As Potential Recession Looms, Flexera State of ITAM Report Shows Wasted Spend Remains High Across the IT Estate

The full survey results are available in the Flexera State of ITAM Report, which can be downloaded at https://info.flexera.com/ITAM-REPORT-State-of-IT-Asset-Management.

The report enables IT leaders to benchmark their ITAM practices and results against those of other organizations. It explores the thinking of 500 global professionals who manage and participate in ITAM, SAM and HAM processes in medium and large organizations of at least 1,000 employees.

“High-performing ITAM teams continue to be on the forefront of cost savings and modernization,” said Steve Schmidt, vice president of product management at Flexera. “With economic headwinds on the horizon, ITAM, SAM and HAM professionals need to continue to improve processes to identify underutilized software, and to optimize licenses for modern software in the cloud, SaaS and containers.”

A few key highlights from the Flexera State of ITAM Report:

• ITAM is a critical and strategic function in the enterprise: As global economies teeter on the edge of recession, the importance and influence of ITAM teams are increasing. This year, 43 percent of ITAM teams report directly to the CIO/CTO; nearly twice as many as last year, when that figure was just 22 percent.
• Asset management challenges: Wasted spend remains a top challenge for organizations: Respondents reported 38 percent wasted spend on desktop software, 34 percent wasted spend on data center software, 33 percent wasted spend on SaaS and 33 percent wasted spend on IaaS/PaaS. ITAM teams report that the most significant challenges are dealing with new environments (SaaS, cloud, containers) and the complexity of software vendor use rights (both named as the biggest challenge by 32 percent of respondents).
• Key areas of savings: High-performing ITAM teams continue to be on the forefront of cost savings and modernization. SAM programs were most successful in realizing savings through reuse of (non-cloud) licenses to avoid buying new ones (83 percent), better negotiation of vendor contracts (83 percent) and reduction of maintenance spend on unused software (81 percent). The survey also found that savings from SAM programs increased as programs matured.
• SaaS remains a top initiative for SAM teams: Respondents still struggle to implement best practices for governing the use of SaaS and optimizing SaaS spending, with less than half (48 percent) tracking usage and rightsizing overall SaaS contracts. Year over year, the most significant gains were rationalization of redundant SaaS apps (19 percent in 2021 to 36 percent in 2022) and linking all major SaaS apps to single sign-on (43% to 55%).
• Annual spend on SaaS: The largest organizations—those with more than 100,000 employees—spend an average of $64 million on SaaS.
• Relevance of vendors and audit activity: 52 percent of respondents reported a Microsoft audit in the past three years, followed by IBM (34 percent) and Oracle (31 percent).
• Cost of audits: 14 percent of respondents reported paying more than $5 million in software vendor audits (including penalties and unbudgeted true-ups) over the past three years.
• ITAM success metrics don’t align with day-to-day cost activities: Despite mounting pressures to optimize costs, SAM teams are predominantly measured on audit-related, rather than cost-related, activities.
• Improving data in CMDBs makes a big difference: IT visibility remains limited as 65 percent of respondents said they don’t have accurate visibility into IT assets that impact business outcomes. As organizations increase their use of transient assets such as cloud instances or containers, they must reassess their IT asset tracking procedures to ensure their configuration management databases (CMDBs) don’t become bloated with irrelevant entries.
• European spotlight: The Flexera State of ITAM Report also compares/contrasts the global survey with those respondents based in Europe. For example, European SAM teams are more strapped for resources than those in North America: 78 percent in Europe name lack of resources on SAM team as a challenge (37 percent significant and 41 percent somewhat). More than four-fifths (88 percent) cite amount of time/money spent responding to audits as a challenge (27 percent significant and 61 percent somewhat).