Introduction

These days there’s a tool for everything, and it’s especially true in the digital agency world. You can communicate with Slack or Yammer. For project management there’s Smartsheet, Trello, Basecamp, Asana, Flow and Waffle. For UX and design a couple popular options are InVision or Webflow.

These are just a few in a very very saturated space. It seems like every month a new Software as a Service (often referred to as SaaS or on-demand software) tool is rolled out that is meant to make everyone’s lives easier from designers and developers to content strategists and PMs.

Companies. Love. SaaS. As of 2015, net revenue surpassed $30 billion. While this is dominated by industry giants like Google, Adobe, Salesforce, and Microsoft, many of the services mentioned above are commonplace in the digital and creative agency world.  

What is “SaaS Pollution”?

“SaaS Pollution” is a homegrown phrase used to describe a company’s over-enrollment in Software as a Service. The result is a general inability to know what tools are being used versus what is being paid for. Simply put, having too many things to use makes it difficult to know what’s worth paying for.

Emergence Capital Partners Mobile and SaaS landscape

 

More SaaS More Problems

The problem is three-fold. The first is the obvious one: wasted money. If people don’t use software that’s charging month to month, money is wasted and profits are lower. The second is general confusion that comes with each piece of software. Let’s say your company has two communication platforms, three design tools, and two more project management apps, and each has a different pricing model, you’ll eventually lose track of what you’re paying for. Is it cloud storage? Number of users? Some weird freemium model? Finally – and this is the real kicker – there’s the time wasted discussing the best software for any given task. Coworkers and project leads will spend hours in aggregate debating the merits of a given tool, which again is a waste of time.

What Causes SaaS Pollution?

SaaS Pollution stems from two sources: customer ignorance and/or SaaS provider deceit.

Let’s start with the customer; that is, the agencies and organizations using the software. There’s little foresight when signing up for a new SaaS; there’s no formal process for test driving software before committing to a monthly or annual subscription. Thus, customers dive in before really knowing what’s in the water. And if a company is big enough to afford multiple software services, there’s usually a disconnect between the project managers/developers/designers and the financial teams budgeting for them. The incentive to reconsider SaaS tools because of price isn’t a concern for anyone outside of the financial department because, well, they are out of sight and therefore out of mind. Lastly, what happens when an employee leaves the company? The software is forgotten and access can be lost. It’s easy for SaaS tools to simply slip through the cracks, resulting in employees having no recollection of who signed up for what or whom to talk to about terminating the subscription.

Then there’s SaaS provider deceit, which is known in other circles as #business. SaaS providers (obviously) have every incentive to keep you paying, thus they make it difficult to stop paying. They do this by requiring credit cards and pushing annual renewals, effectively making the payment process less frequent and more automatic (which is not ideal for accountants and budgeters).

Action Steps to Beat It

There are a few proven steps you can take to beat SaaS Pollution.

  1. Keep all passwords in a password management tool (i.e. LastPass or 1password) to idiot-proof the inevitable forgotten or lost passwords.
  2. Create a generic email for every new SaaS subscription or sign-up (i.e. designteam@acme.com)
  3. Always always always make sure that the new service lists someone from accounting as a billing contact to ensure they receive invoices.
  4. If possible, bill “on account” rather than to a credit card. This will get you better vendor data and more control over your payments.
  5. Track recurring payments in a spreadsheet. Be sure to include monthly cost, payment frequency, renewal date, internal owner, account email, billing contact, credit card used, and a brief description.
  6. Review all SaaS tools quarterly with team leaders (i.e. engineering, strategy, IT, accounting) and assign “owners” for each tool to enforce accountability.
  7. When peak SaaS enrollment is hit (according to limits set by you and your team), consider enforcing a one-for-one where you can only add a new tool if another is dropped. Alternatively, you can set a budget cap so that if new software is introduced, you can switch to cheaper packages for pre-existing software to make room.

Conclusion

Avoiding SaaS Pollution saves time and money. Small monthly costs eventually add up and result in massive (and unnecessary) dents in profit. It takes a concerted (but not herculean) effort to avoid SaaS Pollution. Feel free to reach out if you have any additional comments or questions: alex@isl.co.