Dive Brief:

• Nearly one-third, 29%, of SaaS software spend is underutilized or wasted, according to Flexera's State of ITAM 2022 report released Thursday. The company surveyed 465 global IT professionals at companies with 1,000 or more employees.
• Companies also struggle to manage desktop software, with employees estimating 31% of their spend in this category is either underutilized or wasted, according to the report.
• One-third of IT asset management teams say they currently track SaaS usage, but almost half of respondents plan to start tracking SaaS usage. The majority of respondents saying their main priority is responding to audits.

Dive Insight:

Unseen SaaS spend can chip away at a company's IT budget, bloating costs for even the most modern, digital enterprise. The balance for CIOs is to outfit workers with the tools while keeping spend under control.

What that balance looks like will look different across organizations. But companies frequently grapple with cost drain from mismatched SaaS spend. And total waste is probably larger than what businesses estimate, according to Brian Adler, senior director of cloud market strategy at Flexera.

As companies rely more on digital tools, software use "is growing even faster and more dynamically," than before, Adler said.

Software sprawl across the organization is part of what's complicating SaaS spend management. With more parties across the enterprise trialing and purchasing vendor solutions to meet their needs, software spend can veer off from company oversight.

More than one-quarter of companies expect the number of people involved in software purchasing decisions to increase in 2022, one report found.

Proper planning can guide companies away from overspend, according to Adler. Companies need to "stop the panic-buying" of software solutions and right-size the subscriptions for their users "based on who's actually using the modules," said Adler.

But over-correcting on software spend can also be detrimental to companies. Organizations with top digital performance reap benefits from higher technology spend, including cutting back on general and administrative costs, according to research from The Hackett Group.

Employee experience is another factor to consider, particularly considering tool choice is a top priority for younger generations of employees.

"You need to make sure that the target audience is getting access to the bits of that bundle that they need," said Adler.