You may love your current collaboration tools, but are you overspending on them?
90% of enterprises are overpaying for their collaboration software by up to 30%.
Software licensing costs are a big part of that problem. Many vendors lack transparency in pricing, and contracts are full of hidden fees.
The total cost of ownership for software often exceeds licensing fees and includes infrastructure, bandwidth, support, training, and troubleshooting.
So, how can you determine if you’re overpaying for your essential collaboration tools?
In this blog, we’ll cover five telltale signs that you spend too much on your collaboration tools, including easy tips you can follow to keep your costs down.
Sign #1: You’re a Legacy Business
While using several legacy solutions doesn’t always mean you’re overspending, older software and systems tend to cost much more to maintain than more modern alternatives.
On top of software licenses, you might also end up paying to manage and maintain specialized hardware, meaning you’re spending on both infrastructure and labor.
The overhead adds up quickly, especially as older systems tend to build up technical debt.
A McKinsey survey found that technical debt consumes 20% and 40% of an organization’s IT budget. Businesses collectively spend at least $1.14 trillion annually maintaining legacy tools, with the average legacy system costing around $30 million.
And that’s not even getting into hardware and software costs, productivity-destroying inefficiencies, operational limitations, or legacy systems, which are often barriers to digital transformation.
Solving this problem starts by understanding what tools your teams need to stay productive. Identify what tools are needed for productivity, collaboration, and day-to-day tasks.
With a clear picture of how you’re people work, you can explore solutions that bundle core capabilities into a single platform. For example, Microsoft Teams may have started as a collaboration tool for voice and video calls, but it’s now evolved into an all-in-one business productivity tool for collaboration, file storage, project management, customer service, and more.
Sign #2: There’s a Ton of Features Nobody Uses
One question not enough businesses ask themselves when procuring software is what features they need versus the nice-to-haves.
They get distracted by bells and whistles and embrace a throw the whole kitchen sink at the problem approach. Unfortunately, once the software is deployed, employees ignore the majority of its features — sometimes due to a lack of training, other times due to not needing them at all.
This often means the business is paying for a higher tier or a more expensive license than it needs. Employees would get the same value from a simpler or less costly solution.
But how can you tell you’ve fallen into this price pit?
One option is to deploy application tracking software like ActivTrak or Userpilot. Use them to monitor how employees use your business’s collaboration software. Eventually, you should see trends showing which features are most used and which are mostly ignored. Many collaboration apps also include a basic level of activity tracking.
Alternatively, you could survey employees, asking them to rank an app’s features based on frequency of use. Be sure to survey a combination of power users and normal users. You can also survey by department, role, and other categories to ensure you have a full understanding of how collaboration happens at your organization.
Sign #3: Every Department Seems To Have Their Own Platform
Technical debt isn’t the only thing you need to worry about when navigating collaboration software.
Shadow IT is a legitimate challenge for many organizations, where users start using unauthorized apps. In other cases, sprawl resulting from inefficient procurement, lack of oversight, or siloed communication is also an issue. While it’s likely that business units will need specialized tools for certain tasks, you should still consolidate where possible.
Let’s say every single department in your organization has a different type of project management software. None of those departments have unique needs that necessitate this type of deployment — they could just as easily all use the same platform. TCO aside, this fragmentation creates several problems:
- Increased attack surfaces for threat actors
- Information and data fragmentation can impede accuracy
- Reduced efficiency due to inefficient workflows
- Siloed communication results in redundant or duplicated work
- Integrating new technology becomes a logistical nightmare
Fixing this problem starts with understanding what applications your teams need. From there, you need to find common ground so new solutions get used by your teams. Next, you’ll need to configure IT policies that restrict access to unauthorized apps on company devices or require a secure connection to access authorized apps.
Sign #4: Your Tools Aren’t Getting Used
Another kind of sprawl occurs when you’ve got too many software solutions with either overlapping or entirely redundant feature sets.
Your employees inevitably end up using only a few of your tools and ignoring everything else. Meanwhile, you’re still paying licensing costs on all of them.
Your technology stack, meanwhile, is a complex, fragmented patchwork of platforms and systems, representing a massive attack surface that’s also incredibly difficult to secure. No one knows where to find information and files — creating even more inefficiency.
Because so many of your tools are either unused or underused, there’s also a greater chance that one of them might have a security flaw or exploitable vulnerability.
When vetting a new solution, gathering feedback from your power users is important. You want whatever solution you choose to address their needs. In many cases, these power users can become change champions encouraging and teaching everyday users how to get the most value out of a new platform.
Sign #5: People Spend Too Much Time Fiddling With Software
Did you know that employees switch back and forth between apps roughly 1,200 times a day in the average organization? They also spend an average of four hours each week reorienting themselves after switching apps.
This assumes that all your software is intuitively designed and easy to use.
That’s not always the case. In some cases, your people spend as much time figuring out how to make a system do what they want as they do working with it.
Time loss isn’t the only issue. Constantly switching between tasks, apps, or websites can also impair one’s cognitive abilities, resulting in already-overburdened employees simply burning out.
Even without burnout, that’s a ton of lost productivity.
The right productivity and collaboration tools should be simple to use and cater to the needs of your employees. You want to make it easy for them to use an application, so bundling important features into one experience is a no-brainer.
Training also helps improve productivity. Training your employees on how to use new features can also make a significant impact, improving solution proficiency and minimizing disruption in their workflows.
Are You Overspending on Collaboration Tools? Get a Spend Analysis Audit
The good news is that you can follow the same basic process to address all the issues described above.
Start by identifying and removing any redundant or unnecessary software. Anything your employees aren’t actively using can go. Once you’ve done that, assess your remaining technology stack to see if there are any opportunities for consolidation.
For example, there might be a vendor whose platform offers functionality for which you currently require multiple applications, or you might be able to combine multiple instances of the same software into a single platform.
Need help seeing if you’re overspending on telecom and collaboration solutions? Get a detailed spend analysis audit to see where you could be saving.
