Controlling IT Costs: What is Your Software Product Strategy?

By Eric Martorano | Leadership Insight
Tuesday, March 19, 2019

Have you noticed how hard it’s getting to gain and maintain control of your IT spending lately?

It used to be easier. All your IT spending was basically controlled by your IT department and you could simply hold them responsible. An annual audit increased the likelihood that your degree of control over their budget was more than adequate.

But then, without anyone really noticing, some expenses for IT-related items like software started to issue from various lines-of-business (LoB) and departments. Many slipped by looking like miscellaneous expenses or industry subscriptions. Some of your managers had decided not to wait for your IT department to get to their latest request. They simply ordered some software, or cloud services, and did it themselves

At first, we called it “rogue IT”. Then we called it “shadow IT”. Now it’s just reality.

All Over the Map

You soon find that the problem goes beyond cost control. One department decided to use Amazon Web Services for their private project. One of your line-of-business managers preferred Microsoft Azure and subscribed there instead. Before too long you find way more than just your head in “the clouds”.

Where once the problem was individual silos of data that couldn’t be shared, now you have complete islands of compute and storage operations. Different software being used by different departments to accomplish the same things. Not only are software costs quietly going through your roof, the training and support required for all them are costing you over and over.

No Economies

Even when your departments agree, they’re hurting you.

One LoB decided that they “needed” Microsoft Office 365 so they purchased 25 subscriptions for their staff. Down the hall, another department also decided that Office 365 was just right for their needs, and they bought 50 seats. Don’t look now, but Office 365 is very popular at your company and many departments each bought small quantities.

Of course, if you aggregated all the departments inside your company and made one consolidated purchase you would have saved thousands.

Even worse, some of them overestimated their needs and bought more seats than they required, but they’re just way too busy to bother adjusting their order. You’re growing a literal pool of unused subscribed seats and you may not even know it.

The Darker Reality

Oh, by the way, one of your employees just left the company and took their Office 365 account with them. They still have full access to your SharePoint environment and all your documents, and can quietly sit in on your company meetings on Skype for Business or Teams. There’s nobody managing any kind of offboarding process because, well, because it wasn’t managed by the IT department at any time.

Your Software Estate

Think of all the software your company owns, and all of the cloud service subscriptions you have entered into, as your Software Estate. No matter who bought it, you own it. You want to make sure it’s properly managed and secured.

As we said before, departments and LoBs taking IT into their own hands is a reality. It’s your reality. You need to find a way to get your entire software estate back under control and keep it there.

Your Software Product Strategy

Whether you’re running software on premises, or obtaining it as a cloud-delivered service, you need a strategy that will allow for the reality of runaway departmental IT and keep it from continuing to run away. The first step in accomplishing this is to establish a monitoring methodology that will give you full visibility of every software product running across your network.

That methodology must combine a software solution that monitors the network with software product experts who can constantly assess your software estate and recommend ways in which you can take fuller advantage of economies of scale from making larger volume purchases and other publisher programs that benefit you if you take advantage of them.

Preferably, this solution will be connected to the software publishers and cloud providers whose software products you use most. This will accelerate your access to the current state of your purchases and the programs available to help you control and reduce your overall costs. Between monitoring your network and your provider you should be able to capture every product, whether the version in use is current, fully updated and patched, and still eligible for vendor support.

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Eric Martorano
Chief Executive Officer

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