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Corma’s research shows that companies integrating software and digital tools as core elements of their operations may allocate anywhere from 5% to 30% of their operating budget to software. External software has become essential for most major companies to function. Licenses such as Microsoft Office or Google have been necessary for some time, but over the last few years many more software licenses have been required to stay competitive. As this number of software licenses increases, companies become bloated with unused software licenses and Shadow IT. This can be very difficult to effectively track and optimise without software management solutions like that offered by Corma.
As companies grow, and fight to stay competitive, their usage of software rises. This software, often provided as a service, allows them to streamline a wide range of tasks including product development, compliance, project management and a variety of HR functions. The value that this software can add is clear, in that it allows many activities to happen faster, more smoothly and at a lower cost for the company. However, many companies struggle to accurately assess and mitigate the downsides this software can bring, especially as we become more reliant on it and it grows in prevalence.
The problem recently became more pronounced in the mid-sized sector. For a long time, this issue existed in large enterprises with countless employees and tools. But with the SaaS trend (and recently the trend of new AI tools), also smaller companies rely more heavily on a large number of software apps.
According to Productiv, the average company has 300+ SaaS licenses at a given moment. These licenses often renew automatically, and our own research here at Corma shows that they could be costing medium to large companies anywhere from EUR 300k to over EUR 10m a year, depending on the company sector and scale, reflecting up to 20% of operating costs. However, because the licenses renew automatically and there are so many of them, many companies find it difficult to accurately assess the value each software generates like they would for almost any other investment.
One of the major challenges, when evaluating the value that a given piece of software creates for a company, comes from the fact that employees having access to software in no way guarantees that they will use it. The exact utilisation rates vary, but can be as low as 50%. Since most SaaS suppliers require companies to pay per head, unused licences add unnecessary costs. Conversely, having all the information on what SaaS your company has and what the utilisation rates are can help tighten budgets and avoid wasting money, especially since funding for IT has been decreasing recently.
Source: Productiv 2024 Report “The State of SaaS Consolidation”
Having many licenses that renew at different dates and are tracked by different teams through unconnected, manually updated spreadsheets can mean that many companies have no idea exactly how much they are spending on SaaS. Knowing how much is being spent and on what can help cut costs, and one source of truth for information such as license renewals can cut out downtimes or allow space for renegotiation.
Studies show that many companies have software licenses for several products that serve effectively the same purpose. This can happen because of legacy technologies, small differences or team preferences. However, companies with strong SaaS management are able to stay on top of this and eliminate redundant licenses, with the potential for bulk discounts as well.
It has become increasingly common for individual teams or business units to agree to software licenses that contribute to their work. This has gained popularity because the business units often know their needs best, but it means that central IT teams may not even know about the software being used. This brings on a few challenges, even when the software is freely provided online in some cases. The term “Shadow IT” refers to software used by employees (with potentially very negative impact on cybersecurity & compliance) without the knowledge or approval of the IT teams.
Source: Cledara 2023 Report “The State of Shadow IT”
Allowing teams to choose their own software can increase productivity, but the trade-off is that it becomes almost impossible to accurately track the licenses and optimise software spending. A study by Cledara showed that 65% of all SaaS applications accessed by the employees at the 200 companies they surveyed were Shadow IT. Even if companies restrict employees to a series of sanctioned software products, many individuals still end up using other software. The fastest growing example of this is, of course, ChatGPT.
As well as being expensive and inefficient, Shadow IT is dangerous for companies because it brings with it a higher risk of hacks or data leaks. Employees are actually more likely to use Shadow IT than sanctioned IT, which means a significant risk even if the software is not dangerous in and of itself, since this will be done outside of the business IT ecosystem. A significant amount of this software also ranks poorly in terms of cybersecurity, exposing the company to further risks. With regulators tightening cybersecurity and data security standards, few companies can afford this risk, especially with the average data breach costing USD 4.9 million.
Without a comprehensive software database, it becomes much more difficult to set up a smooth onboarding process. Single-sign-on systems do not work as well, and new people can end up with delayed access to essential software. A good SaaS management platform can massively cut down onboarding and offboarding times, increasing productivity and freeing up time for HR and IT teams.
With regulators cracking down on data leaks and improper cybersecurity compliance, many companies are doing their best to demonstrate that they are compliant by design. Shadow IT, for example, means that companies cannot gather accurate data for reporting purposes. They may also not be able to guarantee the standards of data protection required by the GDPR. Without a good SaaS management system, many companies will be exposed to significant risk.
Heads of ITs and CTOs are essential to manage the increasingly complex stack of software and technology within a company. They are responsible for overseeing the entire IT ecosystem, which includes software procurement, management, and cybersecurity. The role is very demanding since it requires them to not only manage technical operations but also the strategic decisions surrounding software investments.
Unsurprisingly, the increasing reliance on software has placed an enormous burden on IT leaders. As companies use more and more software to boost productivity and take advantage of emerging AI technologies, the responsibility to manage these tools also grows significantly. What was once a manageable task has now become a complex loop of software licenses, renewals, and security challenges. IT leaders have stayed resilient in the face of growing SaaS adoption, but the lack of the right support has brought the industry to a tipping point.
IT leaders are expected to single-handedly manage and optimize hundreds of softwares. No one questions their ability to make smart decisions about software usage and costs, the real worry lies in depriving them of the necessary visibility and data to make these decisions. The overwhelming volume of SaaS and lack of centralized information creates an environment where even the most skilled IT leaders are stretched thin.
It’s really a question of equipping them with the right tools to set them up for success. They should have access to solutions that enable them to do their jobs efficiently, freeing them from mundane software management tasks so they can concentrate on the strategic aspects of their role.
The true value of IT leaders lies in their ability to make informed decisions that equip the company with the right tools. Without the necessary data, however, they are forced to make decisions with incomplete information. This lack of visibility is not only frustrating but also limits their ability to fully deliver on their potential. At its very core, this is not just about saving money or increasing productivity, it’s about giving IT leaders the tools and data that they need to succeed.
Corma offers a comprehensive solution that enables Heads of IT and CTOs to regain control over their software landscape, streamline operations, and reduce costs. Through data-driven insights and automations, technical teams are empowered to overcome manual processes so they can focus on driving value for their organization.
As highlighted earlier, one of the greatest challenges for IT leaders is managing the sheer quantity of software in use across departments. Corma addresses this by offering complete visibility into a company’s software stack. IT teams have access to granular data that highlights exactly what software is being used and who is using it. This makes it possible to eliminate overlapping tools and optimize the software suite.
What makes cybersecurity-wary IT heads obsessed with Corma is its ability to automatically recognise Shadow IT apps (softwares that are used without IT’s approval or knowledge). Corma helps companies prevent security risks and compliance issues by identifying these unauthorized softwares.
Corma’s integration with browser plug-ins and SSO allows it to seamlessly integrate into a company’s existing systems. IT teams can expect to start seeing results and extract value from Corma in a matter of days.
Managing software access during on&offboardings is a time-consuming process for IT departments. Corma simplifies this by automating access reviews and provisioning, which enables seamless onboarding and offboarding workflows. Ensuring that the right people have access to the right tools at the right time makes entire teams more productive, not to mention the headache it saves IT departments.
Corma also proposes a self-service provisioning system, allowing employees to directly request access to software tools. This reduces the administrative burden on IT teams and empowers employees to get what they need in a fast and secure way.
Automating these key processes enables IT leaders to focus on strategic initiatives rather than getting caught up in routine tasks. Employees also benefit by experiencing fewer delays in getting access to the tools they need to be productive.
Corma’s data-driven approach empowers companies to make informed decisions about their software expenses. The ability to identify underused or overpaid software uncovers opportunities for cost savings.
These insights are extremely valuable when it comes to negotiating better deals with vendors. With data readily available, an evidence-based approach can be used to negotiate more favorable terms with software suppliers.
For example, one of Corma’s clients, Skello, was able to save 140k€ per year while sparing 150 hours of administrative work. These real, tangible outcomes demonstrate how powerful it can be to provide accurate and actionable data to IT heads.
Corma equips IT leaders with the tools and insights they need to transform how their companies manage software. In a world where software usage is only going to grow, Corma ensures that companies are ready to face these challenges head-on, with a solution that makes software management simpler, smarter, and more efficient.
Experience the benefits of digital transformation. Cut you software spend by 30% through managing the contract lifecycle of your SaaS, secure your business through automated provisioning in identity and access management, all while boosting software stack with our vendor management system.
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