How to Reduce SaaS Spend Without Cancelling Tools Your Team Actually Uses

Most organisations approach SaaS cost reduction the wrong way. They look at the tools and ask "do we need this?" The answer is almost always yes — which means nothing gets cut, the budget stays bloated, and the problem remains.

The right question is: "Are we paying for the right number of licences, at the right price, on the right contract terms?"

Where SaaS waste actually comes from

Industry data consistently shows that 31% of SaaS licences go unused within 30 days of purchase. But unused licences are only one of three categories of waste:

**1. Licence waste** — Paying for seats that nobody uses. This happens when employees leave, roles change, departments shrink, or tools get replaced. The vendor keeps billing. Nobody notices until the annual renewal.

**2. Contract waste** — Paying above market rate because the original deal was never renegotiated. Software pricing changes. Market rates shift. Most organisations renew at the original price because they have no benchmark to push back with.

**3. Duplication waste** — Paying for two tools that do the same thing. Salesforce and HubSpot. Zoom and Teams. Notion and Confluence. Usually the result of different departments buying independently without visibility into what already exists.

The licence problem is worse than you think

For a typical 100-person organisation spending £180,000 per year on SaaS, 31% waste means £55,800 in recoverable licence cost. But the number is understated, because it only counts licences that are completely unused.

Partial utilisation is a larger problem. A tool that is used by 40% of its licensed users is not "wasted" by the standard metric — but 60% of the cost is producing no value. When you look at utilisation rates rather than binary active/inactive, the recoverable figure is typically 2-3x higher.

How to find it without guessing

The traditional approach is a manual audit — export your finance data, match it against your HR system, email managers asking who uses what. It takes weeks, produces incomplete results, and needs to be repeated every quarter.

The modern approach is automated cross-referencing. Connect your accounting system (Xero, QuickBooks) to your identity provider (Azure AD, Okta). The accounting system tells you what you're paying for. The identity provider tells you who is actually using it. The gap between those two numbers is your recoverable waste.

This is precisely what OTIS automates. Connect Xero to import your technology transactions. Connect Azure AD or Okta to import your actual usage data. OTIS cross-references them automatically, quantifies the waste, and tells you exactly which licences to cancel or reduce.

The contract problem requires different data

Licence waste is found by cross-referencing usage data. Contract waste requires market benchmark data — what are other organisations of your size and industry paying for the same tools?

This data exists. Your software vendors have it. Procurement consultants have it. Most organisations don't, because gathering it requires either expensive consultants or data-sharing arrangements with other buyers.

The right approach is to use a platform that maintains independent benchmark data — market minimum, average, and maximum pricing for the tools you use — so you can walk into every renewal knowing whether you're above or below market rate.

What to actually do

1. **Get visibility first.** You cannot cut what you cannot see. Export your technology spend from your finance system and categorise every line item. Most organisations are surprised by what they find.

2. **Cross-reference usage.** Connect your identity provider to your spend data. The gap between licences purchased and licences used is your first, easiest win.

3. **Benchmark your contracts.** Before any renewal, check your current pricing against market rates. Even a 10% reduction on your top 5 vendors is typically worth more than cancelling 20 small tools.

4. **Set a renewal calendar.** Most contract waste happens because renewals sneak up. A 90-day warning for every renewal gives you time to renegotiate, right-size, or replace.

5. **Make it a process, not a project.** Technology spend analysis done once produces one year of savings. Done quarterly, it produces compounding returns as your estate evolves.

The organisations that recover the most budget are not the ones that cut the most aggressively. They are the ones with the best information — who use it consistently.

Automate this analysis with OTIS

Connect your accounting system and identity provider. OTIS runs this analysis automatically and surfaces findings as they emerge.