The SaaS sprawl problem is real and it's expensive. Tools get added by individual team members, by departments, by one-time projects, and by acquisitions. Renewals auto-renew without review. The company grows, the tool count grows, and nobody has a complete picture of what's being paid for.
At $5M ARR, the typical SaaS company is spending $500K-$1M annually on software. A systematic vendor rationalization audit typically finds $100-300K in recoverable savings without meaningful impact on team productivity.
The vendor audit methodology:
Step 1 — Complete inventory. Use an IT spend visibility tool (Vendr, Zylo, or your corporate card statement) to create a complete list of every software subscription, with annual cost and renewal date.
Step 2 — Usage assessment. For each tool, determine actual usage: who uses it, how often, and for what purpose. Many tools are used by 5-10% of the supposed user count. License count often doesn't match actual usage.
Step 3 — Redundancy identification. Group tools by function. If you have three tools that all do something similar (three Slack alternatives, two project management tools, two analytics tools), identify which one is authoritative and which are redundant.
Step 4 — Criticality assessment. Rate each tool: mission-critical (removing it would break workflows), important (removing it would create friction), and nice-to-have (removing it would create minor inconvenience). Nice-to-haves are first candidates for removal.
Step 5 — Negotiation on renewals. The 30-60 days before each significant renewal is the leverage window. Vendors who know you're evaluating them or consolidating are more willing to negotiate.
The $200K doesn't require cutting tools you need. It requires being intentional about tools you don't.