Every fast growth company gets software bloat over time. It’s why I regularly recommend that my clients conduct a tech audit, where you take a look at all the software, SaaS, and related accounts to make sure you are paying only for what you need and use and nothing more.
Advice from a Fractional CFO
One of the common things I tell my clients when they ask where can we save money is to take a look at their tech stack. There is probably a lot of wasted money right there. And with just a little effort, you can make big changes in your expenses, without touching things like employee benefits or compensation or long-term liabilities that are tougher to negotiate and change.
For some of my clients, this has resulted in tens of thousands of dollars in savings.
How Do Businesses Get Tech Bloat
So you may be asking exactly how a business can save thousands. This particular one was a pretty successful business that had been operating for several years. They had gone through a period of rapid growth, so things get sloppy during that time. (PS It’s normal, so don’t beat yourself up if your tech stack is bloated)
You are onboarding employees and you just throw a credit card at what they need. This includes the software and other accounts that you think they need, just to get them up and running on day one and profitable as soon as possible. But did you ever stop to look at whether they are using those accounts? Or are they on the right plan?
And if you have any turnover, which is always inevitable in a high growth company, did you properly remove their accounts? Or did you just change the password and say “I’ll get back to that” like we all do?
On more than one occasion, clients have reported that they were paying for multiple plans on the same service. By combining the accounts, they were eligible for discounts or a lower per employee cost.
And then there’s the situation where you decide that this technology just isn’t the one for us anymore. But that pesky subscription is still sticking around because while you moved to the new technology, you never canceled the old subscription.
So we know we need to take a look at our tech stacks, but how do we do that? What are we looking for?
What to Look For in Your Tech Audit
The first step in a tech audit is to figure out what services you have. Since this tech audit is focused on saving money, I usually tell clients to start with all the tech expenses that have hit their P&L in the past 12 months.
Why 12 months? Well, some don’t charge you every month or even every quarter. But almost everyone charges at least once a year.
Once you have a list, sort the list by how much you’ve paid over the past year. This will give you a good priority list of which accounts to look at first (because you may run out of time or get distracted before you tackle them all). Attack them from the highest to lowest, unless you just know that there are some quick wins you can get lower in the list.
Ask These Questions About Each Tech Service
Now that we know who is on the list for consideration, now we have to look at each one and determine whether we need to make any changes. These are the questions that I look at for EACH service:
- Am I still using the service? If not, cancel it.
- If I’m using it, am I on the right plan? Do I have add-ons that I’m not using? Do I need to change anything?
- Are there any users that need to be deleted, added, or permissions changed as roles have changed? While I’m looking, is 2FA setup for all accounts in accordance with the firm’s Written Information Security Plan (WISP)?
- Am I paying for multiple services to provide the same functionality? Can I cancel one or more if something else can do the same job?
- Is this tool still the best one for my firm? Will it help or hinder my growth plans in 2025?
- Do I own each of these accounts?
See Also: FTC’s New “Click to Cancel” Final Rule: What You Need to Know
Taking My Own Advice
Today, I decided to take some of my own advice and do a tech audit of some of my accounts. Just in my web hosting account, I found several hundred dollars worth of savings. Obviously, I’m still using my web hosting (you are reading this on my website, right?), but there was still a lot of bloat in there.
For example, in the past, my web host was responsible for my email. I had a Microsoft Exchange license through my web host, but had moved that account to Microsoft 365. But I still had this unassigned Exchange license that I was paying for. Deleted. That saves about $8 a month for just that one change.
Also, I have multiple domains. Some are being used, some are not. But they all had SSLs to make the site secure (that’s the part that gives the little padlock next to the URL and the URL itself starts with https). I have an unlimited SSL package, but some of the SSLs were being used as additional add-ons on other packages. All I had to do was move them to the correct package and delete the now unused add-ons. After making all these changes, I’m saving somewhere close to $500 annually.
And since I usually edit the websites directly and not through the web host, I didn’t pay attention to the PHP. Some of the sites were on old versions of PHP, which I was paying for the web host to support! By upgrading the PHP, I’m making the sites more secure and saving money!
That’s just some of the examples I found in just one of my tech accounts for my law firm.
Tech Audits Save Money
These weren’t big changes. But it is what happens with growth. Things change over time… an old plan is grandfathered in, but when you upgrade somewhere else, you never go to look at the plan to see if it still fits. Accounts are moved, but the old service never canceled.
But these things cost you money. Money that you can use to fuel your growth. It’s worth doing at least an annual tech audit.
The first time you do a tech audit, you’ll probably find a lot of bloat. If you do them regularly, each will get easier as you keep eliminating the bloat in your tech stack. However, it is easy to ignore during periods of fast growth.
It’s normal though. Don’t blame yourself for it happening. Normally, cutting expenses isn’t as important as growing the revenue. But when you have a few minutes or hours, take a look. See what you can save.
Let Springboard Legal Help You Save Money
Tech audits are just one way that we can help you save money in your business. That’s part of the job of a Fractional CFO, to find savings hiding in your financial statements.
Kimberly DeCarrera can also help you plan your growth, so that you have a plan that you know is within your power to execute to meet your goals.