Cyndi Tackett, Vice President of Product Marketing at Flexera, highlights steps to take as you plan your IT budget for 2022.
CIOs and CISOs know all too well the pressures placed on IT infrastructures in the wake of the past 18 months – perhaps the most challenging and faced-paced ever. In response to the pandemic, the ability to adapt to change was front and center.
With that responsiveness came rapidly growing IT estates, as organizations added the functionality necessary to meet users’ evolving demands. But these leaders also know that rapid expansion can’t go unchecked without ramifications for budgets and for security initiatives.
Looking toward a new year and new opportunities, now is a fitting time to evaluate how to budget for IT in 2022 in a way that creates efficiencies in the IT estate while simultaneously supporting strategic initiatives and innovation.
Identify precisely what’s in your IT estate
Today’s hybrid IT estates-including on-premises, cloud and Software-As-a-Service (SaaS) assets-bring complexities to IT lifecycle management. Without comprehensive visibility into the individual assets that comprise your infrastructure, your organization faces unnecessary hurdles, including increased vulnerabilities and wasted spend.
Unfortunately, today the majority of organizations lack this clarity: less than a quarter of respondents in the Flexera 2021 State of IT Visibility Report indicated that they have complete visibility into their IT estates.
You’re certainly not alone if you’re part of the majority who are missing a clear picture of assets. If that’s the case, focusing on this is an essential first step for reducing risks and securing the correct IT asset data that can help drive technology value optimization (TVO). Doing so can eliminate waste, allowing you to reassign budget to your organization’s strategic initiatives.
Optimize your software licensing expenses
Software licensing can be mystifying. There’s no straightforward equation for determining the cost per unit for the software you use. Software publishers (including IBM, Microsoft, Oracle and SAP) bill customers based on multiple metrics, such as availability, cluster, cores and environments. Not only does this complicate customers’ ability to track usage, but it puts you at a disadvantage at audit time and when it’s time to negotiate price.
A comprehensive software asset management (SAM) program goes beyond cost reduction to help optimize your software licensing expenses. Automated calculation of consumption costs and license optimization, for example, are far more effective than guesswork.
Control SaaS costs within your organization
How many SaaS applications has your organization subscribed to? Hundreds? Thousands? Widespread adoption of SaaS is likely changing the makeup of your software portfolio, perhaps without much oversight. If those subscriptions are spread across cost centers and employees, you’re missing opportunities to control your costs and to protect the organization from vulnerabilities.
Gartner predicts that worldwide public cloud services end-user spending on SaaS is set to jump from US$102,798 million in 2020 to US$145,377 million in 2022. As SaaS grows in popularity and prevalence, so does the imperative to govern associated cost. This may require centralizing SaaS spend management (rather than allowing business units to oversee it) and optimizing all modules you have with each vendor (e.g with Salesforce, Salesforce Marketing Cloud and Salesforce App exchange).
Remove guesswork from your cloud migration
Your business units are likely eager to take advantage of the multiple, robust cloud services available to them. But as you migrate interdependent workloads to the cloud – public, private or hybrid – keep tabs on costs, along with workload placement and prioritization.
Applications can struggle or fail in a new cloud environment. This happens when how the application and its complex interdependencies fit in a cloud aren’t understood well. It can also happen when relationships with other applications in your portfolio aren’t tracked and accommodated.
By having a well-defined strategy for migrating data and workloads to the clouds, supported by accurate dependency mapping, you can ensure that your migration is efficient and that you understand costs before embarking on the effort. This helps not only the initial move, but on-going cloud plans.
Optimize your cloud costs
Significant expenses come with cloud migration and use. That’s why a focused effort on cloud cost optimization is vital.
To optimize your cloud costs, track cloud spend across all resource types and across all cloud providers. This will help you negotiate provider discounts (such as reserved instances, spot instances and savings plans) and allocate discounts appropriately to the accounts that use them.
When they’re tracked accurately, you’ll have the ability to subdivide your cloud bill(s) across multiple dimensions, including provider account, cost center, application or individual user.
Maximize your ITSM and ITFM investments
When you invest in IT service management (ITSM) and IT financial management (ITFM) solutions, it’s with the goal of streamlining the effectiveness of your organization. On their own, though, these tools don’t provide comprehensive visibility into your IT services or finances, respectively.
These solutions can inform you of overall spend and annual spend per vendor, for example, but can’t deliver important information needed to protect and support your business such as: the number of available licenses; your compliance stance after an IT request is fulfilled; how you may be able to reallocate or rationalize (and save money on) licenses; whether your applications are at the end of life (EOL) or end of support (EOS) – and the implications, including security vulnerabilities. These functionalities can all be improved by feeding current, enriched IT asset data into your ITSM and ITFM solutions.
Be aware of the opportunity costs of stagnation
Perhaps above all, precision planning can help prevent your IT infrastructure – and associated costs – from spiraling out of control. An enterprise-wide initiative requires a modest amount of effort, but can pay dividends by eliminating the waste that eats into profitability and into your ability to innovate.
On the flip side, doing nothing can be expensive and complicated. As SaaS adoption and cloud costs grow, as visibility into your IT estate gets murkier, and if Digital Transformation stalls, the costs of stagnation can exacerbate the underlying issues throughout not only your IT estate, but across the entire enterprise.