By Jeffrey Shear, J Shear Consulting

Sooner or later, every CFO asks the question: "Can we take 15% out of technology spend?"

The usual response is to delay projects, freeze hiring, or push back an upgrade. Those moves cut cost, but they also cut capability — and the bill usually comes due later with interest. In my experience, there's a better place to look first: the spending that isn't delivering anything at all.

There's plenty of it. Zylo's 2026 SaaS Management Index puts median SaaS spend at $9,455 per employee and finds that organizations leave an average of 36% of their SaaS licenses unused. For a 150-person company, that median works out to roughly $1.4 million a year in SaaS alone — before infrastructure, managed services, or telecom.

Where technology waste hides

• Unused and underused licenses. Seats assigned to former employees, people who logged in once, or users who only need read access.

• Overlapping tools. Three project management apps, two e-signature platforms, several file-sharing services — each adopted by a different team.

• Premium tiers nobody needs. The whole company on the enterprise plan for features one department uses.

• Auto-renewals nobody reviews. Contracts that renew on autopilot, often with a price increase attached.

• Expensed and shadow apps. Tools bought on credit cards that never appear on IT's list. AI subscriptions are the fastest-growing category here.

• Legacy and over-provisioned infrastructure. Old servers still running, cloud resources sized for a peak that never came, phone lines for offices that closed.

• Service contracts never benchmarked. Managed service and support agreements signed years ago and never compared against the market.

A four-step approach

1. Build a complete inventory

IT's list of applications is almost never the full picture. Pull every technology-related charge from accounts payable, corporate cards, and expense reports for the past twelve months. Most companies are surprised by what they find — often discovering two to three times as many applications as they thought they had.

2. Match spend to actual usage

For each significant tool, compare what you pay for against what's used. Admin consoles and login reports make this straightforward for most SaaS products. Ninety days without a login is a reasonable starting threshold for a license to reclaim.

3. Decide: keep, consolidate, right-size, or retire

4. Renegotiate and put guardrails in place

Use your usage data at the negotiating table — vendors respond to evidence. Then make sure the waste doesn't creep back: assign a business owner to every significant application, keep a renewal calendar that flags contracts 90 to 120 days before they renew, and route new technology purchases through a simple approval step.

Watch the new cost driver: AI

AI tools are being adopted bottom-up, through individual subscriptions and usage-based add-ons. Zylo found that 78% of IT leaders reported unexpected charges tied to consumption-based or AI pricing. The fix isn't to block AI. It's to know what's in use, choose a small number of approved tools, and set spending limits on usage-based features before the invoice arrives.

What not to cut

Cost reduction done badly creates risk. I'd be very cautious about trimming:

• Cybersecurity tools, backups, and disaster recovery
• Systems your customers interact with directly
• The training and support that make expensive systems actually get used

Cutting these is how a cost-saving exercise turns into an incident report.

A composite example

Consider a 150-person professional services firm — a composite of what I see regularly. IT believed the company used about 60 applications. The inventory found more than 180, including four tools for file sharing and a premium CRM tier used by a single team.

Over six months, they consolidated overlapping tools, reclaimed unused licenses, right-sized tiers, and renegotiated three major renewals using their own usage data. Annual software and technology spend fell by a little over a fifth. No team lost a capability it relied on, and part of the savings funded a long-delayed upgrade the business had been asking for.

Turn savings into capacity

The real win isn't just a lower bill. It's freeing budget for the things that move the business forward: the AI investment worth making, the data foundation your reporting needs, or the automation that gives your team time back. Make the review a quarterly habit, and technology spend becomes something you manage deliberately rather than something that just happens to you.

---

If you'd like an independent review of your technology spend, I help companies find the waste, renegotiate with vendors, and redirect savings to the investments that matter.

Book a consultation →