SaaS sprawl keeps growing with no end in sight

Even as CIOs try to limit SaaS sprawl, the problem appears to be getting worse, as employees keep adding new apps instead of removing them, according to a new study.

While SaaS sprawl is a well-known and long-standing problem, more than six in 10 IT leaders say their organizations are adding new SaaS tools every month, according to a new report from intelligent process automation provider Nintex. Nearly a third of US organizations represented in the survey add new SaaS apps every week.

As a result, IT leaders at more than half of US organizations surveyed admitting having between 51 and 200 SaaS tools within their tech infrastructure, while about half of UK and Australian organizations have the same problem.

The SaaS sprawl epidemic has been building in recent years, as consumers and companies have seen new apps as a way to address a specific issue, says Niranjan Vijayaragavan, Nintex’s chief product officer. 

“Talent was expensive, and so building something enterprise grade was difficult,” he says. “It has led to this sprawl of SaaS applications, where every small group has gone and purchased something to solve their own problem.”

But there’s a problem: Every new SaaS app brings specific workflows that may not fit with the company’s business operations, he adds. App developers often hard-code workflows into their products, assuming all client companies run the same way.

“The first problem is your business operation gets defined by how the application runs, and that should never be the case,” Vijayaragavan says. “You should define what your business operations are, and software as a solution for it, not a cause for it.”

More apps means more problems

IT leaders surveyed acknowledged several problems caused by SaaS sprawl. The top issues included workflow delays, difficulty scaling, increased manual entry, and data duplication.

“In most organizations, you got these disconnected systems, and you’re trying to put some Band-Aid, bubble gum, barbed wire around it to actually run your business operations,” Vijayaragavan says. “People are finding it to be inefficient, because now you have to integrate one system to the other.”

Employees often believe they’re taking action to address a problem by adding a new app, says Kevin Trowbridge, a veteran software developer and CTO at media outreach platform Qwoted.

“I tell my team, ‘Tools will not solve the problem,’” he says. “Often, you’ve created new problems. Now you have a new tool to maintain, educate the staff about, and pay for.”

SaaS sprawl creates problems similar to dependency hell, a common software development nightmare, Trowbridge adds.

“Unmanaged external dependencies multiply, causing a brittle, unstable system that’s difficult to evolve or maintain,” he says.

A growing number of SaaS tools also introduces new security risks, adds Justin Etkin, co-founder and COO at procurement system vendor Tropic.

“If you have people going out and buying tools and making purchase decisions independently, without a review from the security department, you have no idea what you’re actually introducing into the ecosystem,” he says.  “When you bring in the tool, you’re often then integrating with existing source-of-record systems, whether it’s your CRM or your ERP.”

The Nintex report may actually undercount the number of SaaS tools in use at many organizations, Etkin says. He’s encountered companies with less than 500 employees using more than 150 SaaS tools, with many enterprises running even more.

SaaS sprawl often comes from conflicting directives that company leaders give employees, he adds. The CFO and CIO may try to enforce policies that require employees to get approval for every new app purchase, while lower-level managers may encourage them to be problem solvers.

“You’ve got directives from leaders within the business functions saying, ‘Experiment, try new things, be on the lookout for the latest and greatest technology to help you do your job either more efficiently or more productively,’” Etkin says. “Sprawl is the result of good employees trying to move fast in the absence of a process that will work with them.”

Limiting the sprawl

To fix the problem, organizations can take a couple of routes, Etkin says. Companies can stringently enforce policies limiting employee purchases of SaaS tools, potentially using monitoring software to beef up enforcement.

Alternatively, organizations can be more reactive and encourage a level of app experimentation, he says.

The key for CIOs and other company leaders is consistency across the leadership ranks, he adds.

“The biggest challenge that CIOs can run into is ambiguity and inconsistency at the leadership level,” Etkin says. “If the CIO thinks that we need to have very tight controls, but you’ve got the chief marketing officer who’s instructing their team to be experimenting and trying new things, that tension is going to create a lot of waste, a lot of spoilage, a lot of inefficiency.”

Qwoted’s Trowbridge suggests companies stick to well-known, vetted SaaS apps. In some cases, companies can write their own software to address a problem, instead of introducing a risky external dependency, he says.

“Don’t adopt a new SaaS tool to solve trivial issues that can be easily handled through existing processes or simpler methods, such as internal documentation or lightweight training,” he adds.

Trowbridge advises IT leaders to curate new apps and invest in staff training, but he also encourages some flexibility. “The SaaS usage may seem sloppy or excessive, but if the tool is actually making someone’s job easier, it might be best to let it be,” he says. “Only insert yourself to solve real problems.”