Gartner’s release of the report on “3 Ways to Cut Software Costs,” shows how CIOs and senior IT leaders can significantly reduce software spending. An 800-client inquiry revealed an average 30% reduction in software expenses within 10 months when these practices were implemented. This is crucial today, with global software spending projected to reach $842 billion in 2024. With economic uncertainty prompting tighter IT budgets, cutting software costs and optimizing ROI are essential for staying competitive and relevant.
As a global SAP services company, specializing in providing innovative solutions, Auritas is compelled to provide partners, clients, and associates with information to help them succeed
in this intensely competitive and innovative industry. We have chosen to elaborate on Gartner’s helpful tips to provide additional details on the benefits and encourage you to act upon these budget-saving best practices.
Gartner’s 3 Ways to Cut Software Costs:
Best Practice #1: Optimize Software Configuration
It’s up to IT leaders to seek opportunities for savings in the often complex configuration of software. Here lies an opportunity to increase efficiencies, stability, and control. By having knowledge of the elements of configuration, IT leaders are able to quickly detect and correct performance-reducing configurations, thus improving productivity. Optimizing software configurations also enables faster problem resolution and enhanced security levels. It’s a win-win!
To fully capitalize on these savings opportunities, enterprises can leverage specialized services from IT consultants. This includes services related to data management and process optimization. They optimize data management, ensure efficient resource use, and support strategic decision-making.
Here are some key Auritas services that can help achieve these cost-saving goals:
- Data Archiving (ILM): Reduces storage costs by moving infrequently accessed data to cheaper storage solutions, including hyperscalers.
- Retention Management: Ensures data is kept only as long as necessary, reducing storage and management costs and ensuring compliance.
- Data Volume Assessment (ILM): Helps understand data growth and identify opportunities to optimize storage.
Best Practice #2: Recycle software licenses
As part of software license management, this involves recycling and reharvesting your licenses to achieve maximum savings. Many companies fail to keep track of the licenses they are purchasing and using, resulting in unnecessary software spending. Make sure that you keep track of your company’s software usage and check software license agreements on a quarterly basis. Metering is a useful way to identify unused licenses, cut spending and support maintenance costs, and so is the next best practice.
To achieve significant savings through effective software license management, IT leaders need strategic support. Below are some of the key strategies that can help you achieve these cost-saving objectives:
- Legacy Decommissioning: Eliminates costs associated with maintaining outdated systems, freeing up resources.
- Data Migration: Ensures efficient and cost-effective transfer of data to optimized environments, reducing the need for excess licenses.
By implementing these practices, companies can better manage their software licenses and achieve significant cost savings.
Best Practice #3: Use SAM tools
Software Asset Management (SAM) tools allow you to organize and control software inventory. They frequently include license management and optimization capabilities. With SAM tools in place, companies can reduce the chances of getting slapped with non-compliance fees. Cut back on the complexity involved in optimizing licenses by deploying a SAM tool to simplify the process.
To maximize the benefits of asset management, companies can leverage specialized services that enhance their software asset management capabilities.
“Companies can expect to achieve 30% savings in the first year and between 5-10% annually with an effective Software Asset Management (SAM) program.” – Gartner
By implementing these straightforward practices, companies have successfully managed to reduce software spending substantially. Your path to implementing these practices may require additional resources in the short term, but the long-term savings are apparent.
Hank Marquis, research director at Gartner, summed it up best: “Automated software license optimization is a relatively new discipline, and most organizations are at lower levels of maturity. The variety of license entitlements also makes it tough for IT leaders to spot savings, especially in environments with many software publishers and titles. But it’s worth pursuing, as spending reductions contribute directly to the bottom line as gross profit.”
Explore how CenterPoint Energy was able to achieve an annual average savings of approximately $4 million with volume reduced by 90% with the help of Auritas.