Reclaim Control: CFO Strategies to Optimize SaaS Costs

In the face of uncertain economic conditions, CFOs are being tasked with finding new ways to tighten budgets without sacrificing the organization’s momentum. While headcount and office space usually get the most scrutiny, there’s a stealthy budget drain that often goes unnoticed: SaaS (Software as a Service). As software needs multiply, many companies end up with a sprawl of apps, each costing a little but adding up to a big expense. The reality? SaaS is now the third-largest operational expense for many companies, right after personnel and office costs. Here’s a look at eight strategies CFOs can use to take control of these costs, bringing structure, transparency, and strategic purpose to SaaS spend.

1. Create a Real-Time SaaS Inventory

Many companies don’t have an up-to-date list of the software they’re using, let alone what it’s costing them. But staying on top of your tech stack is crucial for managing expenses. Start by establishing a dynamic, real-time inventory of all the software in use across the company. This goes beyond just listing names—track costs, department ownership, user counts, and renewal dates. By setting up automated alerts for upcoming renewals, you can avoid the last-minute rush and negotiate better terms, avoiding the costly surprise of unused or duplicate licenses that have quietly auto-renewed.

2. Consolidate Redundant Tools and Vendors

You might find that multiple teams are paying for tools that do similar things. This often happens as teams grow and start sourcing their own solutions. To cut costs, look for overlap in your tech stack. For example, if three departments are using different tools for project management, consider consolidating to a single, company-wide solution. This not only reduces licensing costs but also encourages standardization, making it easier to support, integrate, and train teams. Streamlining vendors is a powerful step toward simplifying SaaS management and reducing redundancy-related expenses.

3. Make Shadow IT Transparent

Shadow IT is the practice of employees signing up for software without going through proper channels, and it’s more common than you might think. Studies estimate that up to 40% of SaaS spending is on unauthorized tools, creating budget challenges and security risks. Implement a transparent approval system that makes it easy for employees to request new tools while still allowing the finance and IT teams to oversee what’s being used. Regularly remind teams to run any new tool requests through your system to ensure security compliance and budget control.

4. Fine-Tune SaaS Licensing and Usage

Not everyone needs the deluxe version of every tool. Many SaaS providers offer tiered licenses, so paying for the highest level for every user is often overkill. Dive into usage metrics and identify who is fully using their licenses and who could downgrade to a less expensive plan. Take Zoom, for example: if only a few team members host large meetings regularly, there’s no need for everyone to have access to the highest-tier license. Downgrading unused or underused licenses can result in immediate savings without affecting productivity.

5. Create a Budget-Conscious SaaS Culture

Cost control shouldn’t fall solely on the CFO’s shoulders. Encourage a culture where everyone considers ROI when requesting new software. This can be as simple as embedding a few critical questions in software request forms:

• Does this tool improve team productivity or revenue?
• Can we work with an existing tool to achieve the same results?
• How will this impact our budget in the long term?

By making software purchases a shared responsibility, CFOs can cultivate a company-wide awareness of SaaS costs and foster smarter decision-making.

6. Implement a Transparent Procurement Workflow

A structured procurement process can help prevent impulsive purchases and unnecessary renewals. Implement a simple, transparent workflow for SaaS requests that allows departments to track their software expenditures. This not only streamlines purchasing but also encourages departments to think more strategically before requesting a new tool. With a clear, transparent process in place, departments are more likely to collaborate and consider the bigger picture, ultimately aligning software decisions with business goals and reducing redundant costs.

7. Schedule Routine SaaS Audits and Renegotiations

Conducting a one-time audit of your SaaS stack is a great start, but real savings come from regular check-ins. Schedule quarterly or biannual reviews of all software subscriptions to catch any “zombie” subscriptions—those sneaky apps that are rarely used but still drain resources. During these audits, pay attention to contract renewal terms. Are you locked into a rigid contract that doesn’t reflect current usage? A SaaS management platform can help identify low-use apps or licenses that are up for renewal, allowing you to renegotiate terms or cancel subscriptions that no longer align with current needs.

8. Align SaaS Investments with Business Priorities

Ultimately, the best way to manage SaaS spend is to make sure every dollar aligns with company goals. Some apps are vital for growth, while others might not contribute to your core objectives. Collaborate with department heads to identify software critical to achieving your company’s key targets—whether that’s improving customer experience, supporting sales growth, or enabling remote work. If a tool doesn’t clearly support these priorities, consider phasing it out or finding a lower-cost alternative. Keeping your SaaS investments focused on high-impact areas helps prevent spending drift and ensures that every tool adds value.

Implementing these eight strategies empowers CFOs to take proactive control of SaaS spending. By turning a potential budget buster into a well-managed resource, CFOs can not only cut costs but also enable smarter growth. SaaS is here to stay, but with a little structure and strategic oversight, it can serve as a powerful tool for building a resilient, cost-effective organization.