State of ITAM for Government Organizations

Digital transformation has been extremely impactive and a term heard around the world in almost every industry, government included. Traditional roles of information technology asset management (ITAM) and software asset management (SAM) need to evolve and change to go beyond compliance and audits to ensure service is aligned with strategic IT initiatives that span across complex hybrid IT environments.

In mid-2020, Flexera conducted a survey with 461 global IT professionals (56 of whom were in government) that play significant roles in the SAM and ITAM processes within their organizations. The survey results were compiled and released in our inaugural Flexera 2021 State of ITAM Report. The report details the importance of IT asset management along with the current maturity of today’s ITAM teams; by determining the value they are delivering to their organization and how they serve the needs of the digital enterprise.

Why it matters where ITAM teams report

The reporting structure of ITAM teams can impact the focus of IT efforts, and typically influences the entire organization’s efforts. The figure below compares the diversity of where these teams report within Governmental organizations and the global comparison; showing that 5% more government ITAM teams report to the CIO/CTO. Despite their size, SAM teams are a critical element to understanding and controlling IT spend. They can greatly affect organizational efforts and the measured success of the IT organization.

Why Cross-Functional Collaboration is Important

SAM teams are a critical ITAM component and the ability to interact broadly with other IT functions can improve the success rate to accomplish their goals. Global SAM teams reported the most interaction with Infrastructure Management (55%), while government SAM teams reported 45% interaction. However, 50% of government SAM teams reported interaction with IT Service Management functions while global teams had 48% interaction.

While few SAM teams had significant interaction with the CIO/CTO (27% globally), an even smaller amount interacted with the cloud teams (24%). Government organizations had 32% of their SAM teams interacting with the CIO/CTO, and 20% interacting with the cloud teams. It’s important for SAM teams to address these gaps to ensure visibility and relevancy as IT becomes increasingly cloud-centric.  

Software Optimization is impacted by SAM Maturity

For over the last decade SAM processes and best practices have been defined and refined. However, still less than half have made the step to advanced maturity. The responsibilities of SAM teams can be affected by where your organization falls on the maturity scale, and in the end determine the success your organization as a whole can achieve.

Those teams who tend to implement and focus mainly on audit and discovery, are in the beginner maturity level. Intermediate maturity can be defined when an organization implements ongoing tracking of software and the use of license positions, which are a precursor to being able to optimize activities. The image below compares where government organizations fall on the SAM maturity stages. 41% of government respondents have reached the advanced stages, compared to the 45% global respondents. SAM teams create the biggest impact to your organization, so it’s important to continue to work toward fully optimizing your software.  

With maturity level affecting the responsibilities of SAM teams, it’s critical to broaden focus from basics such as software discovery, toward growing cloud and container environments. While SAM teams are often small, their responsibilities increase as SAM practices mature and organizations expand. It’s essential that SAM leaders enable their teams to fully impact their organizations strategic goals by prioritizing advancement through the maturity stages.

Is delivering value by reducing waste a challenge or opportunity?

Although minimizing wasted IT spend provides opportunity for savings or reallocation, it’s absolutely a challenge, and a large one in all organizations including government. With decentralized ownership of technology (SaaS, cloud, containers, and more) they can contribute to gaps in spend control and governance. Flexera found that respondents estimate 25% IT waste (desktop software, data center software and SaaS) on average, while most analysts estimate it to be at least 30%.

Flexera asked survey participants in all areas of the ITAM maturity stage to rank spend optimization. While all 5 challenges are the same, the order and rank of the challenges differed depending on where the organization fell on the maturity stage. Organizations who work to create scalable ITAM programs to keep up with strategic initiatives will continue to push the scope of SAM team responsibilities beyond audit and compliance.

COVID-19 and the push of SAM initiatives toward cost savings

SAM initiatives will often align with cost savings, and for good reason, 69% of global organizations and 62% of government organizations are planning to focus on optimizing and saving on software spend and within the next 12 months.

 

With the challenges of COVID-19 pandemic materializing, organizations are focusing on reducing cost structure and becoming more efficient across the entirety of their spend. With SAM teams expected to deliver much of those savings, there is an increased focus on SAM best practices. 15% of global respondents compared to 21% government organizations say they will have a decreased focus on audit response, however this year analysts are predicting that there might be an uptake in vendor audits to reduce negative revenue resulting from the pandemic.

 

Aligning SAM team’s success metrics to key Initiatives

The top 3 metrics that government SAM teams focus on are all related to cost savings, such as ‘hard’ savings on software, cost avoidance, and accurate license positions. This differs from the other global respondents whose initiatives are more geared toward compliance.

For most organizations, cost optimization activities translated directly into the greatest savings. These activities include reusing existing licenses, savings that result from vendor negotiations, and reducing maintenance spend on unused software. While government organizations have better alignment for SAM success metrics and organizational goals, it’s always important to continue to optimize success metrics to reflect outcomes from these types of activities to measure the true impact on strategic initiatives.  

Journey toward scalability and maturity

Digital Transformation continues to be an important driver for organizations looking to increase savings and enhance their ITAM/SAM teams.

As organizations grow, it’s important for SAM teams to do the same by transitioning away from just compliance metrics. By advancing along the maturity stages and implementing best practices, your team can grow and focus on delivering initiatives that align with the overall business goals. With a growing focus on key initiatives such as cost savings, connecting with the CIO/CTO, and increasing cross functional collaboration beyond the IT organization, you can ensure the impact is delivered strategically to the entire organization.

By leveraging data and focusing alignment on key initiatives, government IT professionals can benchmark their own ITAM success and create both organization-wide success as well as significant cost savings.

Download the Flexera 2021 State of ITAM Report now for more insights and details regarding the maturity and impact of ITAM/SAM teams.