If you're running a modern business, software is likely one of your biggest operational expenses. But here's a startling fact: most companies waste between 10% and 30% of their software budget on unused or underutilised tools. In this post, we'll explore why this happens and share practical steps to fix it.
Want to See Your Potential Savings?
Use our free software spend calculator to estimate how much you could save.
Why Companies Overspend on Software
There are several common reasons why teams end up spending more than necessary on software:
- Decentralised purchasing: When different teams can buy their own tools, you often end up with duplicate subscriptions or overlapping functionality.
- Forgotten subscriptions: Tools that seemed essential during a project often linger long after they're needed.
- Over-provisioning: Companies frequently buy more licenses than they need, just to be safe.
- Feature bloat: Paying for premium tiers when teams only use basic features.
The Hidden Costs of Poor Software Management
The impact goes beyond just wasted budget. Poor software management can lead to:
- Security risks from unmonitored tools
- Reduced productivity due to tool sprawl
- Compliance issues with data scattered across systems
- Budget constraints for truly necessary tools
How to Fix Software Overspend
Here are practical steps you can take to optimize your software spend:
1. Audit Your Current Stack
Start by listing all your tools and their costs. Look for:
- Duplicate subscriptions across teams
- Tools with overlapping features
- Unused or rarely used licenses
Need Help with Your Audit?
Get a free software audit from our experts. We only charge if we find savings.
2. Implement a Clear Purchase Process
Create a centralised system for software requests and approvals. This helps prevent duplicate purchases and ensures proper vetting of new tools.
3. Regular Usage Reviews
Set up quarterly reviews to check:
- Active vs. inactive users
- Feature utilisation rates
- ROI for each tool
4. Right-size Your Subscriptions
Don't be afraid to:
- Downgrade underutilised premium subscriptions
- Remove unused licenses
- Negotiate better rates for annual commitments
Want to Cut Your Software Costs?
Get a free software audit and see how much you could save. We only charge if we find savings.
Get your free auditThe Bottom Line
Software overspend isn't inevitable. With the right processes and regular monitoring, you can maintain a lean, efficient tech stack that serves your team's needs without waste. Start by auditing your current tools and implementing a clear management strategy.
Remember: every pound saved on unnecessary software is a pound you can invest back into your business's growth.