Is Software Killing Your IT Budget?
September 16, 2015
Cost is key IT budgets so why is it that annual support contracts are left to roll over without question or intervention leading to potential six-figure sums? Learn how Q Associates could help save 10-15% against your software costs!
It’s funny isn’t it? At the beginning of any IT requirement, cost is key. RFP’s are run, prices are squeezed, purchasing people get really serious and the emphasis on getting the largest possible bang for the buck is paramount to the procurement process.
Even ROI is explored to its darkest recesses and the fierceness of the progressive market means that the cost of any product has to stand up to economic scrutiny; when it comes to repeat support contracts for hardware and software however, the same can’t be said, we’ve found that they’re seldom held to the same level of diligence.
More often than not, renewal contracts are simply left to roll over without question or intervention, mainly because support is viewed as an imperative to the business and adherence to compliance is of course, a legal necessity. This often leaves ‘renewals’ immune to question and the net result is most organisations end up paying significantly too much for their support contracts.
The biggest culprit without doubt is Software; largely due to the fact that support contracts are often based on the number of licenses that have been purchased over months and years but seldom examine licenses that are no longer in use or yet to be deployed.
The natural by-product is that software support can amount to a significant cost if left unmeasured. Many organisations spend six-figure sums on licenses that aren’t even being used which is insane given that most IT budgets are already under extreme pressure to cut cost and deliver more.
Knowing what is being used and where is key. For compliance reasons, it is essential that all software in use is correctly licensed and covered by an appropriate support agreement. However, unless the specific number of licenses in use can be accurately measured, finding the delicate balance between over-supporting and under-licensing is an ongoing challenge.
This ambiguity is how many software companies make a lot of money; we all know it and somewhere along the line it seems to have become be an accepted necessary evil of the industry where in reality, it’s easily addressed.
Let’s face it; it makes no sense to pay for something that isn’t being used.
Every week we meet organisations that simply either don’t have the time or the resources to address the ever-expanding software support elephant in the room and it’s entirely understandable, we’re all busy. Wouldn’t it be nice though if that unnecessary overspend could be redirected and aligned to progressive projects instead?
With specialist help, accurately measuring the number of licenses currently in use is relatively straight-forward but doing it as a one-hit-wonder makes little sense. Although you may make an initial saving, the benefits lay within long-term due diligence.
Once there is a handle on what the real usage is, putting a process in place that monitors the ongoing license purchases, deployments and de-commissioned software will ensure that support overspend is yesterdays concern.
By simply understanding what is being used and where, we’ve seen clients realise savings between 10-15% against their software costs in the first year without ever compromising compliancy or software regulations…and we’re just getting warmed up.
To speak with one of our specialists about how you can reduce your software support costs, please click below.