tools, updates, or tasks.

Async work ensures that when a teammate blocks out focus time, others are not depending or blocked on this teammate for their tasks to be completed. This minimizes context switching and loss in productivity in a digital workplace.  

5. Leveraging insights from work analytics

As the future of work is built on the foundations of digital tools, the number of apps we depend on for our work is projected to grow multifold. Even today, many companies that we researched depend on more than 30 tools to get their daily work done. Therefore, we believe that it is wise that we accept having a large SaaS stack as the norm and focus efforts on preparing for any unintended contingencies. 

In order to manage and harness this growing stack, services like Okta, Bettercloud, and Blissfully are already helping IT teams with managing access and automating user provisioning. Tools such as Zapier and Integromat help automate everyday work from creating tickets (think Jira tickets for bug reports) to integrating leads in a CRM. To solve problems of knowledge discovery, apps like Elastic Workplace Search integrate knowledge into a centralized system to facilitate ease of search across dozens of SaaS apps.

Further, leveraging the insights from work analytics through platforms like Hatica can help leaders gain visibility into their team’s daily work. Such insights can help in improving long-term productivity and engagement without the need for forceful downsizing of workplace software. 

As companies find their footing in the post-pandemic future of work, leaders are paying attention to their digital workplaces – ensuring that their teams are set up for success in the new normal and that their processes make their companies resilient to disruption. The first step in this direction is turning to insights from their digital exhaust to enable key organization-level decision-making. As the number and the capability of SaaS tools grow, leaders need to rely on the data generated from their workplace tools for insights into their IT infrastructure, people, and their processes. A successful SaaS stack will be one that contributes to an organization’s ability to unite its people, processes, and technology. 

Combat the Saas Sprawl challenge with Hatica

💡 Hatica helps engineering teams combat the visibility, discovery, and management problem of SaaS sprawl using an integrated approach to work analytics. Hatica enables engineering leaders improve workforce productivity while also improving employee engagement and well-being by providing data-driven and factual insights into a team’s people, processes, and tools.

FAQs On Saas Sprawl

1. What are the consequences of SaaS sprawl?

The consequences of SaaS sprawl, also known as Software-as-a-Service sprawl can result in increased costs, data security risks, integration challenges, decreased productivity, a lack of centralized control, and vendor lock-in.

2. Why are companies moving towards SaaS?

Companies are shifting to SaaS for a variety of reasons, including cost-effectiveness, scalability and flexibility, quick deployment, continual upgrades and maintenance, accessibility and collaboration, integration possibilities, and a focus on core skills.

3. What are the common signs of SaaS sprawl?

The common signs of SaaS sprawl are increase in subscription and licensing costs, data security risks emerge due to the use of different applications resulting in challenges in managing access controls. Integration becomes cumbersome as data is siloed across various applications. Productivity suffers as users navigate multiple tools with different interfaces.

4. What are the benefits of managing SaaS sprawl?

The advantages of controlling SaaS sprawl begin with cost optimization by finding and deleting duplicate or underutilized subscriptions. Second, it improves data security by centralizing access restrictions across apps. Third, it boosts productivity by simplifying procedures. Finally, controlling SaaS sprawl lowers the danger of vendor lock-in.