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Workflow and process automation vendor Nintex recently announced findings from new research around SaaS products and the inefficiencies they can create when improperly managed. We spoke with Nintex CPO Niranjan Vijayaragavan and Kevin Schaal, CEO of Nintex partner AiGS, about the ongoing problems posed by SaaS sprawl.
Software, tech sprawl bringing higher costs, inefficiencies, and risk to mid-sized orgs
Organizations have adopted an increasing number of SaaS products and applications over the past several years, and the impact of this adoption on efficiencies and processes has been widely discussed. To quantify the issue, Nintex surveyed 2,000 IT decision-makers from mid-market companies across Australia, the United Arab Emirates, the UK, and the US.
Highlights of the survey results include:
- 54% of U.S. mid-market companies are running between 51 and 200 SaaS tools.
- 30% are adding new tools every week, the highest rate globally.
- Eighty-eight percent of IT decision-makers report that software sprawl is having a moderate to major financial impact, and 24% say it’s consuming 30% of their IT budget due to redundancy.
“IT teams often end up inheriting these solutions and tools that they never wanted and never chose in the first place,” said Schaal. “It’s also not just the tech itself that’s the problem. Licensing agreements and contracts might be held by different teams with different terms; it’s possible that multiple departments are using the same tech but under different agreements, and there’s no one person or team managing all of those vendors. It becomes a massive headache really quickly.”
“Pretty soon, your business processes are an indicator of what tools you bought but not of what your business actually needs to be successful,” Vijayaragavan said.
While 96% of IT leaders consider tackling software sprawl a moderate to high priority, nearly half (49%) report a lack of IT strategy and resources to address it.
The irony here is that many of these organisations adopt SaaS tools because they promise to bring more efficiency to their operations, and now those same tools are creating the issues they aimed to solve.
“Up until pretty recently, the market rewarded growth, and there were so many cloud-native apps being built to solve problems. So, businesses that wanted to grow saw those apps and other SaaS tools as a way to get what they needed fixed to continue growing,” Vijayaragavan said. “But now, the focus is also on profitability and efficiency, and teams are re-considering their data governance and licensing control over what they use, and it’s leading to new problems.”
“I know a lot of organizations saw tech as the way to grow quickly, and then they say, ‘well now that we’ve got scale, let’s migrate it all together,’” said Schaal. “With all of the economic uncertainties this year, we’ve seen a lot of companies tighten their budgets or at least realize they can’t be as agile as they want to with so much complexity in their contracting and deployments.”
Will AI sprawl be the next plague on operations?
As IT leaders and business executives wrap their heads around SaaS sprawl, they may also need to pivot elsewhere. As GenAI and other forms of AI-enabled technology dominate headlines and earnings calls, organizations might not have the insight into internal AI use they need.
“I think there are a lot of mistakes people are making with AI right now. It is still being talked about too much as a universal solve for all problems, and it should be treated as one part of an overall solution,” Schaal said. “People also might think they have more AI deployed than they do, and some of the same issues are popping up. Different teams use different tool, and not all organizations have a policy or unified approach on what they’re using internally.”
“AI sprawl is absolutely going to be a problem for some organizations,” Vijayaragavan said. “But the issues here compound. If you don’t know where all of your SaaS is and what is being used in your company, then you don’t have your data secured and ready to use with AI. Adding more tools doesn’t address the foundational issue that your processes aren’t aligned or even understood.”
The actions organizations need to take, and how partners can help reduce SaaS sprawl
The call to action that Nintex and Vijayaragavan advocate is for IT leaders to focus on orchestrating workflows, integrating systems, and prioritizing processes over simply adding more tools to the stack.
“It all starts with business operations. Do you understand how your business operates and what it actually needs from its tech to be successful? Once you can map that out, it’s easier to think through all of the technology in your stack,” Vijayaragavan said.
“Integrating all of these tools and solidifying things like contracts and licenses is really difficult, and IT teams need to start consolidating,” Schaal said. “That’s where Nintex really shines for us. We can show clients all the capabilities they can now access through one tool and one platform, and how much simpler their overall experience can become.”
For Schaal and the AiGS team, bringing their clients a solution to their sprawling technology problems takes time and proof of concept at various stages of implementation.
“We don’t try to move clients all at once, because change is hard, and trying to change everything at once usually just doesn’t seem feasible to companies,” said Schaal. “But once we can close a deal to consolidate one facet of their stack together, and we show them the added value in that move, it becomes a lot easier for clients to see the benefits in examining the rest of their tooling.”
SaaS and AI sprawl are just two of the many challenges MSPs solve every day. Cynomi’s recent report suggests that partners are also tackling advanced security needs at higher rates than ever before.
