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Optimizing IT Costs to Drive Digital Transformation

Collaborative office environment with people engaged in various work tasks for enhanced productivity and teamwork

Research shows that 83% of IT Departments are feeling increasing pressure to deliver more with less. And 92% of IT leaders have expressed concern about budgets and headcount in today’s economic climate. So, what’s an enterprise to do? How can IT leaders create budget and drive digital transformation in the face of economic belt-tightening? The answer lies in optimizing current IT costs and zeroing in on waste and overspending.

Where is IT commonly overspending?  

To fund innovation and digital transformation by curbing IT waste, it’s vital to identify areas of cost savings. Let’s consider three common areas of IT overspending and waste:

1. Cloud overprovisioning  

Cloud technology has played a critical role in workplace agility, and its popularity is only set to continue growing. In fact, Gartner says over half of enterprise IT spending will shift to the Cloud by 2025. Research shows that 65.9% of software spending is expected to be directed toward cloud technologies in 2023, up from 57.7% in 2022. However, as a study highlights, 29% of cloud resources are wasted due to unused and underutilized cloud licenses. To help mitigate overspending on cloud technologies, organizations can benefit from a tool that aids in efficient cloud cost management.

2. Poor software asset management

Overspending on software is commonplace, and poor software asset management could have a very costly impact on your organization—even the most reputable organizations can overspend on software licensing. For example, earlier this year, an audit report showed that NASA overspent $15 million on unused Oracle licenses due to the absence of a centralized software asset management (SAM) practice.

With both the amount of software solutions used by companies and their associated costs continuing to grow, there’s no room for error or mismanagement. Organizations need effective software asset management practices to gain visibility into their entire IT infrastructure. This insight will help them to understand where to allocate budget and resources or the presence of shelfware, and how best to optimize investments.

3. Device lifecycle management

In addition to software tools and licenses, IT teams must also consider their device replacement strategy. Organizations will suffer unnecessary costs from making inefficient device purchases, such as auto-purchasing as warranties expire, despite devices still being in great operational condition. Besides overspending on hardware, other challenges associated with a poor device refresh strategy include negative environmental impact, difficulties with resource allocation and device visibility, and user disruptions from unreliable workstations and unnecessary device replacement. These hurdles give more than enough reasons to consider a modernized approach. 

How to correct course on IT overspending  

IT leaders aspiring to optimize costs and drive digital transformation should focus on the following priorities: 

Proactive device refresh strategy

Move away from age-based device refresh cycles. Instead of extending lease periods, retiring devices too early, or simply stopping refresh programs altogether, embrace data-driven hardware decisions. Organizations can benefit from reduced hardware spend by investing in a solution that provides real-time data and recommendations for devices based on performance, responsiveness, and stability. Furthermore, proactive hardware lifecycle management will assist with right-sizing machines to users while reducing user downtime and environmental impact – win-win!

Efficient software asset management

Efficiency and clarity when it comes to software asset management are crucial. IT leaders can make sure software licenses and applications are fully utilized by investing in a capability that removes the guesswork from managing unused or underutilized software. Data-driven software reclamation can help IT operations uncover discrepancies between allocated software and actual usage and make strategic decisions moving forward. By gaining deeper insights into your existing software inventory, you can make informed decisions to reuse what you already have, reducing unnecessary purchases and maximizing cost efficiency.


The FORRESTER WAVE™: End-User Experience Management, Q3 2022

The FORRESTER WAVE™: End-User Experience Management, Q3 2022