UK firms lose nearly one in five SaaS pounds to waste & risk

UK businesses are facing mounting challenges in controlling software-as-a-service (SaaS) expenditure, as new data reveals significant overspending and increasing risks linked to the proliferation of unsanctioned software within organisations.

SaaS waste

According to recent survey findings, nearly one in every five pounds spent on SaaS in the UK is lost to unused or duplicate licences. This results in substantial waste as businesses struggle to align their software spending with actual usage.

Overspending is not limited to SaaS platforms alone. Around 32% of organisations admit to exceeding their planned budgets on SaaS, while 35% report overspending on security tools. The survey highlights a need for more rigorous monitoring and cost control across digital operations.

Limited oversight

Visibility over software adoption has emerged as a pressing concern. About 63% of UK IT leaders say that business departments are adopting SaaS and cloud platforms at a pace that outstrips the IT team's awareness. This trend is often referred to as "shadow IT," where software tools are adopted independently by business units, thereby bypassing central governance and oversight.

The data also shows that 84% of IT leaders believe such visibility gaps now pose a risk to their organisations. Security vulnerabilities, compliance breaches, and unnecessary duplicate spending are among the key risks identified by respondents.

Governance challenges

IT and business leaders acknowledge that the rapid adoption of unsanctioned tools often occurs as employees seek ways to enhance their workflow or expedite internal approval processes. However, this creates a complex landscape of unmonitored subscriptions and overlapping licences, complicating efforts to optimise spending and manage organisational risk.

"Employees don't turn to unsanctioned apps intentionally - it's often simply to speed up their work or get around slow approval processes that can hold projects back. Shadow SaaS highlights where governance and visibility have failed to keep pace with how fast business moves today. Every untracked subscription or duplicate licence adds hidden cost and complexity. Without visibility, leaders can't optimise spend or safeguard data. The goal isn't to block what people use, but to understand it - and use that insight to make smarter, faster investment decisions," said Marlon Oliver, Senior Vice President, EMEA, Flexera.

Investment priorities

Flexera's research indicates that solutions to these challenges lie in better collaboration between IT, finance, and procurement teams. Improved visibility and control over SaaS usage are considered essential for aligning spending with real business value. In the survey, 94% of IT leaders admit that new tools and technologies are needed to extract more value from their existing data and software assets.

The findings suggest UK companies are expected to increase investments in management solutions that track and optimise software portfolios, in an effort to curb waste and reduce exposure to operational and regulatory risks.