Neil Buckley, MD of Apex BI, lifts the lid on the best kept secret of success in business: taking charge of technology expense sprawl *
Adding a multitude of Internet of things (IOT) devices and cloud-based as-a-service charges to already sprawling ICT environments will add further complexity to the management of technology – and its associated expenses.
Technology expense management (TEM) enables enterprises to take charge of the situation.
ICT is the cornerstone of commerce in today’s age of digital transformation and the Internet of everything, with companies and virtually every employee using a range of communications tools, hardware, software and cloud-based services.
Technology is already among the leading five organisational expenses and is fast heading toward the top of the list. Moreover, technology expenditure has moved away from long-term capex projects with massive capital outlay to short-term operational expenses and monthly contracts, switching services ‘on’ and ‘off’ at will which requires a management platform that keeps close tabs on IT expenses.
We’re starting to see massive lines of credit emerging as enterprises and individual business units embrace the convenience offered by everything-as-a-service, with cloud spend set to triple over the next decade, and software-as-a-service (SaaS) and infrastructure-as-a-service (IaaS) among the fastest-growing investment areas.
According to Hyoun Park, CEO and principal analyst at Amalgam Insights, SaaS is expected to grow from a $70 billion market to a $115 billion market by 2025, and the IaaS market will grow from $50 billion to $150 billion in the same period.
As the world prepares to roll out 5G connectivity, this will be just another example of where we can expect to see technology spend increasing exponentially as users and businesses increase their use of cloud-based services. The potential downside of this super-high-speed connectivity is that users could consume massive amounts of costly data in a matter of minutes.
Out-of-control technology expense sprawl costs millions
Managing the fast-growing range of services, vendors, platforms and contracts supporting the digital enterprise has become a complex and time-consuming task for large organisations, in particular.
| Advanced TEM has become the only way for enterprises to effectively monitor and manage expenditure across the entire ICT environment. |
While SMEs may to some degree be able to stay abreast of expenditure, many large organisations are losing control of expenses when confronted with increasing technology sprawl.
Many are still attempting to reconcile and allocate technology expenditure using archaic spreadsheets and a range of disparate management solutions, and are, therefore, putting their businesses at risk by excluding vital information and overlooking unnecessary spending.
Large enterprises across the country are paying for mobile contracts for employees who have long since left the company, running software nobody uses, overlooking vendor service fees that were not agreed to, or neglecting to scale down on dollar-billed cloud services used for a long-since completed campaign.
Many are discovering communications over-spend at the end of the month – far too late to prevent the costs from being incurred – and yet others are finding that their IOT SIMs are proving far more costly to operate than they expected.
In over 10 years in this industry, we have never yet engaged a company that hasn’t discovered, after deploying TEM software, that it had been paying for technology it wasn’t actually using. As incredible as it sounds, these unnecessary expenses can amount to millions per annum.
Amalgam Insights notes that cloud, software and IOT must be managed with the same care and detail that TEM has traditionally supported. “By doing so, IT departments can gain similar up to 30% savings on their operational expenses while gaining the visibility and governance needed to responsibly manage digital change and technology as a competitive advantage.”
Advanced TEM has become the only way for enterprises to effectively monitor and manage expenditure across the entire ICT environment.
Beyond cost savings: gaining visibility and control, commercial compliance and cost allocation
Effective TEM platforms go far beyond helping enterprises to reduce technology costs. Importantly, they also underpin proactive cost avoidance measures, streamline reporting and cost allocation across the entire environment, enhance efficiency and support infrastructure optimisation.
Over the past year, large enterprises in South Africa have moved their focus from simply managing mobile and fixed-line spend, to trying to understand their vendor mix, service mix, technology mix, and how to bill consumption and costs back to individual departments at the end of each month.
TEM helps them track – right down to a granular level and in near real-time – exactly which business units and which users are consuming what technology resources and at what cost.
TEM enables organisations to gain control of complex technology categories, where discounts, credits, service level agreements and hidden optional fees can cloud expense management.
These platforms support analytics, strategic planning and financial forecasting, and enable organisations to benchmark performance versus expenses across all business units. They can also support an inventory component that serves as a single point of reference for all hardware, software and licences, with alerts in place to notify the enterprise of contracts nearing expiry.
This helps inform future procurement, and even supports business continuity by providing the new CIO with an ‘at-a-glance’ overview of the entire technology environment.
Advanced Technology Expense Management takes a formal and modern approach to infrastructure and expense management, introducing a robust open platform that seamlessly integrates multiple systems and sources of data to deliver a single view of the environment.
With this single view, enterprises are empowered to create policies, rules and alerts to manage and control the environment proactively, as well as gain highly accurate and granular BI and reporting capability.
as published on ITWeb on 29th March: link to full article: https://www.itweb.co.za/content/GxwQDq1AYGxqlPVo/DVgZeyvJzRvdjX9a