Dive Brief:
- More than one-third of desktop software spending and roughly one-third of annual investment in data center software, SaaS, IaaS and PaaS is wasted, according to a Flexera report released Wednesday.
- Fewer than half of 500 IT executives surveyed over the summer said their organization tracks SaaS usage to align contracts with software needs, leading to app redundancy and unnecessary spending.
- The struggle to implement best governance practices for SaaS use and spending remains a challenge, the report said. Only 35% of companies have complete visibility into IT assets and their impact on business.
Dive Insight:
The proliferation of “as a Service” technologies and public cloud infrastructure services poses a significant challenge for IT asset management teams tasked with cutting wasteful spending and reaping value from sourcing decisions, the report said.
The complexity of software vendor use rights was similarly cited as the major cost management challenge by nearly one-third of respondents.
Eliminating redundancy and waste isn’t always the easiest path to trimming budgets, but it’s often the best way to get the most out of each dollar spent.
While IT budgets have so far escaped major cutbacks, inflation has taken a bite and belts are tightening. Finding ways to reduce IT costs without eliminating tech capabilities is the target organizations are aiming at.
Companies have realigned reporting structures as pressures to meet demands for more efficient software spending.
The number of IT asset management teams reporting directly to a CIO or CTO has nearly doubled since last year, up to 43% from 22%, according to Flexera.
And teams are finding ways to cut waste. The most successful software asset management teams were able to avoid purchasing new software licenses through the reuse of existing ones, the report said. Negotiating better vendor contracts and reducing maintenance spending on unused software were two other effective ways to realize savings.
