SaaS sprawl is a rising concern for IT: Causes, challenges, and best practices

After years of accelerated SaaS adoption, organizations have fallen victim to SaaS sprawl. Even with the average applications declining, SaaS sprawl still remains a concern.

While SaaS sprawl isn’t new for IT teams, the landscape has dramatically shifted, particularly with the explosive emergence of AI.

This isn’t just about managing a few extra subscriptions; it’s a systemic issue impacting security, compliance, and budget efficiency.

The AI catalyst: Fueling the sprawl

The significant increase in SaaS sprawl concerns points to a primary driver: the rapid, often unmanaged, adoption of AI. Employees, driven by the promise of enhanced productivity and innovation, are integrating AI tools into their workflows at an unprecedented pace. This has created a new dimension to shadow IT – shadow AI.

The ease of access to AI-powered SaaS applications has led to a proliferation of tools being adopted outside of IT’s visibility, worsening the SaaS sprawl. This results in: 

• Increased security vulnerabilities: Each new, unmanaged AI tool introduces potential security risks, expanding the attack surface and increasing the likelihood of data breaches.
• Data governance challenges: AI tools often handle sensitive data, and without proper governance, organizations risk compliance violations and data privacy breaches.
• Integration chaos: Integrating disparate AI tools with existing SaaS applications creates complex data silos and integration challenges, hindering operational efficiency.
• Uncontrolled spending: The lack of centralized oversight leads to redundant subscriptions and unnecessary expenses.

The rise of shadow AI has amplified the existing challenges of SaaS sprawl, creating a perfect storm for IT departments. The ease with which employees can now access and integrate powerful AI tools has outpaced the ability of IT to establish effective governance and security measures.

Other causes of SaaS sprawl

SaaS sprawl isn’t a new phenomenon and it doesn’t happen overnight. It’s a result of a series of events that organizations tend to overlook.

Lack of visibility and governance

IT departments often lack visibility into all the SaaS applications used across the organization, especially if there’s no centralized management or bring-your-own-device policy. When teams purchase these tools without IT involvement, it hinders effective management.

Decentralized procurement and decision-making

Many organizations don’t have a centralized procurement process in place, which leads to departments choosing their own tools without IT oversight. This results in duplication and data disparities making it difficult to share information and achieve holistic insights.

Growth of SaaS adoption

The constant evolution of SaaS applications and tools makes it easy to find a tool that fits almost every need. Plus, businesses feel the need to keep up with tech advancements, resulting in them trying out almost every new tool in the market. All these reasons contribute to the increasing adoption of SaaS tools in organizations.

Organization culture and management 

In cases where companies aren’t willing to procure cloud-based applications for employees’ daily workflows, they’ll end up using tools of their own choice and without IT approval. On the other hand, some work cultures aren’t proactive about training employees on the latest tools in the market, resulting in them trying out things without authorization and creating a lack of coordination.

How IT can reclaim control: Best practices to avoid SaaS crawl

To effectively address this AI-fueled SaaS sprawl, CIOs and their IT teams must adopt a proactive and strategic approach. Here’s some key actions to include…

Centralized SaaS management

Implementing a unified platform that provides comprehensive visibility into all SaaS applications, including those powered by AI, will enable organizations to effectively manage security risks, optimize spending, enforce compliance policies, and gain valuable insights into user behavior and data flow. 

BetterCloud enables proactive security by alerting you to unauthorized app logins with work credentials. You can automatically revoke access and educate employees about data security risks.

Also, these insights can be used to optimize your SaaS licenses. With a single view into all the apps in your environment, you can easily identify which apps have overlapping functionality or licenses no longer in use.

This centralized approach fosters a more controlled and efficient environment, allowing for proactive threat detection, streamlined license management, and improved overall governance across the entire SaaS ecosystem.

Establish clear AI governance

Develop clear guidelines for the procurement, usage, and security of AI-powered SaaS applications. This includes defining data access controls, compliance requirements, and security protocols – the usual SaaS governance best practices.

Also consider implementing an IT-sanctioned app catalog or marketplace. These catalogs give IT control over IT resources, enable SaaS spending optimization, and give business users the flexibility and agility they need to use the right tool for the right job at the right time.

Implement employee training

Train all employees on how to request new software through centralized procurement practices. They must also be made aware of the problems caused by shadow IT to mitigate the risk of SaaS sprawl further.

Communicate usage policies

Inform all departments about the existing SaaS applications used in the company. Make it mandatory for employees to use the listed applications for all related workflows. This will reduce the possibility of duplicate SaaS purchases and subscriptions.

Regular audits and vendor management

Conduct regular audits of your SaaS and AI environment and work closely with vendors to ensure compliance and optimize license utilization.

Squash SaaS sprawl with BetterCloud

The rapid integration of AI into the SaaS landscape has created a new level of complexity for IT professionals. By embracing a proactive and strategic approach, organizations can mitigate the risks associated with SaaS sprawl and harness the transformative power of AI in a secure and controlled manner.

Eliminate the growing pains that come with a growing business and a growing stack when you work toward solving SaaS application sprawl with BetterCloud.

Looking for more ways to save money on SaaS spend? Book a demo to chat with one of our experts.