8 Best Practices to Manage SaaS Sprawl

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February 29, 2024
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Are you concerned about the rapid rise of uncontrolled SaaS applications? It's common for organizations to experience this when adopting numerous SaaS tools across different departments, resulting in many apps in the stack, sometimes with similar functionalities.

This phenomenon, known as SaaS sprawl, brings about challenges like data silos and security risks. If left unchecked, the uncontrolled proliferation of SaaS applications can wield significant influence over business operations.

Yet, managing SaaS sprawl presents formidable challenges that aren't easily tamed. Taking proactive steps to manage SaaS sprawl can shield your business from the risks of unmanaged SaaS, redundancies, and security vulnerabilities.

In this article, we’ll discuss managing SaaS sprawl and offer some best practices to follow in 2024. These tips will help you stay on top of your SaaS applications and secure your data.

The Need For SaaS Sprawl Management?

As organizations use different SaaS tools to make work easier and collaborate better, they often end up with too many apps. This can cause problems like wasted money, security risks, and employee confusion.

To fix these issues, companies must control how many SaaS apps they use and ensure they all work together smoothly. This process is called SaaS sprawl management, and it's important for keeping businesses running smoothly.

With multiple SaaS subscriptions, organizations may pay for overlapping features or unused licenses, resulting in wasted resources and inflated costs. Each additional SaaS app introduces potential vulnerabilities, especially if not properly vetted or integrated with existing systems.

Managing access controls and data privacy across numerous platforms becomes increasingly complex. Employees may struggle to navigate and switch between multiple SaaS applications, leading to frustration and decreased productivity.

What are the key challenges of managing SaaS sprawl?

SaaS sprawl brings numerous challenges for an organization, including:

Cost management: Managing the costs associated with multiple SaaS subscriptions can be difficult. It's easy for organizations to lose track of subscriptions, leading to redundant tools and unnecessary expenses.

For instance, a company may unknowingly pay for two project management tools with similar features, wasting valuable resources.

Data security risks: Each additional SaaS application introduces potential security vulnerabilities. These applications may expose sensitive data to unauthorized access or breaches if not properly vetted and secured.

Compliance and governance: Managing compliance requirements and maintaining governance over data becomes more complex with the proliferation of SaaS applications.

Different applications may have varying levels of compliance with industry regulations, posing challenges to data privacy and regulatory compliance.

For example, a tech organization using multiple SaaS applications must ensure that each tool complies with ISO 27001 regulations to protect user data.

Performance optimization: Ensuring optimal performance across multiple SaaS applications can be challenging. Performance issues such as slow response times or downtime may arise due to network congestion, server overload, or application compatibility issues.

For example, if a marketing automation tool is not properly optimized to handle large volumes of data, it may delay campaign execution.

Shadow IT and rogue applications: The ease of accessing and subscribing to SaaS applications can lead to the proliferation of shadow IT, where employees use unauthorized or unapproved applications to fulfill their job responsibilities.

These rogue applications may not adhere to organizational policies and standards, posing security and compliance risks.

Scalability challenges: As businesses grow and evolve, scalability becomes crucial when managing SaaS applications. Organizations must assess whether their existing SaaS solutions can scale to accommodate increased user demands, data volumes, and business requirements.

To address these challenges, organizations need effective SaaS sprawl management strategies.

Best Practices to manage and overcome SaaS sprawl

Managing SaaS sprawl can be a breeze if you follow these best practices:

1. Centralize your SaaS applications for easy management

To effectively manage SaaS sprawl, you’ll need a bird's-eye view of your SaaS stack. It’ll enable your IT team to manage the SaaS applications in a centralized and organized manner, which can reduce the risks associated with SaaS sprawl.

With a centralized SaaS management framework, the IT team can keep track of all SaaS applications, enforce security and compliance policies, prevent shadow IT, and eliminate free and redundant apps in your system.

Additionally, centralized SaaS management facilitates license tracking, allocation, and reclamation and ensures that the business only pays for licenses with optimal usage.

Streamlining your SaaS environment can achieve significant cost savings and reduce risk exposure.

2. Create SaaS adoption guidelines and policies

This is a crucial step in managing SaaS sprawl. The guidelines should clearly outline the company's SaaS app usage, purchasing, and implementation policies.

They should specify the approval process for new SaaS applications, the criteria for selecting a SaaS vendor, and the security and data privacy standards that must be met.

Employees should be aware of the policies and trained to adhere to them. This helps ensure that the SaaS apps used in the company are in line with the company's overall objectives, policies, and standards.

Creating SaaS adoption guidelines and policies involves a structured approach to ensure the effective and secure integration of SaaS solutions within an organization.

Here's a basic outline to get you started:

Introduction: Define the purpose of the guidelines and policies.

Scope: Clarify which departments or teams are subject to these guidelines and specify the types of SaaS apps covered (e.g., productivity tools, collaboration platforms, CRM systems).

Selection criteria: Establish criteria for evaluating and selecting SaaS vendors, such as:

  • Security measures and certifications,
  • Data privacy policies,
  • Service level agreements (SLAs),
  • Scalability and integration capabilities,
  • User interface and user experience.

Approval process: Define the procedure for requesting and approving new SaaS applications. Specify the roles and responsibilities of stakeholders involved in the approval process.

Data security and compliance: Outline requirements for data encryption, access control, and compliance with relevant regulations (e.g., ISO 27001, SOC 2 Type II, GDPR).

Integration and compatibility: Specify requirements for integrating SaaS applications with existing IT infrastructure and other software systems.

Monitoring and evaluation: Define metrics for assessing the performance and impact of SaaS applications. Establish procedures for monitoring usage, analyzing feedback, and identifying areas for improvement.

Review and update: Specify how often the SaaS adoption guidelines and policies will be reviewed and updated to reflect technology and business needs changes.

3. Conduct regular SaaS audits to identify redundancies

Regular SaaS audits are crucial to managing SaaS sprawl and ensuring the efficient use of cloud-based software. These audits allow organizations to regularly assess and review their software and ensure it is still relevant and necessary.

Audits can help identify duplicate, redundant, and free apps cluttering your SaaS stack. By eliminating these redundancies, you can eliminate SaaS sprawl.

These audits should be conducted regularly, or at least once a quarter, to reduce the risk of SaaS sprawl and ensure their cloud-based software usage is optimized and secure.

Check this table to understand different aspects of SaaS audits.

Image showing the different aspects of SaaS audits

4. Use a SaaS management tool

How will you centralize your SaaS portfolio and get complete visibility on apps, licenses, spend, and vendors? If you’re tracking your SaaS apps manually, your portfolios are prone to SaaS sprawl, shadow IT, increased spending, and security risks.

This is why you must use a SaaS management platform. A SaaS management platform will enable you to manage and optimize SaaS applications within an organization. It can integrate with your internal systems, discover all applications your teams are using, and organize them in a centralized dashboard.

Now, you’ll have complete visibility over the apps your teams are using, and it’ll make it easier for you to find free, duplicate, and redundant apps in your system. Eliminating them will put an end to SaaS sprawl.

Image showing CloudEagle's app module

Using SaaS management tools, you can minimize the risks associated with SaaS sprawl and gain greater control over your SaaS environment. This can result in improved operational efficiency, reduced costs, and a more secure SaaS landscape.

Eliminating SaaS sprawl through a SaaS management tool offers several benefits for organizations.

Here are some of the key advantages:

  • Cost optimization: Organizations can eliminate unnecessary costs by identifying and consolidating redundant SaaS subscriptions.
  • Improved efficiency: Centralized management of SaaS applications simplifies administration tasks such as user provisioning, access control, and license management.
  • Enhanced security and compliance: A SaaS management tool provides insights into data access and usage, helping organizations identify potential security risks and ensure compliance with regulations.
  • Scalability and flexibility: As organizations grow and their software needs evolve, a SaaS management tool allows them to scale resources up or down according to changing requirements.

Here’s how Rec Room identified free apps in their portfolio and eliminated shadow IT completely using CloudEagle.

5. Be proactive in preventing Shadow IT

Shadow IT refers to the purchase of SaaS applications without IT approval. It is one of the primary factors that lead to SaaS sprawl. Employees unaware of your SaaS adoption guidelines will use company credit cards to purchase applications.

Your IT or finance team won’t be able to identify these applications, resulting in hidden expenses, security risks, sprawl, and budget overruns. By using a SaaS management platform like CloudEagle, you can be more proactive in preventing shadow IT.

Check this table to understand the different practices you can implement to prevent shadow IT:

Image of a table showing the best practices to prevent shadow IT

The best practice is to stop shadow IT in its early stages. You can configure alerts in advanced SMPs like CloudEagle to receive alerts when an unsanctioned application enters your system.

You’ll receive an in-app notification alert or via Slack whenever a user purchases an unsanctioned application. You can then email the user who purchased the application and make an informed decision to eliminate it from your system.

6. Rationalize your SaaS stack

With centralized visibility and regular audits, you’ll better understand your portfolio and easily identify free, redundant apps. Application rationalization is the process of eliminating redundancies in your portfolio. It’s like de-cluttering your SaaS stack.

Application rationalization will enable you to make informed decisions on which applications you should:

  • Keep: Continue using.
  • Replace: Swap it for a better alternative.
  • Retire: Eliminate the app from your portfolio.
  • Consolidate: Merge two or more overlapping applications into one.

By rationalizing your stack, you can ensure your portfolio is free of redundancies and security risks. It’ll also enable you to allocate or redirect your budget to critical functions or tools.

Rationalizing your SaaS stack involves evaluating and streamlining the collection of cloud-based software applications your organization uses.

Here's a breakdown of what this entails:

  • Assessment: Start by assessing your current SaaS applications. Identify which ones are being used, their purpose, and their impact on your organization's goals, productivity, and budget.
  • Identify redundancies: Look for overlapping functionalities among different SaaS tools. If multiple applications serve similar purposes, consider consolidating or eliminating redundant ones to streamline operations and reduce costs.
  • Evaluate usage and ROI: Analyze each SaaS application's usage and ROI. Determine which tools you need and eliminate or downgrade subscriptions for underutilized or low-impact applications.
  • Total cost of ownership (TCO): Calculate the TCO for each SaaS app, considering subscription fees, implementation costs, training expenses, and ongoing maintenance.
  • Create a roadmap: Develop a strategic roadmap by outlining clear objectives, milestones, and timelines for consolidating, replacing, or sunsetting SaaS apps based on your organization's priorities and resources.
  • Regular review and optimization: Regularly optimize your SaaS stack to ensure it aligns with your organization's evolving needs and goals. Stay informed about emerging technologies and market trends to make informed decisions about adopting new SaaS solutions.

To automate the process of app rationalization, you can use a SaaS management platform. It can integrate with your internal systems and automatically identify free, unused, or redundant apps in your stack, saving you time and manual effort.

7. Automating the SaaS procurement process

Manual procurement processes are prone to delays and human errors; sometimes, requests get lost midway through. The lack of a standardized procurement process influences users to purchase apps without IT approval for immediate needs, increasing SaaS sprawl.

So, to effectively manage and eliminate SaaS sprawl, you must use automated procurement workflows to streamline your process. Automation will provide complete transparency over the process and expedite SaaS purchasing.

Image of CloudEagle's procurement workflows

With a streamlined procurement process, you can ensure your teams follow the right procedure when purchasing SaaS applications. The transparency and agility provided by the automated procurement process will prevent users from purchasing SaaS independently.

To automate SaaS buying, you’ll need a procurement automation tool. Its workflows will save time for your procurement team and ensure that your stack only contains vetted and sanctioned applications.

With automated workflows, you can effortlessly assign tasks to the appropriate stakeholders, cutting down on time spent tracking down approvals.

You can also notify stakeholders through Slack, email, or in-app notifications, facilitating collaboration in a dedicated Slack channel for well-informed decisions.

Escalations ensure prompt approvals in case of incomplete tasks, allowing your team to concentrate on negotiations. Utilize Slack for procurement needs.

Slack for procurement

Also, some advanced tools like CloudEagle offer "Slack for Procurement." It’s a Slackbot that enables employees to submit purchase requests directly within Slack. This eliminates the need to chase stakeholders for approvals.

Image of CloudEagle's Slack for procurement feature

Once the request is raised, the tool will automatically notify the stakeholders within the task until all the approvals are granted.

By implementing these strategies, IT, procurement, and finance departments can effectively control the proliferation of cloud-based applications and keep their networks secure, efficient, and productive.

8. Train and educate your employees

Employees must understand the company's SaaS policies, usage guidelines, and the potential impact of unauthorized or misused software. Regular training sessions and workshops can ensure that employees are up-to-date with the new policies and processes.

Educate your employees on the risks of SaaS sprawl and why they shouldn't purchase applications without IT approval. Also, inform them about the policies and consequences of purchasing unsanctioned applications.

In addition, you can create a SaaS knowledge base, FAQs, or a SaaS champion program to provide continuous support and encourage employees to ask questions.


SaaS sprawl is a growing concern for organizations that use SaaS applications. You should adopt the above-mentioned best practices to mitigate the challenges of SaaS sprawl.

If you need help managing SaaS sprawl, look no further than CloudEagle. From automated SaaS procurement, app discovery, and contract management to cost optimization, the tool makes it easy to regain control of your SaaS environment and ensure that your organization operates at peak efficiency.

‍With a centralized dashboard, real-time reports, instant alerts, app usage insights, and user visibility, you can comfortably manage your SaaS portfolio and overcome the challenges of SaaS sprawl.

Schedule a free demo today and see how effortlessly yet efficiently you can manage SaaS sprawl within your organization.

Written by
Vamshi Krishna
Product Manager, CloudEagle
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