The Risks of Unmanaged SaaS and How to Centralize IT Governance

Did you know that 90% of SaaS applications and 91% of AI tools are completely unmanaged? 

That means most companies have little to no control over the tools their teams are using. Yours might be one of them. But don’t worry, you’re not alone. The entire world is facing the same issue. Or maybe it’s better to say, the entire world is neglecting the risk that comes with it. 

Over the past few years, SaaS adoption has exploded. From project management to design to AI tools, there’s a SaaS app for everything. And guess what? It’s only going to grow from here. 

But more SaaS doesn’t just mean more convenience. It also means more risk. 

In this guide, we’ll break down what unmanaged SaaS really means. We’ll walk you through the biggest risks. And most importantly, we’ll show you how to take back control with centralized IT governance. 

What is Unmanaged SaaS? 

Unmanaged SaaS refers to software tools your team uses without IT’s knowledge or approval. You might hear it called “shadow IT.” It happens when employees sign up for apps on their own, often just to get work done faster. 

Sounds harmless, right? But without oversight, these tools can create major problems. These could be security gaps, compliance risks, and disorganized data. 

The key difference between managed and unmanaged SaaS is visibility. Managed apps are approved and monitored by IT. They’re secure, up to date, and aligned with company policies. Unmanaged apps? Not so much. They’re flying under the radar, and that’s where the trouble starts. 

What are the Risks of Unmanaged SaaS Applications? 

Talking about troubles, unmanaged SaaS brings plenty of them. And the longer it stays unchecked, the bigger the risks get.

1. Security Risks 

You might be wondering what’s the worst that could happen if you don’t manage your SaaS carefully? For starters, it opens the floodgates to security issues. When employees sign up for tools on their own, those apps usually skip the usual vetting process. There’s no review, no security check, no green light from IT. Just a quick sign-up and go. 

The problem with this is that these apps may not follow proper security protocols. They might be missing critical updates or patches. Some could have vulnerabilities that no one even notices until it’s too late. Without oversight, it’s easy for these shadow apps to become entry points for security breaches. 

2. Compliance and Regulatory Concerns 

Unmanaged SaaS also creates compliance headaches. Tools that haven’t been approved by IT often haven’t been reviewed for regulations like GDPR or HIPAA. They might store data in ways that don’t meet legal standards. 

And if your business handles sensitive customer information, this gets serious fast. Non-compliance isn’t just a technical issue; it can lead to lawsuits, fines, and a reputation that is damaged beyond repair. 

3. Increased IT Costs and Inefficiencies

Unmanaged SaaS doesn’t just bring security risks, it hits your budget too. When teams buy software on their own, they’re not thinking about licenses, renewals, or vendor negotiations. They just want to get things done. 

But without a centralized platform to track these apps, IT and finance teams are left in the dark. Employees often buy more licenses than they need. Many of them go unused, sitting there while your ROI drops. 

And since these tools aren’t officially managed, no one’s checking the fine print. Auto-renewals slip through. Vendors charge full price. The worst part is that your finance teams can’t spot where the extra spending is coming from. Over time, it adds up and it adds up fast. 

4. Data Fragmentation 

When different teams use different apps, your data ends up all over the place. There’s no single source of truth. You can’t integrate the data easily. Reports become inconsistent. Insights get lost in the mess. Each tool holds a piece of the puzzle, but without proper SaaS management, it’s nearly impossible to put it all together. This kind of data chaos makes strategic decisions harder and less accurate. And the more apps you have floating around, the worse it gets. 

5. Lack of Visibility and Control 

When everyone uses different tools, it gets hard to see what’s going on. Unmanaged SaaS leads to zero visibility. You don’t know which apps are in use, who’s using them, or what data they’re touching. 

Let’s say one team uses a file-sharing app that IT doesn’t know about. They upload sensitive data. No one monitors access. Then someone leaves the company and still has access to everything. That’s a huge risk businesses seem ready to take. 

Without proper control, you can’t manage access and permissions or enforce IT policies. There could be data leaks and compromised systems. And when something goes wrong, it’s tough to track where the issue started. That lack of visibility leaves your company exposed. 

6. Misplaced Contracts and Auto-Renewals

SaaS contracts should be easy to find. But in many companies, they’re buried in inboxes or random folders. When apps are bought without IT or finance involvement, no one tracks the paperwork. This becomes a nightmare during renewals when you’re scrambling to find the contract. And sometimes it’s just gone. Now you can’t negotiate because you have no clue about your last deal. You might even miss key terms like usage limits or termination clauses. 

Worse, some contracts auto-renew by default. If no one’s tracking them, you’ll keep paying for tools you don’t need. And if you try to cancel without the fine print? The vendor could hit you with surprise fees. No contract visibility brings legal risks, wasted spend on SaaS, and a whole lot of stress. 

7. Compatibility and Integration Issues

Every app in your stack should work well together. That’s the point of having a system. But with unmanaged SaaS, things get messy fast. Employees buy tools that don’t match your current setup. They don’t check if it integrates. They just started using it. But then… data won’t sync, workflows will break, and you’ll have a frustrated team. 

Imagine your sales team using one CRM while your marketing team uses another tool that doesn’t connect. The least you should expect is messy reports and duplicate data. And collaboration? Forget it. 

Worse, trying to force these apps to work together can lead to bugs, security gaps, and performance issues. It slows everything down. And instead of enabling growth, these tools start getting in the way. Without a SaaS management plan, your tech stack becomes a tangled mess. 

How Unmanaged SaaS Creates Supply Chain Vulnerabilities? 

IT spending is on the rise every year. And in 2025, SaaS spending alone is expected to grow by over 14% compared to 2024. That’s a big jump, and it comes with big responsibilities. 

With more SaaS apps in the mix, the risk of supply chain vulnerabilities grows too. Many of these tools connect directly to your core systems. If just one of them is poorly secured, it can open the door to serious trouble. 

Think of it like this: if one weak link in the supply chain breaks, the whole system feels the impact. Unapproved apps might not follow your company’s security standards. They may use unsecured networks. They often lack proper access control. And if they get compromised? Your data and your partners’ data are at risk. 

Mind you, cyberattacks don’t just hit one system anymore. They ripple through your vendors, your partners, your clients. All it takes is one unmanaged SaaS app to become the entry point. 

That’s why managing your SaaS stack isn’t just about internal control. It’s about protecting your entire ecosystem. A strong SaaS governance plan helps reduce these risks and keeps your digital supply chain secure from end to end. 

Manual SaaS Management is Not Viable 

Let’s be honest, tracking SaaS manually just doesn’t cut it anymore. Maybe if your company only uses 20 or 30 apps, spreadsheets and shared docs could do the trick. But today, the average enterprise uses well over 200 SaaS applications. 

Trying to manage all of that manually? That’s a full-time job for multiple people. And even then, things will slip through the cracks. 

You can’t get real-time visibility across the entire stack with a spreadsheet. You won’t get alerts when someone signs up for a new tool on their company card. Finance won’t know how much each team is really spending. 

Want to track usage, spot underused SaaS licenses, or know when contracts renew? Good luck doing that without automation. And when someone leaves the company, manual user offboarding becomes a nightmare. 

The result? SaaS goes unmanaged. It costs more and data becomes really disorganized. 

Manual SaaS management creates more chaos than control. If you want to reduce risk, save money, and stay compliant, it’s time to move away from the spreadsheets. Automation and visibility are the only way forward in 2025. 

Strategies for Managing Unmanaged SaaS Applications 

Unmanaged SaaS doesn’t fix itself. You need a plan that gives you control, visibility, and the ability to scale safely. Here are five strategies to help you get started: 

1. Inventory All SaaS Apps 

Before you can manage anything, you need to know what’s out there. Start by identifying every SaaS application your company is using. Yes, even the ones signed up for with a personal email. Talk to department heads, scan expense reports, and look for sign-up trails in company inboxes. You can’t fix what you can’t see. Once you have a list, sort them by usage, cost, purpose, and owner. This will help you figure out what’s essential and what’s just eating into your budget. 

2. Implement an IT Asset Management Tool

As we mentioned, manual tracking won’t work in the long run. You need a centralized platform that gives you full visibility into your SaaS ecosystem. That’s where an IT asset management tool comes in. 

It should show you what apps are being used, who’s using them, how often, and how much they cost. Beyond visibility, a good tool should support access control allowing you to set user permissions, authenticate users securely, and streamline onboarding and secure offboarding. 

When someone joins the company, they should get instant access to the tools they need and nothing else. When someone leaves, their access should be removed immediately. No loose ends, no security gaps. 

Usage tracking is just as important. You should be able to spot inactive licenses, identify duplicate tools, and see where spend doesn’t match usage. 

ZenAdmin is one of the best fits that does all this. It helps teams manage all the IT assets, user access, and SaaS subscriptions from one dashboard. If you’re looking to reduce chaos and improve security, it’s worth considering. 

3. Enforce Security Policies 

Once you know what’s in use and have control over it, put security policies in place. These don’t need to be overly complicated, just clear and consistent. Define how tools should be approved, who can request new software, and what criteria an app must meet before it’s used. You must also set rules for password hygiene, multi-factor authentication, and data sharing. Every team should know these policies and follow them. With security top of mind, you reduce the risk of breaches and data exposure. 

4. Conduct Regular Audits of SaaS

No business has a static SaaS stack. Employees are always on the hunt for new apps that will make them more productive and hence, they are added and others become obsolete. That’s why regular audits are a must. Every quarter, review your inventory. Look at license usage, check compliance status, and assess each app’s value. 

Are you still using it? Is it secure? Is there overlap with another tool? Use the audit to declutter, cut costs, and stay in control. These reviews also help you stay compliant with regulations like GDPR and HIPAA. 

5. Improve Collaboration Between IT and Business Units 

Managing SaaS isn’t just IT’s job. It’s a team effort. Business units often discover new tools that help them move faster and that’s a good thing. But they need to work with IT to make sure those tools are safe, efficient, and properly integrated. Your focus should be on building open communication between departments. Make the approval process quick but structured. Encourage teams to share feedback on the tools they use. When IT and business units work together, SaaS becomes an asset rather than a liability.  

Centralize Your SaaS and Entire IT Stack With ZenAdmin! 

The only way to tackle the risks of unmanaged SaaS is simple — start managing it. That begins with building awareness across your organization. Every SaaS app should be reviewed and approved before use. This one step alone sets the foundation for a clear, secure inventory of all tools in your stack. 

From there, you can use a platform like ZenAdmin to make the process seamless. With 130+ integrations and one powerful dashboard, you get complete visibility into your SaaS stack. It gets rid of shadow IT, saves you money, and is just a smarter way to go about SaaS management. 

Ready to take control of SaaS? Book a demo and see ZenAdmin in action.