SaaS Sprawl: What It Is & How to Overcome It

Shadow IT—when employees use SaaS (Software as a Service) tools without IT approval—can spread like wildfire, quickly leading to SaaS sprawl. In fact, nearly 70% of organizations experienced security breaches linked to shadow IT between 2021 and 2022.

The unchecked spread of SaaS tools through independent procurement creates redundant apps, higher costs, fragmented workflows, and increased cybersecurity risks.

This article will explain what SaaS sprawl is, explore its risks, and show how partnering with a Managed Service Provider (MSP) can help your business regain control. 

Key Takeaways

• Shadow IT and SaaS sprawl often lead to security risks, rising costs, and inefficiencies.
• Key risks include data silos, overlapping SaaS applications, and lack of IT oversight.
• Managed Service Providers (MSPs) conduct SaaS audits to identify redundancies, centralize and streamline management, and optimize spending while enhancing data security.

What Is SaaS Sprawl?

SaaS sprawl refers to the unmanaged spread of software-as-a-service tools within an organization, often occurring without approval or oversight from the IT department. 

As businesses grow and adopt more cloud-based solutions, managing SaaS applications becomes increasingly complex.

Common Causes of SaaS Sprawl:

• Shadow IT: Employees independently adopt SaaS tools to meet immediate needs, bypassing IT approval processes.
• Decentralized Decision-Making: Different departments procure SaaS applications without aligning with overall business goals.
• Rapid SaaS Adoption: The ease of implementing new software encourages tool overload across teams.
• Lack of Visibility: IT teams struggle to monitor SaaS usage and manage redundancies effectively.

SaaS sprawl drains your resources, slows down workflows, and leaves your systems inefficient and harder to manage. Without centralized SaaS management, businesses face growing security risks, rising subscription costs, and fragmented data silos across their SaaS stack.

By identifying these causes early, businesses can regain control, streamline their tools, and reduce unnecessary expenditures.

What Are the Risks of SaaS Sprawl?

Unchecked SaaS sprawl creates significant business challenges, impacting costs, security, and operational efficiency.

Increased Costs

Redundant or underused SaaS subscriptions inflate expenses, particularly when different departments adopt tools independently. Organizations often pay for duplicate functionalities within their SaaS stack without a transparent procurement process.

Security Vulnerabilities

Unapproved SaaS tools from shadow IT introduce security risks like data breaches and compliance violations. Sensitive information stored in unprotected systems is vulnerable without IT oversight.

Operational Inefficiencies

Overlapping SaaS applications slow productivity by disrupting workflows and requiring teams to manage inconsistent user experiences. Time wasted switching between platforms or reconciling fragmented data hampers overall efficiency.

Data Silos

Disconnected tools isolate information across systems, creating silos that limit visibility for IT teams and stakeholders. This fragmentation delays decision-making and results in teams relying on incomplete or outdated data.

Addressing these risks through effective SaaS management and audits can help businesses reduce costs, enhance security, and improve operational performance.

How Can an MSP Help You Manage SaaS Sprawl?

Managed Service Providers offer essential solutions to combat SaaS sprawl, enhancing visibility, reducing costs, and improving security. Here’s how they help:

Conduct a SaaS Audit

MSPs identify all SaaS applications, including those adopted through shadow IT, to provide a clear picture of the organization’s SaaS stack. They uncover opportunities to streamline tools and reduce unnecessary expenditures by assessing usage and eliminating redundancies.

Centralize SaaS Management

MSPs use dedicated SaaS management platforms to centralize procurement, tracking, and renewals. This approach ensures all SaaS tools align with organizational goals while improving visibility across applications, subscriptions, and costs.

Streamline and Consolidate Applications

By analyzing overlapping tools, MSPs recommend consolidating functionalities into fewer, more efficient platforms.

Example: Replacing multiple project management tools with a single solution simplifies workflows and reduces costs tied to redundant subscriptions.

Ongoing Monitoring

MSPs continuously monitor SaaS usage to prevent future sprawl. They ensure all new software undergoes proper approval processes, minimizing security risks and avoiding unnecessary expenses.

By leveraging MSP expertise, businesses can regain control of their SaaS environment, optimize spending, and enhance security and efficiency across their operations.

Why Should You Choose Parachute?

At Parachute, we specialize in helping businesses regain control of their SaaS environment before it spirals out of hand. Through in-depth SaaS audits and centralized management, we align your tools with your business goals and provide the insights needed to stay ahead.

Shadow IT, rising SaaS costs, and fragmented workflows create costly inefficiencies and expose sensitive data to unnecessary risks. With Parachute’s proven expertise, we streamline your SaaS ecosystem, strengthen data security, and empower your team to make informed decisions that drive efficiency and cost savings.

Let Parachute be your trusted partner in optimizing your SaaS ecosystem. Don’t let SaaS sprawl take control—contact Parachute today for a tailored solution that protects your business and maximizes its potential.