First, here at SoftwareONE we readily admit that a prediction is simply an educated guess. However, having spent the past eight years of my life living in the software asset management (SAM) ecosystem, and actually helping hundreds of customers execute on their vision, I feel more capable than most to offer a few predictions for the next few years.
By 2022, SoftwareONE expects the failure rate for SAM initiatives to reach 25%, whereby a customer quits their efforts altogether and either focuses elsewhere or abandons the investment because of useless information. Gartner and other IT research supports this statistic and suggest the failure rate could be even higher. Furthermore, we predict that 50% of customers who endeavor a SAM program will fall woefully short of benefit expectations due to failures to drive change, internal bureaucracy, missing skillsets, mismatched tool decisions and unrealistic expectations.
Some good news
One positive shift in software asset management will be that 30% of SAM programs will be considered “strategic”. This means that compliance will take a backseat for many as the focus shifts to improved customer experience, integrated software supply chains, improved security and better business intelligence. This also means that organizations will need better advice regarding digital transformation, including end-to-end blueprints for making the changes real. Results from a recent Gartner survey support the premise as nearly 80% of individuals responsible for SAM report to a C-level role, and 27% of those responsible for SAM are themselves in C-level roles.
Arguably, many have predicted a recession for the U.S. coming within the next two years. This prediction is supported by notable firms like KKR who predict a U.S. recession by 2019 amidst a massive cycle of millennial deleveraging. Investment bank JPMorgan also warns that the next global recession will strike on 2020.
The Recession Probability Model prepared as part of the Guggenheim CIO Outlook suggests the next recession will begin in late 2019 to early 2020. When this economic slowdown occurs, an obvious reduction in IT spending will put the brakes on many technology investments, including those in asset management. However, customers will more aggressively look at cost savings approaches without massive capital investment. The translation here is that executives should push hard now for proper investment so that they are in position to help eliminate waste and unnecessary software expense during the slowdown.
Cloud spend will matter more
The next prediction is for those customers seeking greater visibility in their cloud spend. Of course, the shift to hybrid cloud is real, but most customers will feel disappointed in the progress from most SAM tool vendors who are trying to solve their spend management dilemma. Our recent C-level and IT manager survey, “Managing and Understanding On-Premises and Cloud Spend” found that nearly half (43 percent) of the respondents felt that high costs were the number one concern when using the cloud.
SAM tool vendors have acquired new technologies for SaaS management, but plans for integration are not expected until late 2019 and completeness of vision is suspect. The reality is that even with such tooling, much of the work in managing DropBox, Salesforce and 20-30 others for most organizations will require time and resources. Done properly, cloud spend management also requires asset tagging and other cleansing in order for the data to be meaningful.
Rise of the robots
Lastly, the longer-term future across IT will undoubtedly involve robotic process automation or RPA. In 2016, McKinsey said up to 70% of corporate tasks will be automated using AI or artificial intelligence. Since then, companies around the world have jumped on this bandwagon and are investing heavily in this topic – robotics. During my consulting for one of the world’s largest telecoms, I watched as the CIO embraced RPA and challenged his leaders to automate repetitive process work across all of IT. Susceptible functions for near-term RPA in asset management include invoicing, purchase ordering, catalog management and even entitlement management – an area where SoftwareONE is making investment.
Here’s a handy graphic that summarizes our predictions for the future:
The overarching goal in these predictions is for executives to keep these challenges and potential pitfalls in mind when setting your asset management strategy.
If you disagree with anything here, let me hear about it at firstname.lastname@example.org or leave a comment below.