Is tech sprawl hurting your business?

Technology is designed to make our lives easier with real-time insights, analytics, and collaboration and communication tools. This is instrumental in managing on-site teams as well as today’s remote and hybrid workforce. But how much is too much? In an attempt to support various preferences, many companies have become weighed down with too many SaaS options and redundancies. This more-is-better mentality often hurts productivity, hinders our ability to serve the customer, fragments workflows, and cuts into our bottom line.

What is tech sprawl?

Tech sprawl refers to the uncontrolled proliferation of technology without considering its long-term effects. This can result in fragmented systems, increased cost, and added security risk. Consider the myriad of applications in use across your organization today and ask yourself:

• Are any unused or underused?
• Are separate similar apps in use within different departments and therefore hindering team collaboration?
• Does the quantity of apps available confuse or overwhelm employees who may not know which app is used for what purpose?
• How has the quantity of apps affected the employee experience?
• Are all apps adequately vetted to ensure security standards?
• Have they increased IT tickets?
• Have they decentralized data management?
• And have any increased in cost since your original decision to use them?

Many organizations use numerous SaaS applications to support the same purpose.

The Risk

While technology can provide significant value, uncontrolled growth and disparate systems can also lead to waste. Let’s take a look at some of the ways in which tech sprawl can affect your business.

Data fragmentation. Tech sprawl can lead to the fragmentation of data across multiple systems and platforms. This can make it challenging to have a comprehensive view of business information, such as financial data, performance metrics, and trends. Without centralized and integrated data management, it might also be difficult to generate accurate and timely reports or conduct meaningful analysis.

Inefficient workflows. When various technology solutions are adopted without consideration for integration, this can make workflows inefficient. Staff members may need to duplicate efforts, manually transfer data between systems, or navigate multiple interfaces, reducing productivity and increasing the probability of error.

Security vulnerabilities. Each additional solution introduces a greater potential for security risk. Without a centralized approach to tech management, organizations may struggle to implement consistent security measures across all systems. In the end, you could face data breach, unauthorized access to sensitive information, or other cybersecurity incidents that jeopardize data integrity and put your business at risk of costly legal action.

Training and support challenges. When you adopt multiple technology solutions, staff members need to learn and adapt to different platforms. This increases training and support needs, especially if systems are complex or if they lack intuitive interfaces. Inadequate training and support can hamper the effective use of technology, reducing its overall value.

Compatibility issues. Tech sprawl can result in compatibility issues between different systems. Incompatibilities may arise in terms of data formats, integration capabilities, or system requirements. This may hinder the smooth transfer of data and information between systems, creating data inconsistencies and opening up the potential for errors. Beyond this, issues can arise in established integrations/APIs when one system performs an upgrade, which can break the link and require additional programming.

Increased cost. Maintaining multiple technology solutions can increase the cost of licenses, subscriptions, maintenance, and support. Without a centralized approach to technology management, organizations may miss opportunities for cost savings through volume discounts or a more strategic investment in a unified system.

What we advise.

To mitigate risk associated with tech sprawl, AAFCPAs encourages clients to implement a strategic approach to technology adoption and management. This can begin with a comprehensive assessment of current systems, where you define clear goals and requirements, seek integrated solutions that address multiple needs, and establish robust data management and security protocols. Further, organizations are advised to promote collaboration between IT and business units, prioritizing scalability and long-term planning when adopting new technologies.

It is critical to ensure that all aspects of business processes are properly managed, that they maintain compliance, and that they maximize productivity and profitability. Centralizing technology can improve efficiency, data integrity, and overall business effectiveness.

If your organization could benefit from consolidated systems or a new approach to application management, please contact Robyn Leet, Partner, Business Process Assessments & Attestations at 774.512.4010 or rleet@nullaafcpa.com—or your AAFCPAs partner.