Most companies don't have a SaaS problem - they have a SaaS accumulation problem. Tools get added when a team has a problem to solve, invoices get approved because the monthly cost is small, and nobody runs a formal decommission process when the problem goes away or when a different tool already covers the same ground. Over three to five years, the subscription line on the P&L quietly doubles.
Cutting those costs without breaking the workflows your team depends on requires a different approach than a blunt cancellation sweep. This is a process for doing it methodically.
Why SaaS Costs Keep Growing
The economics of SaaS purchasing create predictable sprawl. Individual tools often cost less than $500 per year - low enough to get budget approval without a formal evaluation. A department head approves a $29/month tool on a credit card, it becomes part of the workflow, and it never gets the scrutiny it would have received at $10,000/year.
Multiply that across departments and you get a stack of 40-80 tools at a typical 50-person company. Gartner research consistently finds that enterprise organizations underestimate their SaaS spend by 20-30% because purchases happen through multiple procurement channels and are tracked inconsistently.
Three structural forces make this worse. First, most SaaS tools have auto-renewal. When a subscription renews for another year, there's no forced decision point. Second, team turnover means the person who originally justified the purchase has often left the company. Third, integration complexity creates dependencies - canceling tool A may break a workflow that relies on its output feeding into tool B.
None of these forces makes reduction impossible. They just mean that reactive cuts ("what can we cancel this week?") don't work as well as a structured audit process.
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Building a Complete Inventory
You can't reduce spending on tools you don't know you have. The first step is building an authoritative list of everything being paid for.
Pull from at least four sources:
Credit card and expense statements. Filter for all SaaS-related charges over the past 12 months. Many subscription tools are on personal or department credit cards, not the main corporate card. You need visibility into all of them.
AP/finance records. Annual contracts and invoiced tools show up here rather than on cards. Pull vendor payments over $500 for the year.
IT-managed accounts. Single sign-on systems (Okta, Azure AD, Google Workspace) track which SaaS tools employees are authorized to use. This list is often different from what finance tracks.
Email search. Search billing@, no-reply@, invoice@, receipt@ across company email domains. Recurring subscription receipts turn up tools that fell through the financial tracking.
For each tool, record: tool name, vendor, primary contact or owner, monthly or annual cost, number of licensed seats, contract end date, and whether it's on auto-renewal. Build this in a spreadsheet. G2's SaaS management resources cover dedicated tools if you want software to automate the tracking, but a spreadsheet works for most companies under 200 people.
Identifying Unused and Underused Subscriptions
Once you have the inventory, sort by usage. Tools fall into three categories: actively used, occasionally used, and barely used.
For each tool, answer:
- When did someone last log in? (Most SaaS tools show last activity in their admin console.)
- How many of the licensed seats are active in the past 30 days?
- Has anyone complained about not having this tool when it was discussed for removal?
Tools with zero logins in 90 days are candidates for immediate cancellation. Tools where fewer than 30% of licensed seats are active are candidates for right-sizing - keeping the tool but reducing to the actual number of users.
Seat utilization is the single highest-value metric to track. If you're paying for 50 seats and 15 people log in monthly, you're paying for 35 seats you don't use. That's a simple conversation with the vendor.
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Consolidation: When One Tool Can Replace Three
Beyond canceling what nobody uses, consolidation creates larger savings. Many tool categories have significant overlap: a project management tool, a team communication tool, and a task tracking tool may each solve a version of the same problem, with your team using all three because they were each added at different times by different people.
Consolidation requires answering a harder question than "is this used?" It requires asking: "Of everything we use in this category, which one covers 80% of the use cases, and which others can we migrate away from?"
Common consolidation opportunities:
- Multiple tools for internal documentation (Confluence, Notion, Google Sites, SharePoint)
- Overlapping project or task management (Asana, Monday, Jira, Basecamp, Trello)
- Redundant communication channels (Slack, Teams, email plus a department-specific tool)
- Separate tools for analytics and reporting that a single BI layer could replace
Consolidation takes more work than cancellation. There's usually migration, training, and a transition period where both tools run in parallel. That cost is real. The right calculation compares the ongoing annual savings from consolidation against the one-time migration cost.
"The biggest SaaS cost problem we see isn't the expensive enterprise tools. It's the accumulation of $50-200 per month subscriptions that never got a formal decision to buy and never get a formal decision to stop. No single subscription looks expensive. Forty of them together represent a meaningful headcount equivalent." - Dennis Traina, 137Foundry's business technology services
Zapier is worth considering as part of a consolidation strategy when tools are retained partly for their integrations. A lightweight automation layer that connects two well-chosen core tools can replace three tools that were each kept partly for their connectors.
Negotiating Better Pricing on Tools You're Keeping
For tools that pass the utilization and consolidation review - the ones genuinely embedded in how your team works - renegotiation is often possible.
SaaS vendors have significant pricing flexibility they don't advertise. Renewal conversations, annual pre-payment offers, and competitive pressure from alternatives all create leverage.
What works:
Negotiate at renewal time. Contracts coming up for renewal in 30-90 days are the highest-leverage point. The vendor wants to retain you and has flexibility to prevent churn they wouldn't have mid-cycle.
Commit to annual vs monthly. Most SaaS tools discount 15-20% for annual vs monthly billing. If you're already month-to-month on a tool you plan to keep, switching to annual often pays back in under 90 days.
Reference competitor pricing. Knowing what alternatives charge gives you a reference point. You don't have to switch - you just need a credible alternative evaluation to give the conversation credibility.
Right-size seats before renewing. Don't renew at your current seat count if usage doesn't justify it. Reduce to actual users plus a 10-15% buffer, then negotiate the rate on that reduced number.
Building a Sustainable Review Cadence
A one-time audit produces one-time savings. Without a recurring process, the accumulation restarts. The fix is treating SaaS like headcount - something that requires active justification to add and regular review to retain.
A practical cadence for most companies:
Monthly. Review new tool requests before approving. Any tool above a defined threshold (say, $50/month) requires the requester to confirm no existing tool covers the need and identify what the tool replaces or supplements.
Quarterly. Review utilization across the full stack. Flag any tool where active users dropped below 50% of licensed seats. Owner of the tool responds with either a plan to increase adoption or a recommendation to reduce seats.
Annually. Full renewal review for any tool with a contract renewing in the next 6 months. Evaluate continued need, consolidation alternatives, and renegotiation.
This cadence doesn't require dedicated software management tooling. A shared spreadsheet maintained by finance or IT, with department heads owning their subset, covers most of the process for companies under 500 people.
137Foundry's services include automating the tracking and alerting parts of this process - surfacing utilization data and upcoming renewals without requiring manual spreadsheet maintenance. For teams that have a data integration layer in place, the same approach applies: the data integration work that consolidates your business systems can include surfacing SaaS utilization data automatically.
Making the Case Internally
SaaS cost reduction often stalls on organizational friction rather than technical complexity. The team that uses a tool rarely wants to lose it, even if usage is low.
Framing helps. "We're cutting your tools" is a harder conversation than "we're right-sizing our software budget to free up resources for tools we've been holding off on." If the cost savings from consolidation fund a tool or capability the team genuinely wants, that trade-off changes the internal dynamic.
For tools with vocal defenders but low utilization, the right step is not immediate cancellation. It's a 60-90 day utilization challenge: the team commits to hitting a usage threshold, and cancellation happens if they don't. This surfaces whether the tool is genuinely valued or just familiar.
The data from your audit - seat utilization, last login dates, cost per active user - is the argument. Cost per active user converts the abstract line on a P&L into a per-person number that business stakeholders understand.
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Where the Savings Go
SaaS audits typically surface 15-25% in total software spend that can be cut or right-sized without functional loss. At the typical 50-person company spending $150,000 annually on software, that's $22,000-37,000.
Redeploy those savings toward two categories: tools that have been requested but not funded, and security and compliance tooling that often gets deferred. Both are easier to justify when the money is identifiably coming from rationalized subscriptions rather than new budget allocation.
The discipline of treating software subscriptions as managed cost rather than accumulated convenience is what separates companies that control their technology spend from those that discover late in the year they've been paying for tools nobody remembers requesting. The 137foundry.com team works with businesses on the operational side of this - both the one-time audit and the process design that keeps costs from creeping back up.
