The short answer: A company doing well over a hundred million a year was waiting up to six months between finishing work and being paid for it, and borrowing at commercial rates to cover the gap. The tool that closed it was a capability inside software they already licensed and had never switched on. The gap went from six months to about three or four weeks. This is the ordinary case, not the unusual one, because buying software and using it are separate acts that nothing connects.
The brief was a profitability question nobody in the building could answer, and the people who could not answer it were good at their jobs.
Somewhere in the middle of that engagement I found something nobody had asked me to look for.
Work was completed, and then invoiced later, through a manual chain of steps nobody had ever timed end to end. The elapsed time between finishing a piece of work and the money arriving ran to six months.
Meanwhile the company was carrying bank debt. So that gap was not an efficiency annoyance. It was being financed, at commercial interest rates, month after month, as a direct consequence of the billing moving slower than the work it was billing for.
The part that still bothers me
The fix was a capability that collapsed the manual chain, so an invoice was raised at the point the work was finished rather than weeks after it.
They already had it.
Not something similar. Not a competing product they should evaluate. It was included in a platform they were already licensing, already paying for, and already using every day for other things. Somebody had bought it years earlier. Nobody had ever switched that part on.
Once it was running, the cycle went from six months to about three or four weeks, measured from the point the work was finished.
I want to be careful about what I am claiming there. That is a cycle time, not a margin figure. Every recommendation from that engagement was adopted, but I never saw the after number on gross margin itself, so I am not going to tell you what happened to it. The cash conversion improvement I can stand behind, because it was measured.
Why this happens, and it is not carelessness
Gartner, in an October 2021 infographic titled Why Are You Wasting Your SaaS Expenditure? (behind their client wall), estimated that around a quarter of software spend would be underutilized or overdeployed. Treat any single estimate carefully, and note that I could not find that figure reported anywhere ungated that was not itself selling software asset management. But the direction matches what I find when I go looking, and the reason is structural rather than a failure of attention.
Buying and using are different acts, done by different people, at different times.
Software gets bought by whoever holds the budget, usually in a moment of urgency, on the strength of a demonstration of what it could do. Using the part that mattered requires somebody else, months later, to change how a team actually works, at a point when the urgency has passed and the invoice has already been paid.
Nothing in the middle forces those two events to meet.
And the failure is invisible from every seat. The people who felt the six month wait did not control the software. The people who owned the software did not feel the wait. Finance saw an approved line item that had never once been flagged. Every one of them was doing their job correctly, and the answer sat between them where no job description reached.
That is why an outsider finds these. Not because the outsider is cleverer. Because the outsider is the only person standing outside all of the departments at the same time.
What is shelfware, and why is the expensive kind invisible?
When people hear “unused software” they picture a subscription nobody opens. Those exist, they are easy to find, and canceling them is a small win.
The costly version is different. It is a capability inside a tool you use every day, which nobody has turned on, because turning it on would require a team to change its habits. That one does not show up on a spend audit at all, because the line item is genuinely in use. It only shows up if somebody compares what the license includes against what the organization actually does.
Nobody is assigned to make that comparison. It is not anyone’s job, in any company I have worked in.
How do you find capability you are already paying for?
Two lists, and they take an afternoon.
First, your three most painful manual processes. The ones where somebody re-keys data, chases paperwork, or waits on a person to be back at a desk.
Second, what your existing tools actually include. Not what you use. Open the plan you pay for and read the feature list as if you were evaluating it fresh.
Then put the lists side by side. The overlap is free, and you have already bought it.
If nothing overlaps, you have lost an afternoon and learned that your spending is tight, which is worth knowing. In my experience something always overlaps.
So what
The question that would have saved that company six months of financing costs is not sophisticated. It is: what do we already own that touches this?
It goes unasked because it feels like a question with an obvious answer, and because asking it implies somebody should have asked it earlier. That second part is the real obstacle. Auditing what you already bought is uncomfortable in a way that buying something new never is, which is exactly why the new purchase is the easier decision and usually the wrong one.
If you would rather have somebody from outside make that comparison with you, that is what I do for money, and I will tell you when the answer is that you do not need me.
Everything above is first hand. No client is named, and identifying details have been omitted or generalized. The external estimate here is named and dated above, but the source is behind a paywall, so you cannot check it without a Gartner subscription. I would rather tell you that than send you to a vendor blog quoting the same number while selling the fix.
Related reading
- Everyone Hit Their Number: two departments handed targets that could not both be met, and the argument that was the evidence.
- Being Right Is the Cheap Half: why finding these is the easy part, and being believed is what costs money.