Ask IT what the organization spends on software and you will get a number based on contracts IT knows about. Ask finance and you will get a number from the general ledger. Both are usually too low, because a growing share of software is bought by teams on cards and expense claims, outside both processes.
Spend analysis fixes that by following the money, wherever it goes.
Who buys software today
When buying is spread across hundreds of cost centers and cardholders, no single report shows the total. The analysis has to be assembled.
The four sources to combine
Invoices from software vendors and resellers. The largest single source, but resellers hide the underlying product.
Subscriptions bought directly by teams, often monthly, often renewing for years.
Small subscriptions reimbursed to individuals, easy to miss and quick to multiply.
Software bought through a cloud provider's marketplace appears on the cloud bill, not as a software vendor. See AWS Marketplace spend.
Each source adds to the total. In a typical first analysis, the picture changes noticeably once cards, expenses and marketplace purchases are included:
How to run the analysis
- Extract twelve months
Transactions from each source, so annual renewals and seasonal purchases are included.
- Filter for software
Use vendor category codes, known vendor lists and keywords such as "subscription", "license", "SaaS" and ".io".
- Normalize vendor names
Combine variations of one vendor, and look through resellers to the products. See software normalization.
- Classify by capability
Collaboration, CRM, design, security, analytics, and so on.
- Rank and flag
Rank vendors by spend, and flag those with no contract on file, many small purchases, or several tools in one category.
What you will typically find
Bought by different teams for the same job.
To the same vendor, which could be one company agreement at a better price.
No notice dates, no owner and no protection.
Hiding which products you are actually paying for.
Turning findings into savings
How MI One helps
Frequently asked questions
How far back should we look?
Twelve months captures annual renewals and seasonal purchases.
Should we stop teams from buying software on cards?
Not necessarily. Make the approved route easier, and review card spend monthly. See SaaS approval workflows.
How often should the analysis be repeated?
A full analysis once a year, and a monthly review of new software transactions.
Sources
- Zylo, "2025 SaaS Management Index," January 16, 2025. https://zylo.com/news/2025-saas-management-index