IT procurement news digest

How IT leaders are responding to app bloat

The number of applications being deployed across the enterprise is growing at an unprecedented rate, according to a recent CIO UK readership survey. The proliferation of applications is a double-edged sword for most organisations and it is typically CIOs who are on the sharp end of the application bloat.

As the number of applications deployed spirals there is the risk of management overheads increasing dramatically, forcing CIOs to spend significant amounts of time and resources addressing issues including roll-out and versioning. Organisations need to ensure that licensing is up to date, and allocate or reallocate system resources to maintain acceptable software performance.

And the support costs associated with application bloat do not end there, as complex application portfolios will almost invariably add to the burden on help desks and increase security risks. Complex portfolios can also have a significantly negative impact on the efficiency of business intelligence programmes because of their tendency to fragment data sources across the enterprise, making the implementation of business intelligence more complex and costly.

Lagging behind
A CIO survey of 241 senior IT managers and CIOs found that most organisations still have “some way to go” when it comes to addressing application portfolios. The poll revealed that only 35% of respondents felt their applications portfolio aligned with their business strategy, while half said that there was “moderate” or “too much” duplication in their application portfolios. The report went on to warn that 62% of respondents said that they could not state the real cost of running their applications portfolio with any certainty.

Read the full article here.

SMEs turn away from channel for ICT procurement

Although over 40% of SMEs use VARs as their main channel for procuring hardware and software, a clear majority use the internet as a primary or secondary means of ad hoc procurement, effectively locking the channel out of millions of pounds worth of sales.

This was one of the findings of a survey commissioned by financial services provider BNP Paribas Leasing and conducted by industry analysts at Quocirca, which set out to demonstrate the potential opportunities around financing arrangements.

Having quizzed 102 IT procurement managers at UK businesses with turnover of £5m to £50m, BNP Paribas suggested that ad hoc purchasing could actually increase ICT costs in the long term, and claimed that financing arrangements could help end users make more cost effective, and strategic, investments.

The survey uncovered a distinct lack of understanding among customers of the benefits of ICT financing. Even though over three quarters were using car financing, just 30% were financing IT and telephony equipment, and just 1% were using it for software.

Added to that, 50% appeared to be unaware of the benefits of  IT finance in comparison to straight up cash purchases, or bank credit lines, while 40% believed financing was unnecessary as they already had all the cash they need.

Read the full article here.

Businesses blow budgets on unused software

Businesses are wasting more than 10% of their software budgets on products that are never used.

An IDC study, commissioned by licence management firm Flexera, shows that over half of enterprises say 11% or more of their application spend is associated with applications that are underused (shelfware).

According to the survey, 30% of respondents familiar with their companies’ software usage rights do not optimise their software estates by reconciling software usage data with product use rights.

Only 17% practice software license optimisation across the entire software estate.
Steve Schmidt, vice-president of corporate development at Flexera Software, said: “People are investing heavily in efficiency-creating technologies like software without really understanding how to ensure that this critical asset is being optimally used.  Consequently, an unacceptable proportion of that expenditure is wasted.”

If companies refuse to continue paying for shelfware, they may find the supplier will run a full software audit. According to Sean Robinson, managing director of License Dashboard, the software licence management company, these audits can be very disruptive.

Read the full article here.