6 Steps to Reduce Your Software Spending

In the initial response to COVID-19 most organizations focused on enabling and stabilizing remote access, collaboration, security and network capabilities. As new financial pressures present themselves, leaders in every vertical are now looking for immediate steps they can take to reduce spending.

The Spiceworks State of IT Report 2020 finds that software and cloud-based services represent 51% of IT budgets, making these some of the most impactful areas to look for cost savings.[1]

But a confluence of competing IT priorities, growing complexity around vendor licensing vehicles and limited access to relevant data stalls progress. All this makes it much harder for technology leaders to move ahead with efforts to reduce cost.

To make a strong short-term budget impact, organizations need to seek out redundant and unnecessary software spend and convert those opportunities into savings through the following steps:

  • Discover: take an inventory of all the traditional and cloud software in your environment and measure its actual utilization against licensed consumption.
  • Categorize: sort your software by function, identify redundant spending and prioritize the areas for greatest potential cost savings.
  • Select: develop selection criteria based on your specific needs and select applications you can eliminate and keep based on an informed evaluation.
  • Restructure: find the most cost-effective licensing options for the applications and services that remain and restructure licensing agreements.
  • Maintain: take a proactive approach to reviewing and re-evaluating your overall software licensing strategy on an ongoing basis.
  • Monitor: as an additional step, always be aware of quick win opportunities to reduce costs and take full advantage licensing options and entitlements.

Below, we go deeper into the ways you can find short- and long-term savings on your software and cloud application spending.

Discover and evaluate current software and cloud usage

Determining whether cost matches utilization is a critical first step to optimizing your licensing spend. But having little or no visibility into software or cloud services usage and associated costs makes it difficult to move ahead on efficiency.

Where data does exist, it’s often diluted with false positives, duplicates or questionable installs. In many cases cleansing that raw data into actionable information takes specialized expertise in asset management engineering – a competency not all organizations will have on staff.

Under a cost management mandate, it may be important to isolate unnecessary seats or products, but without clear and accessible usage and cost data, these decisions are made on a best guess basis.

Enterprise-grade discovery tools can help you capture all the software installed in your environment and measure it against usage. Many of these can be accessed at no cost, allowing you to get started on license optimization without using internal resources or budgets.

Categorize the software in your environment by function

With accurate data available, the next step is to categorize your software by function and determine which products aren’t being used or that duplicate functionality.

For instance, organizations may have technologies installed for desktop anti-virus, cloud file sharing or collaboration tools. Many have several examples of each. In some cases, this is intentional, in others it’s not.

In recent years, more line-of-business (LOB) departments have gained some control over the software they purchase and use. Shadow IT has emerged when non-IT departments or individuals have sourced and purchased their own alternatives to approved applications.

By grouping installed software into specific functions, you can very quickly identify areas of redundant spending. Then, you are in a much better position to estimate the cost of unnecessary applications.

Select the applications that are essential to your business

The next step is to build out appropriate selection criteria for your specific needs and decide which software is core to your operations and which is not. Here, it is important to take a logical approach to paring down your software to those products absolutely necessary to the business.

Next, evaluate the cost/benefit of the available licensing options for core services you have identified and execute. In this case, a software vendor licensing specialist may be equipped to help.

It’s also important to ensure the people in your organization use the tools you already have by designing and implementing an appropriate adoption program.

Restructure licenses and contracts to reduce cost and risk

Determining whether you are over- or under-licensed today isn’t enough. Among the software you still need to run the business, there will be many licensing options and vehicles available to help drive further savings.

For example, even after the decision to standardize on one collaboration tool like Microsoft Teams or Cisco WebEx, there may be hundreds of ways to acquire it. To get the most savings, you will need to identify and adopt the ones right for your specific technology and budget needs.

Restructuring contracts to ensure your licensing across all relevant vendors and products can scale up or down as necessary is critical to driving efficiency while you work toward recovery.

There is no one-size-fits-all solution for enterprise software licensing. Where subscription models might work for some, others are better served by a perpetual agreement. For example, some organizations can offset costs by shifting to a subscription or operating expenditure (OPEX) for some software or cloud services. But for those organizations with cash flow or debt covenant issues or those required to assign technology spending to capital budgets, this isn’t an option.

Maintain cost efficiency long-term with a proactive approach

Streamlining your software licensing is not a “one and done” proposition – you may need an ongoing approach to manage licenses over their lifecycle from deployment to End of Support/End of Life.

Meanwhile, as vendors increase the pace of innovation, unexpected product and program changes could disrupt technology planning and introduce unanticipated costs. Without specialized knowledge of licensing programs and vehicles, you may be exposed to compliance risks or even audit failure. Building an effective strategy for negotiating license agreements and renewals is a complex but necessary step.

Keeping your right-sized licensing strategy current and optimized to take advantage of new opportunities to avoid costs takes a programmatic, data-driven approach. A structured program for enterprise lifecycle management that includes programmatic support and expert guidance in licensing across the major software vendors will help you translate short-term wins into long-term efficiency.

Monitor for short-term opportunities to reduce costs

In response to COVID-19, you may have introduced new software to enable remote work, such as modern collaboration, virtual desktop infrastructure (VDI) and security products. At the same time, you may have adopted or shifted some infrastructure or application workloads into the public cloud.

Without knowing the licensing options available, you may end up spending more than necessary. Many organizations fail to take full advantage of licensing benefits and free services vouchers they are already entitled to or didn’t know were available.

It’s important to stay ahead of new options or creative alternatives to adjust your licensing models or access financing options could net savings in the short term. A structured enterprise lifecycle management program will help you identify these opportunities as your business needs evolve.

Next Steps to Reducing Your Software Spending

Reducing your software and cloud services costs for the long term may require the help of an experienced and specialized solutions provider like Softchoice.

Making changes or adjustments to contracts and licensing without the right knowledge or insight into vendor-specific licensing programs and vehicles could create compliance issues and audit risks.

Our team of licensing and technology vendor experts are ready to help you find efficiencies wherever you are in your journey from response to recovery.

Looking for more insight on reducing your software spending?

Watch our virtual workshop, “Creating Efficiency through Software Rationalization and Contract Restructuring” on-demand.

 

[1] State of IT Report 2020, Spiceworks, 2020.

What You Do Now Defines Your Recovery

Events of the past few months have forced organizations to make technology changes and investments that they weren’t expecting or that were planned for further in the future. In short order, new priorities supplanted existing plans, with long-term transformation projects paused in favor of immediate actions to adjust to new operating environments and  ensure business continuity.

The reality for your workforce, customers and partners has already undergone lasting change. There is likely more change to come. How you respond now will define your recovery from the crisis. But the question isn’t “What will our organization look like after the recovery?” but rather “What do we want it to look like?”

With the right approach and the right guidance, what you do now will not only help you recover but also compete and thrive post-recovery.

It’s important that business and IT leaders keep this in mind and continue to build momentum as they work through the phases of response and recovery:

  1. Enabling remote work capabilities
  2. Ensuring security and performance for core IT services
  3. Reducing costs and increasing ROI on existing assets
  4. Translating change into competitive advantage

Below, we explore the ways technology leaders can leverage this moment of change to drive innovation and establish a model for revenue growth once on the path to recovery.

 

Adapting to Change and Stabilizing a New Environment

When the implications of COVID-19 became apparent, organizations were singularly focused on adapting to fast-changing conditions and short-term needs as business continuity plans were defined and activated. Even for those who were somewhat prepared, the shift to all-remote work was jarring, as IT departments had to deploy or update the applications and the infrastructure they ran on. For those less prepared, it placed crisis on-top of crisis.

There just wasn’t enough time to lay the groundwork for a fully-fledged, secure and connected remote work strategy. Users may have been asked to adopt an unfamiliar working scenario or tools they weren’t used to overnight. After the initial deployment, challenges around use and support arose.

Next came the need to support a stable, workable employee experience in the new all-remote environment. This produced its own challenges as networks came under unusual stress, people learned how to work in the new reality and cyber criminals wasted no time exploiting the confusion.

The silver lining: The journey from business-as-usual to all-remote work at the outset has already started either to rapidly define or push forward a digital workplace strategy.

If you weren’t transforming through technology six weeks ago, you likely are now.

The roll out of modern collaboration, remote access and the accompanying security and network changes has equipped your organization to be more flexible, more secure and less tied to the core office environment and the proverbial walled garden.

The pandemic has also prompted many businesses to ask the question, “is it what we’re selling or how we’re selling?” For example, take a brick-and-mortar butcher that has embraced digital ordering and curbside pickup to accommodate physical distancing requirements. Already, the owner reports higher satisfaction from customers as they pick up purchases rather than wait in long lines the way they had pre-crisis. Meanwhile, selling through digital pre-order means the owners keep less inventory on-hand and dramatically reduced waste.

In short, transforming through technology, albeit quickly and out of necessity, has improved the customer experience while making the business more efficient.

If you’ve been through this kind of change, you already have more flexibility around the digital workplace, where and how you recruit talent and deliver products and services to your customers.

Security and Stability to Reduced Cost and Risk

The economic impact of the pandemic is ongoing and cost management has become urgent for organizations in every vertical. IT departments have or are about to enter an “efficiency phase” aimed at reducing costs and increasing return on existing investments.

Many organizations are now embarking on the process of rationalizing software, infrastructure (and in some unfortunate cases, personnel). At this stage, it’s important to stay focused on gains in stability as you look for ways to reduce short-term cost and risk.

It’s also important to keep in mind that recovery will begin eventually. Steps taken toward cost efficiency now should aim at streamlining for faster growth and innovation in that recovery stage. Simply put, you can come out of this an “optimized” organization.

Meanwhile, IT departments may have to find ways to support this new environment with fewer resources than they had before. The need to establish a zero-trust security posture hasn’t gone away, but options for doing so may be more limited. Every organization has its own financial needs and pressures that impact technology spending and many will be looking at new models of subscription, financing and leasing.

The streamlining of IT operations and infrastructure, while difficult today, will set up efficiencies that support a strong recovery.

There is no financial solution that fits every situation. For example, while shifting to subscription or OPEX (operational expenditure) models may work for some, this doesn’t suit organizations with cash flow or debt covenant issues. Considering the right financial options to meet your specific budget and technology needs will be paramount.

Nonetheless, rightsizing the data center or a broader use of public cloud to optimize efficiency, rationalizing licenses and augmenting your own resources with cost-efficient solutions will set you up for agility later. As another upside, many CIOs and IT leaders have received long overdue support for business continuity planning (BCP), modern collaboration and other transformation initiatives.

Driving Efficiency to Thriving in Recovery  

The journey out of finding efficiencies and into recovery will build on the lessons learned in enabling remote work and streamlining costs. In this phase, the steps you took to ensure you got to recovery, done the right way, will help you gain a competitive advantage and thrive once there. In some cases, the crisis has put transformative projects into higher gear, by highlighting the urgent need for modern, agile IT tools and infrastructure.

The PwC COVID-19 CFO Pulse Survey in April found that half of those surveyed intend to make remote work a permanent option for roles that allow. Meanwhile, 40% said that COVID-19 has prompted them to explore the use of technology to enable automation and new ways of working.

This includes redefining the way you work and collaborate through IT automation, analytics and governance. It also includes innovating new ways to connect with and support customers for continued revenue growth. Sticking to this goal as you drive your decision-making in response to the pandemic will help ensure you thrive. To this end, organizations should re-evaluate their digital transformation agenda with the following changes in mind.

Most if not all the workforce is working remotely today – to what extent will this become permanent? What lessons about remote work can you apply on a lasting basis?

When the time comes, returning to work safely will require a holistic strategy that pulls together technology, facilities and human resources groups as well as senior leaders.

Your approach to engaging with employees and customers may have changed out of necessity. But that process of innovation should continue to have a positive impact during recovery and beyond.

How Softchoice Will Continue to Help

The response to the global pandemic has not been easy on any organization, but the hard work they are doing today has the potential to help them come back stronger and more competitive than before.

From adapting to change and ensuring business continuity to driving efficiency and setting the stage for future growth, Softchoice can help you make the right choices to build and sustain momentum out of the crisis and into recovery.

Are you ready to re-imagine your digital transformation journey?

Explore Rapid Response services.

How to determine which VMware licensing option is best

How to determine which VMware licensing option is best

Despite the fact VMware has only three core licensing programs – a far cry from other technologies such as Microsoft and Adobe ­– it’s still challenging to know exactly which licensing program is the right choice for your organization.

Let’s take a deep look at the three VMware licensing programs available, and help you decide which is best for your organization. [Read more…]