Insights | RevWisely

I've spent more than 25 years in SaaS. During that time, I've worked with companies of all sizes, from fast-growing startups to large enterprises. While the industries, products, and customers were different, one thing remained surprisingly consistent.

Most companies don't really know what software they're paying for.

The CFO has a number. IT has a list. Department leaders have subscriptions they consider essential. Employees sign up for tools using company credit cards. Renewal notices arrive in inboxes that nobody checks until it's too late. The information exists, but it is scattered across contracts, systems, spreadsheets, and emails.

The problem is rarely a lack of data. The problem is that nobody owns the process of turning that data into action.

For smaller companies, the challenge is often even bigger. Many businesses with fewer than 75 employees do not have a dedicated IT manager or procurement team. Software decisions happen one at a time as teams solve immediate problems. Before long, the company is paying for dozens of applications, and nobody has a complete picture of why they were purchased in the first place.

This is how SaaS sprawl begins.

The Cost Is Way Bigger Than Most Companies Realize

When leaders think about software costs, they usually focus on subscription fees. Those costs are easy to see because they show up on invoices and budgets.

The bigger costs are often hidden.

Every new application requires setup, training, administration, support, and maintenance. Someone has to manage users and permissions. Someone has to answer questions when things break. Data has to move between systems. Reports need to be built. Integrations need to be maintained.

As more software gets added, complexity grows.

What starts as a simple solution to a specific problem often creates additional work elsewhere. One team adopts a new application. Another team needs access to the same data. A third team creates a spreadsheet because the systems don't connect properly. Soon people are spending time managing software instead of doing the work the software was supposed to simplify.

The subscription cost is only part of the story. The operational cost is often much larger.

Most SaaS Sprawl Is Really Workflow Sprawl

This is where many companies misunderstand the problem. They assume they have too much software. In reality, they often have too much workflow complexity.

Companies rarely buy software because they enjoy buying software. They buy software because they are trying to solve a business problem. Marketing needs better campaign management. Sales wants improved forecasting. Customer success needs a way to manage onboarding. Finance wants better reporting. Each purchase makes sense on its own.

The problem is that nobody steps back and looks at how all the pieces fit together.

Over time, organizations build layers of software around workflows that were never redesigned. Instead of simplifying the way work gets done, they add more systems to support existing processes. The result is a maze of applications, handoffs, approvals, notifications, spreadsheets, and meetings.

At some point, employees are no longer navigating a workflow. They are navigating software.

That is why most SaaS sprawl is really workflow sprawl underneath.

Why Software Audits Often Fall Short

Many companies eventually realize they have a problem and launch a software audit. This is a good first step.

Tools like Productiv, Zylo, and BetterCloud can help organizations build a software inventory. They can identify applications, spending levels, license usage, and renewal dates. That information is valuable because it provides visibility into the technology stack.

However, software inventories only tell part of the story.

Knowing that two applications have overlapping functionality does not explain why employees are using both. A utilization report will not reveal duplicated approvals, manual handoffs, or inefficient processes. It won't explain why information has to be entered three different times before work can move forward.

The biggest sources of waste are often found between systems rather than inside them.

That is why many software optimization projects produce disappointing results. A company eliminates a few licenses, saves some money, and then finds itself facing the same complexity six months later.

The software changed. The workflow did not.

What Companies Should Do Instead

The best approach combines software discovery with workflow analysis. Start by building a complete inventory of applications, spending, ownership, utilization, and renewal dates. Every company should understand where its technology budget is going.

Once that work is complete, shift the focus to workflows.

Map how work actually moves through the business. Look at how leads move from marketing to sales. Examine how customers are onboarded. Follow approval processes from beginning to end. Understand how information flows between people, teams, and systems.

This is where organizations usually find the biggest opportunities.

They discover multiple tools supporting the same process. They uncover duplicate reporting systems. They find approvals that add little value and handoffs that slow everything down. They realize that employees are spending time moving information from one system to another instead of creating value.

The goal is not simply to eliminate software. The goal is to simplify the way work gets done.

When the workflow improves, software consolidation becomes much easier.

Why AI Changes the Conversation

For years, companies responded to workflow problems by purchasing another application. That made sense because software was often the only practical way to improve productivity.

AI changes the equation.

Instead of adding another layer of software, organizations can now rethink the workflow itself. AI agents can monitor activity, analyze information, identify patterns, and take action across multiple systems. Tasks that once required manual coordination can increasingly be automated or orchestrated.

This creates a different conversation.

The question is no longer, “What tool should we buy next?”

The better question is, “Why does this workflow work this way in the first place?”

When companies start asking that question, they often discover that entire steps can be removed. Approvals can be simplified. Reporting can be automated. Information can flow directly between systems instead of passing through multiple people.

The opportunity is much larger than reducing software costs.

It is about redesigning how work gets done.

The Companies That Win Will Consolidate Work, Not Software

Many organizations will spend the next few years trying to reduce software costs. Some will succeed. Others will cancel a handful of applications and call it progress. The companies that gain a real advantage will take a different approach.

They will focus on simplifying workflows before they focus on reducing software. They will look for unnecessary handoffs, duplicated effort, and manual work that slows execution. They will use AI to redesign how information moves through the business and how decisions get made.

As a result, they will often end up with fewer applications. More importantly, they will end up with less complexity. That distinction matters.

The goal is not to have the smallest software stack. The goal is to create the simplest path from signal to execution. In our experience, the biggest savings rarely come from canceling software licenses. They come from eliminating unnecessary work. Once that happens, software consolidation becomes a natural outcome rather than the primary objective.