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Maximizing Efficiency in a Crowded SaaS Marketplace

Software vendor growth challenges.
Cambron Kelly
Contributing Writer

In the last decade, the number of software-as-a-service (SaaS) subscriptions utilized by companies has significantly increased, presenting new challenges and opportunities for Chief Information Officers (CIOs) and IT departments. Carhartt, a renowned workwear brand, exemplifies this trend with its Chief Information Officer, Katrina Agusti, revealing a jump from 20 software subscriptions a decade ago to 121 this year.

This surge reflects the broader industry movement towards leveraging a diverse range of digital tools to enhance business operations and stay competitive. However, it also raises concerns about efficiency, cost, and the management of these tools, especially as responsibilities begin to shift away from IT departments.

Why it matters: The decentralization of software procurement and management across different business units introduces complexities related to duplication of services, challenges in data integration, and potential erosion of cost efficiencies. This trend is fueled by an increase in available tools, driven by the demand for cutting-edge technology, including generative AI, and a sales approach targeting end-users directly.

  • While diversifying vendors can reduce dependence on major suppliers, it necessitates a strategic approach to manage the growing ecosystem effectively, highlighting the need for collaboration between IT and other business sectors to optimize technology investments and safeguard against the proliferation of “Shadow IT.”
  • The market has seen a shift in how software vendors target potential customers, with a focus on end users rather than IT departments. This approach can circumvent traditional procurement processes, leading to uncoordinated software adoption and challenges in enterprise-wide license management.
  • To cope with limited IT resources, businesses are allowing other departments to take over some aspects of software management, which introduces risks associated with duplicate subscriptions, integration hurdles, and loss of cost control.

Go Deeper -> Companies Are Juggling More Software Vendors Than Ever. It Isn’t Easy. – WSJ

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