Software spend

Where your software budget actually goes

An afternoon's work, and usually the cheapest money a growing business ever finds.

Most of what gets written about software waste is written by companies selling software. There is nothing to buy at the end of this one, and you can do the whole exercise yourself with a bank statement and a spreadsheet.

We look at this in every business process review, because it is the one finding that pays back immediately. Cancelling an unused seat saves money next month. Everything else in a review requires someone to change how they work first.

Start with the bank, not the software

The usual instinct is to open each tool and audit its users. Do it the other way round. Pull twelve months of card and bank statements and pick out every recurring payment to a software vendor. Twelve months, because annual renewals are exactly the ones nobody remembers.

Two things fall out of this that never fall out of a tool-by-tool audit. You find subscriptions nobody knew were still running, often on a former employee's card or a personal account that gets expensed. And you find the true annual figure, which is almost always larger than the number in anyone's head, because it is paid in small monthly pieces across several accounts.

The four things you will find

1. Seats for people who left

This is the big one and it is almost universal. Off-boarding removes email access, because that is the one everyone remembers. The project tool, the design tool, the accounting package and the CRM keep billing.

In a company of thirty people with normal turnover, three or four stale seats across four platforms is a completely ordinary finding. At £15 to £70 a seat a month, that is a four-figure annual number for an hour of checking.

2. Licences for people who never use it

Different from the above, and more awkward, because the person is still there. A tool gets bought for the whole company when four people needed it. Most platforms will show you last login. Anyone who has not signed in for ninety days is not using it, whatever they say when asked directly. Asking directly is how you end up keeping everything, because nobody wants to be the person who gave up a tool.

Check the logins first, then have the conversation with the answer already in front of you.

3. Two tools doing one job

This accumulates through perfectly reasonable decisions. A team adopts something during a busy period; another team standardises on something else; nobody ever formally retires the first. Now you pay for two chat tools, or two file stores, or a project tracker plus a task tracker that overlap by eighty percent.

The saving here is real but it is not free: consolidating means migration and retraining, and that cost is often larger than the licence in year one. It is worth doing where the overlap is near-total, and not worth doing to save £30 a month.

4. A platform bought for one feature

Someone needed e-signatures, or a scheduling link, or a form that writes to a spreadsheet, and the tool that solved it happened to be a large suite with a large price. The feature is still needed, but most of the suite around it is not.

This is the one where a smaller, cheaper tool usually wins outright, and where the answer is genuinely just to switch.

The plan tier nobody re-examines

Vendors price on a ratchet. You upgraded during a busy quarter to unlock one feature or to add capacity you no longer need, and the plan has never been looked at since. Annual commitments renew silently.

Check what each plan tier is actually buying you today rather than what it was buying when someone chose it. Downgrading is unglamorous and frequently the single largest line in this whole exercise.

What it is worth, honestly

We will not quote you an industry statistic here, because the ones in circulation come from companies selling licence management software and they are not measuring your business.

What we can say from doing this repeatedly: in a company between ten and sixty people that has never audited its software spend, finding somewhere between ten and twenty-five percent of the annual total is ordinary. Occasionally much more, when an annual renewal for something long abandoned surfaces. Sometimes very little, when someone has been keeping an eye on it.

Do the arithmetic on your own numbers rather than trusting anyone's percentage, including ours. Twelve months of statements will tell you the truth in an afternoon.

Do this before you buy anything

There is a category of product that manages software licences for you. For a company of your size it is usually another subscription solving a problem that a spreadsheet and a recurring calendar reminder solve permanently. Do the manual pass first. If you are still losing track afterwards, then consider tooling, with a real number for what it would save.