Here’s what to do about that
By Steele Consulting
At some point in the life of every growing business, somebody asks the question that nobody wants to be the one to answer: “how many software tools are we actually paying for?”
The team you’d expect to know — IT, finance, ops — usually doesn’t. Not because they’re bad at their jobs. Because the answer has been distributed across departments, individual credit cards, forgotten free trials, tools bought “just to try,” and auto-renewals that landed on someone’s inbox in a month when they didn’t have time to review them. By the time anybody adds it up, the number is startling.
Forty-seven is a conservative estimate for a mid-market company with a hundred employees. Industry surveys from BetterCloud and Ventana Research put the average closer to 130. The number grows faster than headcount, and unlike headcount, nobody notices when it does.
In our 24 years at Steele Consulting, we’ve watched this quietly compound across every kind of client. The remarkable thing isn’t the count. It’s how much of the total spend goes to tools that are duplicated, unused, or being used for the wrong job — usually 25 to 40% of the SaaS budget, in our experience with clients who have done an honest audit.
This post is about how to run that audit. Not the enterprise version with a six-figure consulting engagement. The practical version, that any operator with a spreadsheet and a weekend can run.
Why SaaS sprawl happens
Nobody sat down and decided to buy 130 tools. Sprawl happens for a specific, structural reason: SaaS is easy to buy and hard to see.
Every department was, at some point, empowered to solve its own problems. Marketing bought a scheduling tool. Sales bought a prospecting tool. Ops bought a workflow tool. Each purchase was small enough to escape any formal procurement process — often under a credit-card threshold that didn’t require approval. Each one made local sense at the time.
Then two things happen. First, the purchases keep coming. Second, nobody ever revisits them. The tool from three years ago is still charging your credit card because the person who bought it left, or forgot, or moved on. The tool that overlaps with the one another department already had is still running because nobody realized they were doing the same job.
The problem isn’t that people bought tools they shouldn’t have. The problem is that nobody’s job is to notice what happened afterward.
Step 1: The inventory
Before you can decide what to keep, you have to know what you have. This is the part most businesses skip, because it’s boring and it takes real work.
Pull the following, in one place, for the last twelve months:
- Every recurring subscription charge on every corporate credit card
- Every invoice from a SaaS vendor to your finance system
- Every tool listed in your SSO (single sign-on) provider, if you have one
- A one-line survey to every department head: “list every tool your team uses in a given month”
The four lists will not match. That’s the point. The gaps between them show you exactly where the visibility is failing.
You are looking for tools in three specific categories:
- Tools nobody named but that are being paid for (find these in the credit card statements)
- Tools people named but that don’t show up in any bill (usually free tiers being used with company data — a security question, not a cost question)
- Tools multiple people named that appear only once in billing (usually a personal account carrying business data)
By the end of this step, you should have a single spreadsheet with every tool your business is paying for, what it does, who owns it, how much it costs annually, and when the renewal is.
Most operators find their real number is 30–50% higher than they expected.
Step 2: The 4-Box Audit
For each tool on the list, drop it in one of four boxes.
Essential
Mission-critical, used daily, hard to replace. Every business has some of these — the accounting system, the CRM, the communications platform. They pay for themselves. Keep them. The action on Essential tools is not “cancel.” It’s “negotiate the renewal aggressively” and “make sure the contract terms don’t lock you in badly.”
Redundant
This tool overlaps with another tool that does the same job. Two project managers. Three chat tools. Two competing CRMs used by different departments who don’t share leads. Redundant tools are almost always the largest source of savings in any SaaS audit. The action is to pick one, migrate the other, and cancel.
Zombie
Nobody actually uses it, but you’re paying anyway. Check login records if you have SSO; check last activity if you don’t. Zombie tools often carry surprisingly high per-seat charges because they were negotiated when the business was smaller and never revisited. The action is to cancel this week, before the next auto-renewal.
Wrong Shape
Someone is using it, but for a job it wasn’t built for — usually because they didn’t know a better option existed. A spreadsheet doing what a database should do. A file-sharing tool doing what a project manager should do. A survey tool doing what a customer feedback platform should do. The action is more nuanced: find the right tool for the actual job. Sometimes that means buying something new. Sometimes it means custom software — but only when the workflow is genuinely unique to your business. We covered how to decide that in Build, Buy, or Bend.
Step 3: The action pass
Once every tool is in a box, the actual work is fast.
For the Redundant box, pick winners this week. Not next quarter. Every week you delay is a week you’re paying for two things that do the same job. The migration is the hard part, but the cancellation is worth accelerating even if the migration takes a month.
For the Zombie box, cancel. Today, if the renewal isn’t imminent. If the renewal is imminent, cancel first and negotiate later — vendors will often win you back at a significant discount when they see you actually leave.
For the Wrong Shape box, don’t rush. This is where operators make expensive mistakes. Take two weeks to understand what the actual job is before you buy the replacement. Half of the “wrong shape” cases turn out to be process problems the tool was masking — the same diagnostic we wrote about in Process Problem or Software Problem. If the tool is compensating for an unclear workflow, replacing the tool won’t fix the workflow.
For the Essential box, do the renewal work. Every SaaS vendor negotiates. Most operators don’t ask, so they don’t get the discount. If a tool is Essential, it also means the vendor can’t afford to lose you — that’s leverage, and it’s leverage that expires quietly at every auto-renewal if you don’t use it.
The renewal trap
The single biggest structural problem with SaaS spend at growing businesses isn’t the tools themselves. It’s the renewal cycle.
Most SaaS contracts auto-renew annually. The renewal typically lands on someone’s calendar as a 30-day-notice-to-cancel window, and if that window closes without action, you’re locked in for another year. In practice, at growing businesses, those windows close all the time — not because anyone decides to renew, but because nobody notices.
The fix is a simple discipline. Every tool on your inventory gets a calendar reminder 60 days before its renewal, assigned to a named owner, with a one-question decision: “should we still be paying for this?” Sixty days is enough to negotiate, migrate, or cancel. Thirty days isn’t. And auto-renewal without a review is how growing businesses end up spending 30–40% of their SaaS budget on tools they wouldn’t buy again today.
Where custom software actually enters the picture
Not often, honestly. The vast majority of SaaS sprawl gets solved by better inventory, honest deduplication, and clean renewal discipline — not by building anything. That’s the truth even though we’re a firm that builds custom software.
Custom software enters the SaaS conversation in exactly one situation: when several of your Wrong Shape tools are all working around the same underlying workflow, and that workflow is genuinely specific to your business. Then the honest question is whether replacing three off-the-shelf tools with one purpose-built system saves money and improves the workflow enough to justify the build. The Build Score from our Build, Buy, or Bend post is the framework for answering that question — it applies exactly the same way at the SaaS-consolidation level as at the individual-tool level.
How we approach this at Steele Consulting
Most of the time, when a client shows us their SaaS sprawl and asks whether custom software is the answer, we tell them to do the inventory and the audit first. Then we tell them which parts of the resulting Wrong Shape list are worth building for, and which are better solved by picking a better off-the-shelf tool.
We also do the build when the build is the right answer — and the ROI on consolidating a Wrong Shape cluster into a single purpose-built system is often the highest ROI of any custom software project. But the audit comes first. Building a system to replace tools you haven’t inventoried is how you end up with a beautiful custom app and still 47 SaaS subscriptions running quietly in the background.
If you’re looking at your credit card statements and suspecting your number is bigger than it should be, that’s the conversation we’re happy to have. Reach out and we’ll walk through the audit with you.