Simplify Your Tech Stack: The Risks and Redundancies of HR Software Sprawl

The growing appetite for AI tools and other new HR software is expanding the waistlines of many HR technology stacks to unmanageable proportions.

As the number of platforms, point systems, and apps within HR technology ecosystems grows, CHROs often see a decline in the employee experience and the ROI from technology purchases, including artificial intelligence systems.

Many HR executives struggled with the problem of HR software sprawl even before the arrival of generative AI (GenAI) and agentic AI. The explosion of specialized new point solutions in areas such as recruiting, learning, and performance management convinced many HR leaders to add such stand-alone, best-of-breed technologies to core human capital management (HCM) platforms already managing employee records, payroll, and benefits.

But as organizations add those new systems, they’re often slow to decommission their outdated ones, a practice that creates redundancies, new data security risks, and unnecessary costs. Of late, the problem has been exacerbated by the rapid growth of shadow AI — the unsanctioned use of niche AI tools in the workplace — in both HR and the broader organization.

Double the Tech — and the Waste

Recent research reflects how the volume of technology tools within HR has expanded. On average, organizations are now using more than twice the number of HR technology modules than they were just five years ago, according to the 2024-2025 HR Systems Survey from the Sapient Insights Group in Atlanta. The report found that organizations in 2024 were operating 26 HR modules on average, while they used only 10 modules on average in 2020.

The Torii 2025 SaaS Benchmark Report, a publication on the use of software-as-a-service (SaaS) tools across industries, found that organizations waste over $1 million annually on SaaS tools — including those used within HR — that were purchased but go largely unused. More than 60% of software applications in the Torii report were inactive, yet companies continue to pay for them.  

The software sits fallow for several reasons, including poor adoption rates, the purchasing of more capacity than needed, and reduced headcount after software contracts are signed, the Torii study found.

A 2023 survey from Capterra, a software research and review firm, found similar eye-opening findings. One-third of respondents to the Capterra survey said their HR software applications don’t receive regular use, and 50% said their HR software performs overlapping functions. The majority of redundancies were found in recruiting and payroll.

More CHROs are beginning to pick up on the problem of unchecked HR software sprawl.

“Many of the HR executives I talk to are looking to move from a cacophony of HR technologies to a symphony,” said Christopher Fernandez, vice president of HR services and digital employee experiences at Microsoft.

Harsh Kundulli, vice president and HR technology analyst with Gartner, said the problem of software sprawl has many causes, but a significant one is competing internal priorities that aren’t adequately managed.

“Without a well-thought-out strategy and HR technology road map, you might see many different HR functional leads, like the head of a recruiting or a learning center of excellence, invest separately in their own technologies because of their own priorities,” Kundulli said. Lack of a coordinated, overarching strategy results in HR purchasing systems that don’t integrate well or that have redundant capabilities, he said.

Conduct a Technology System Audit

HR technology analysts say the first step in streamlining HR technology stacks and eliminating redundancies is to conduct an exhaustive inventory of all systems and apps operating today.

“Many leaders are unaware of all the shadow AI running in the company as well as all of the point solutions acquired since the last time they did a major HR technology strategy session or a major system update,” said Stacey Harris, chief research officer and managing partner of Sapient Insights Group.

Harris said an inventory of HR software should include:

• Records of all systems and modules in operation.
• Current software licenses and their expiration dates.
• Data imported and exported from systems.
• Workforce software owned by departments other than HR.

Creating such an inventory is often the exception rather than the rule for HR functions. The Capterra study found that only 44% of HR departments reported they keep a running inventory of all their various software apps and subscriptions. Almost one-fifth (19%) of respondents said they aren’t aware of all the HR apps they own or use.

Mark Stelzner, founder and managing principal of IA, an HR advisory firm in Atlanta, said reviewing SaaS contracts should be an integral part of creating an HR technology inventory.

“We find many HR organizations haven’t dusted off or looked deeply into their vendor contracts for some time,” Stelzner said. “But they need to understand contract terms regarding termination and automatic renewal dates, compliance requirements, and factors like the optimum timing for moving a service from a point solution provider to a HR suite provider.”

Part of the answer to improved oversight of SaaS contracts, ironically, is more technology. Analysts say the use of next-generation SaaS management software tools can help centralize software policy management, monitor software usage and costs, and keep closer tabs on things such as automatic renewal dates.

Deciding What to Keep, Consolidate, or Retire

Once a technology inventory is done, the next step is to determine which HR tech platforms to keep, which to consolidate, and which to retire.

Some HR executives take extreme measures to get software sprawl under control. Ben Eubanks, chief research officer for Lighthouse Research & Advisory, an HR technology consulting firm in Huntsville, Ala., knows of one consumer products company that had the number of its recruiting technology platforms mushroom to 12 in just a few years.

“HR’s answer to that sprawl wasn’t to eliminate those systems one by one but rather cut them all off at once,” Eubanks said. “They opted to consolidate everything into one new, fully featured applicant tracking system. The idea was to level set and, if needed, start adding back specialized point solutions one by one when justified.”

Retiring HR software that’s no longer in regular use is often easier said than done. For example, the Capterra study found that between getting approvals from multiple stakeholders, waiting for HR vendor software contracts to end, and migrating data to new software tools, 68% of respondents said it typically takes at least four months in their organization for a software system that’s no longer useful to be fully removed.

Because of the time and effort involved, many organizations avoid or delay the software decommissioning process. The Capterra study found that only 28% of HR functions said their company has formally retired software that it does not need or use.

A Cluster Approach to Software Investment

A strategy recommended by the Sapient Insights Group to help streamline technology stacks is to adopt a “cluster” approach to future software investments. The strategy represents a happy medium of sorts between purchasing all-in-one HR technology suites and stand-alone, best-of-breed point solutions for specific HR processes.

“We’re hearing pretty loudly from HR buyers that they’re tired both of the all-in-one approach and the point system approach because neither of those two models have really worked for them,” Harris said. The point solution model enables HR to address critical business processes that require more specialization than a comprehensive HCM suite can provide. But the downside is those stand-alone tools often don’t integrate well with existing HR software.

The cluster approach requires HR to first identify its anchor or high-priority HR system(s), which may be an HCM but could also be a workforce management system if a company has many hourly workers or a learning management system if an organization is focused on development. After that, they build satellite tools around them to fill key functionality gaps.

“Many anchor vendors typically have already created open application programming interfaces [APIs] in their ecosystems for integrations,” Harris said. “So, even if a point solution or app that’s partnered with an anchor system isn’t everything HR needs, the cluster approach still provides an advantage because it makes it easier for HR to get data in and out of its different systems. In the age of AI, good data aggregation and integration has become essential to making improved, data-driven business decisions.”

Kundulli of Gartner said his firm’s research shows that most large and midsize organizations with all-in-one HCM suites still need to augment those comprehensive platforms with specialized point systems or apps. “That’s because the pace of innovation and change is so fast now that no HCM suite can hope to keep up with it,” Kundulli said.

Require Subtraction Before Addition

Some organizations have taken a more creative approach to conquering software sprawl. Eubanks knows of an IT group in a government organization that had seen the number of apps in HR, finance, marketing, and other departments proliferate over the years. The group knew it had to take some action.

“The IT department said from now on, when any function came to it requesting a new app or tool, they had to pick two others currently in operation they would retire or sunset at the same time,” Eubanks said. “That placed the responsibility on the people bringing the request to do their homework to find tools that could do both A and B, not just A or B.”

Stelzner said he’s seeing more HR executives seek to streamline their tech stacks by creating fewer, deeper relationships with third-party technology vendors.

“They’re looking for as much delivered functionality as possible from their core HR systems and reducing the number of point systems, particularly in categories where they feel the technology isn’t a differentiator in terms of their value proposition,” Stelzner said. “Part of the reason is to simplify navigation of those systems and improve the employee experience because people are getting lost among the mass of proliferating tools.”

Dave Zielinski is a Minneapolis-based business journalist who covers the impact of emerging technologies on the workplace. He is a frequent contributor to SHRM publications.