5 common black holes swallowing up the IT budget


In recent years, IT departments have been stuck between a rock and a hard place. On the one hand, they’ve had to keep a close eye on their spending in the face of continually flat budgets. On the other, rapid advancements in enterprise technology and rising customer expectations are forcing them to refresh the hardware and software that supports their service offerings more regularly. 

It’s easy to see why striking the balance between remaining innovative and managing the budget is a real challenge. However, many IT departments are inadvertently exacerbating the problem by having ineffective IT asset management (ITAM) policies, which can create a number of unforeseen budgetary black holes that eat away at resources. Martin Callinan, country manager at Express Metrix, lists five common situations businesses may encounter.

1. Buying in vain creates a drain

Businesses often find that software, hardware and services they have purchased are not driving business value. These perceived  ‘vanity purchases,’ as they have become known, are in many cases simply not being used to their potential —or worse yet, sit on the shelf unused. The conclusion that may be drawn is that the purchase was unnecessary and is therefore wasted spend; but it may be that employees simply do not possess the skills or training needed to use the technology effectively. When making investments in new software, organisations should ensure that usage is being tracked to reveal whether licences are being optimally utilised. If the software is underutilised, a little training can go a long way toward achieving the value and/or efficiency gains the technology was intended to produce.

2. Crawling through virtual sprawl

Virtual sprawl has become a significant drain on resources due to a lack of management processes that structure the use of virtualisation technology. Many businesses continue to spin up new virtual machines, when they already have a huge number sitting idle. IT departments need to track and monitor the usage of every single virtual machine in their estate, enabling them to identify any that should be decommissioned and optimise their investment and efficiency.

>See also: Over half of UK businesses to ‘significantly increase’ IT budgets in 2014

3. Mobilised desk-surfing licence hoggers

Mobile working and hot-desking offer numerous benefits to organisations, but can create a further drain on budgets if they are not effectively planned and managed. If employees forget to close an application on one device and then open it elsewhere, they’re potentially taking up two of the organisation’s licences. Not only can this lead to more calls to the helpdesk, but it can also lead to overinvesting in licences to prevent non-compliance.  As such, organisations are well-advised to define which applications users have access to by job role, and implement better controls over idle applications; by doing so, organisations can mitigate compliance risk and avoid unnecessary licensing spend.

4. Audit panic buying

In comparison to physical assets, software is generally more difficult to track and manage. As such, many organisations do not have full visibility of these assets, which can have a myriad of implications, including the risk of non-compliance. As a result, some organisations end up "panic buying" licences when faced with an audit, either because they take the vendor’s word that they do not have enough licences in place, or as part of a ‘better safe than sorry’ mind-set. Rather than unnecessarily throwing budget at an audit, organisations should make every attempt to understand exactly what software has been installed and how it is used and licensed across the enterprise; by having a clear picture of usage companies may be able to identify unused licences which can re-harvested to make up for any presumed shortfall, allowing the organisation to approach the audit armed with information and confidence. 

5. Lost and forgotten IT

It is common for organisations to reimage previous employee device hard drives, wiping clean all data and software in preparation for the next employee, without knowing what had been installed on it in the first place. As a result, the organisation may find itself buying licences for software they already have, or for software that is no longer being used.  Keeping track of the whereabouts and status of all company-issued devices and knowing what software assets are being used by any given employee on any given device will help avoid unnecessary spending and smooth the transition of assets from one employee to the next.  

These are just five of many examples of problems we regularly see that could be resolved if the business had better visibility into its IT estate and control over its assets. If IT departments can successfully close these ‘black holes’ that are eating away at their budget through implementation of ITAM tools and best practices, they can secure a critical role in driving value for the business and its end-users.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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