Software procurement and lifecycle management doesn’t come without challenges. In our work with customers, we’ve identified three main issues when it comes to these topics.
The first is an evergreen problem: software keeps getting more expensive and complex to manage and staying in control of those costs keeps getting harder. Organizations now have more software and cloud providers than they have ever had before, each with its own business model whether that is on-premises, pay-per-use or cloud-based; each with their own licensing and contract terms, pricing and negotiation nuances.
While many organizations focus on their strategic vendors, the rapidly growing long tail of smaller suppliers represents a huge challenge for the business to manage. It is difficult to get an accurate picture of such a complex, and changing, software landscape. Each asset provided by the myriad of software and cloud vendors needs to be managed in terms of request, purchase, allocation and renewal and retirement.
The second issue is transparency. While 80% of software expenditure is spent on strategic vendors like Microsoft, SAP, Oracle, Salesforce, and they are easier to manage because there are systems, and account managers, in place. It is the management of the many smaller vendors in a typical software estate that is now a real challenge. They may represent relatively small amounts of expenditure when viewed individually, but the processes are the same and the risks posed can be significantly higher if you do not know what software is in use.
The third issue is more of a problem for bigger organizations. When companies merge, acquire new business or divest parts of the business then suddenly the IT asset management and procurement teams are faced with new challenges and complexity.