If you’re an IT leader at a large enterprise, you probably know the feeling: A vendor audit letter lands on your desk, and suddenly your team is scrambling to prove compliance, justify spend and decode the fine print of complex software agreements. The Flexera 2025 State of ITAM Report makes it clear these scenarios aren’t the exception, but the rule. Nearly half of organizations have paid over $1 million in audit fines in the past three years, and the risks are only growing as cloud and SaaS adoption surge.
But there’s good news: Leaders who act now can turn audit anxiety into a strategic advantage. Let’s take a look at some of the latest trends, hidden risks and actionable insights that’ll help you protect your budget and unlock IT value in the year ahead.
Audit fines are draining millions from IT budgets every year
The cost of audits remains high on the priority list for today’s tech leaders. In fact, over the last three years, 45% of companies have paid more than $1 million in audit fines—and Microsoft, IBM and SAP are the companies most often auditing. Audits can reveal significant gaps in understanding how licenses are applied and used. The complexity of software use rights, combined with the rapid shift to cloud services, make it increasingly difficult for IT teams to defend against audits. It’s not just about the financial penalties; it also underscores the need for more robust and integrated IT asset management practices.
The growing complexity of software licensing is yet another struggle—and in just a few years, it’s jumped from sixth place to the top significant challenge plaguing organizations today. The primary culprit? We believe it’s an impact from the ongoing migration to cloud environments, which introduces a new layer of intricacy in managing and optimizing software assets. Combine this with the limited resources available to software asset management (SAM) teams and you get an environment that makes it hard for good SAM strategies to be put into place. This resource constraint is a double-edged sword because it not only affects how we can manage our current assets but also limits how we can adapt to new and changing cloud technologies.
On a more positive note, we’re seeing a significant increase in collaboration between ITAM and FinOps teams. This collaboration has grown by 6 percentage points year over year worldwide, and even more impressively, by 14 percentage points in Europe. This collaboration is key for managing software in the cloud—and with the focus on cloud license management becoming widespread, it’s a collaboration that will only need to grow. Furthermore, the tracking of SaaS use and the rightsizing of cloud contracts have both seen big increases. Over the past two years, they have improved by 7-8 percentage points. This is good news because it shows that organizations are taking steps to better manage their cloud resources—and it’s important in a time when cloud services are becoming business critical.
Cross-functional collaboration is reshaping ITAM success stories
Collaboration is key, keep it up: Audit defense, licensing management and cost optimization all require strong partnerships across ITAM, FinOps, security and vendor management teams. Practical steps to promote these efforts include:
Establish regular joint reviews between ITAM and FinOps teams to align cloud and SaaS spend. Regular communication helps identify and address issues before they escalate
Encourage cross-training and shared KPIs between ITAM and FinOps teams. Shared KPIs align goals and encourage a unified approach to managing software assets and financial resources efficiently
Foster strong relationships with vendors to clarify ambiguous licensing terms. Vendors are more likely to provide support and flexibility if you engage in open and regular dialogue about licensing and cost optimization
Collaborate with security teams to maintain compliance and protect assets. Joint efforts can help prevent breaches that lead to costly penalties and audits
Why visibility is your strongest defense
Insight into your entire technology landscape is essential, and this year’s findings show that despite high visibility into on-premises hardware and software, organizations are still struggling with SaaS and cloud visibility especially concerning bring your own licenses (BYOLs). That’s a big red flag considering the surging spend in these areas. Seventy-six percent of respondents in this year’s report reported visibility into on-premises hardware, 75% into software and 63% into cloud instances, but only half feel confident in SaaS visibility and a mere 27% are comfortable with their BYOL positions.
The overall confidence of respondents in their IT visibility also dropped from 47% to 43%, which underscores the increasing complexity and the urgent need for enhanced tools and processes. It’s imperative to bridge this gap to ensure compliance and cost optimization.
Given these challenges, what steps can you take to stay ahead? These tips are a great place to start:
Invest in tools that provide real-time tracking of license usage, application of product use rights and compliance. Detailed usage data and product use rights analysis can make huge differences in how you view license compliance and determine how much you need to renew
Define roles and responsibilities for managing new technology domains such as SaaS applications and cloud licenses and AI spend. As organizations invest more in these technologies, leaders will want to understand their return on investment and if these new technologies are secure and used efficiently
Maintain up-to-date documentation. You need to ensure teams have a clear understanding of what they’re managing. Keeping up-to-date documentation on policies, roles and responsibilities helps teams make informed decisions—and avoid costly mistakes
Integrate ITAM and FinOps processes to achieve end-to-end visibility and control. This ensures that financial and operational data are aligned, enabling better decision-making
Automation is unlocking new levels of efficiency and savings
Manual processes aren’t sufficient to manage the rapid growth of cloud and SaaS environments—and without automation, you risk falling behind and facing compliance issues. Consider these tips as you work toward improving or automating processes within your organization:
Leverage automation to manage and optimize license entitlements, usage and compliance in real time, ensuring that you’re always in control. This reduces the risk of over-provisioning and underutilization, leading to cost savings
Regular internal audits are essential to maintaining compliance. By swiftly identifying discrepancies and areas of non-compliance, you can take immediate action, reducing the risk of penalties and ensuring that your assets are managed effectively
Share data and insights across teams to identify savings and reduce shadow IT. This helps in making informed decisions, optimizing resources and ensuring that all departments are aligned with your organization’s financial goals
Refine your process along the way. Process improvement and automation aren’t one-time tasks but continuous efforts. This ensures that your teams remain effective and efficient in managing software assets, even as the landscape evolves
The blueprint for resilience in 2025 and beyond
Collaboration, the fundamental need for enhanced visibility into IT assets, the power of automation and real-time tracking tools help address the challenges that IT leaders face. But this is a continuous journey, and IT leaders must commit to ongoing improvement to protect budgets and drive IT value in 2025 and beyond, as the future of IT management depends on it.
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