IT spend has risen for years as organizations invest in new, disruptive technologies to improve their business outcomes. And the trend shows no sign of slowing. More than half of the respondents in the Flexera 2020 State of Tech Spend Survey expect their organizations to increase IT spend in the next year. Much of the increase is driven by large-scale enterprise projects, with digital transformation, cybersecurity and cloud first/cloud migration projects topping the list of priorities.
The reality is that companies often aren’t spending money on their IT as efficiently as possible. And the Flexera 2020 State of Tech Spend Survey indicates that organizations don’t have a realistic picture of how much is misspent. Survey respondents estimate organizations are wasting about 12 percent of their IT spend. But research by Flexera and other industry experts believe that figure is 30 percent or more. That’s a huge amount of waste when you consider that more than one-third of respondents report their organization’s IT spend to be at least $250 million.
Reducing waste and optimizing IT spend present an opportunity for huge savings—money that you can repurpose to pay for new initiatives and increase the return on your tech spend.
So what’s standing in the way?
The Flexera 2020 State of Tech Spend Report provides insight into what’s hampering efforts to identify waste and optimize spend. Figure 1 shows the significant obstacles that survey respondents cite in gaining visibility into IT spend. The top three are reporting on spend by delivered IT business service, collecting IT spend data and reporting on IT spend by application.
While most organizations have effective processes to track spend by vendor, it’s more challenging to track spend by the delivered business service or the application. Today’s business services and applications encompass multiple components and applications from numerous vendors. They may share hosts, storage, processors, cloud resources and databases with other services. IT must aggregate spend across all assets and resources regardless of where they reside—in traditional data centers, SaaS vendor environments, or multiple public and private clouds. Cloud’s dynamic nature further obscures visibility.
There are also challenges in managing IT spend. Figure 2 shows that manual processes are the biggest obstacle survey respondents face, followed by ensuring spend efficiency (avoiding waste) and understanding the cost of delivered services.
Decentralized control over IT spend is a major factor in limiting visibility into spend. Business units are increasingly making their own decisions about technology acquisitions. According to the Flexera 2020 State of Tech Spend Survey, business units now control 26 percent of IT spend. Building an enterprise-wide picture of spend in this environment involves rolling up and rationalizing data across multiple business units that employ diverse processes and technologies to capture and maintain the data.
Shadow IT is another culprit. Organizations often find themselves on the hook for SaaS subscriptions that are invisible to IT and are automatically renewed year after year, even if they’re no longer used.
Get help from an industry leader
Do you want the visibility and control needed to eliminate waste and optimize IT spend in a complex, dynamic IT environment? You can get it by partnering with Flexera, a leader in providing solutions to IT executives. We’re the only company recognized by Gartner as a 2019 Magic Quadrant Leader in both Software Asset Management Tools and Cloud Management Platforms.
Flexera solutions help you:
- Gain visibility into and control of cloud costs to optimize your cloud resources
- Automate discovery and optimization of SaaS solutions across the enterprise
- Effectively manage software licenses across desktops, laptops and other client devices
Cloud cost management
Optima offers extensive functionality for cloud management across multi-cloud environments. With its unique approach, Optima enables cloud governance teams to work collaboratively with business units and cloud resource owners to reduce waste while optimizing cloud spend. With Optima, you can:
- Create a complete picture of cloud costs with combined billing data and detailed usage data
- Display cost data across multiple cloud accounts in a single dashboard
- Offer smart recommendations for reducing cloud costs
- Forecast future spend for new or existing workloads
SaaS Manager eliminates manual tracking of SaaS applications within the organization. With SaaS Manager, you can:
- Discover more than 32,000 different SaaS applications
- Identify which applications are shadow IT and which are sanctioned
- Figure out who purchased which applications and what each one costs
- Generate customizable spending reports, monitor SaaS usage in real time, track SaaS expenditures across departments and gain up-to-date visibility into spend at the user level
Software asset management
FlexNet Manager for Clients automates your license management, eliminating cumbersome, error-prone and inconsistent processes. With FlexNet Manager for Clients, you can:
- Optimize software licensing from a consumption standpoint while maintaining continuous compliance and minimizing audit risk
- Manage vendor contracts proactively to reduce software maintenance and subscription costs
- Reclaim unused licenses, optimize renewals and reduce denials of service
- Improve operational efficiency with automated management
With Flexera as your partner, you can reduce waste in your IT spend and enjoy huge savings that go right to your bottom line.
Contact us today to learn how Flexera can help you transform your IT and accelerate your business.