5 Best Practices for IT Asset Management (ITAM) And IT Strategy

In these days of financial uncertainty, the practice of IT asset management (ITAM) can deliver cost savings while facilitating transformation and modernization. In this article Brian Adler, senior director of cloud market strategy, at Flexera sets some benchmarks and best practices that can help eliminate the wasted spending common at most organizations.

How much of your IT spend goes to waste? Chances are, it is quite significant. If so, or you are not sure what the answer is for your organization, you are not alone. 

The critical function of IT asset management (ITAM) has grown increasingly challenging as the hybrid IT estate expands and as financial pressures grow in the face of a potential recession. Cloud, containers, software as a service (SaaS), and software vendor use rights are among the most complex areas that often get in the way of spend optimization.

Wasted IT spending adds up. As estimated by survey respondents and detailed in the Flexera State of ITAM ReportOpens a new window , 33% of SaaS and infrastructure as a service/platform as a service (IaaS/PaaS) spend is wasted, 34% of data center software spend is wasted, and 38% of desktop software spend is wasted. The report draws on feedback from 500 professionals worldwide who participate in or manage ITAM, including software asset management (SAM) and hardware asset management (HAM) processes at organizations with at least 1,000 employees. The findings provide insight into industry trends and best practices that can help other IT organizations strengthen their own ITAM initiatives to find much-needed cost savings.

See More: How IT Asset Management Ensures Security and Visibility Throughout the Asset Lifecycle

ITAM Benchmarks

Multiple ITAM challenges commonly stand in the way of organizations’ efforts to recover wasted spend. Most significant among these are the challenges of dealing with new environments (e.g., cloud, containers, and SaaS), the complex nature of software vendors’ use rights, and the lack of resources on SAM teams.

Challenges with Software Asset Management (SAM)

Source: Flexera State of ITAM ReportOpens a new window

Advanced ITAM programs employ ongoing tracking of the use of software licenses, along with optimization of software licenses, with functions beyond just auditing or tracking SaaS and cloud usage. These advanced programs can lead to increased savings from SAM initiatives. This is a promising indicator for the beginner (focused primarily on audit responses and just developing SAM practices/processes) and intermediate (moving beyond a focus on audits to perform ongoing tracking of software license use) ITAM teams that seek to strengthen their modernization and cost-savings initiatives. Optimistically, as SAM programs mature, they tend to yield increased savings. The areas leading to the most successful savings include “reuse of licenses to avoid buying new ones (non-cloud),” “better negotiation of vendor contracts,” and “reduction of maintenance spend on unused software.” Of note: these initiatives were more successful at delivering actual savings than audit-related initiatives.

Realized Actual Savings from SAM Programs

Source: Flexera State of ITAM ReportOpens a new window

Centralized approaches to managing cloud programs are increasingly part of organizations’ cloud journeys. Today 69% of respondents have either a cloud center of excellence (CCOE) or a cloud-central team to manage the organization’s journey to the cloud. Additionally, 83% of CCOEs have an ITAM/SAM member on the team. As ITAM grows as a strategic function for high-functioning enterprises, today, 43% of ITAM teams report directly to their CIO or CTO. This number has nearly doubled since last year when 22% had this reporting structure. Additionally, SAM teams interact with other teams across the enterprise. Most commonly, respondents report that SAM teams interface with infrastructure & operations teams as well as IT service management (each reported by 58% of respondents) and security (reported by 50%).

Interaction between SAM and Other Teams

Source: Flexera State of ITAM ReportOpens a new window

5 Steps for Savings

IT organizations have multiple opportunities to conserve money while expanding their IT estates. To take your IT asset management and IT strategy initiatives to the next level, consider five best practices:

1. Improve the data in the CMDB. About 78% of respondents use configuration management databases (CMDBs), tracking a broad set of assets: on-premises virtual machines (VMs), public and private cloud instances, public and private cloud storage volumes, and containers. Often, however, these CMDBs lack the visibility they need into their IT assets; nearly 65% of respondents report not having accurate visibility into the IT assets that influence their business outcomes. IT asset tracking procedures are necessary to ensure that CMDBs do not become cluttered with entries that are irrelevant; this is particularly crucial as businesses use more and more assets that are transient (e.g., containers, cloud instances). 
2. Align daily cost activities with ITAM success metrics. Under ongoing pressure to optimize costs, SAM and HAM teams are often measured on audit-related activities. Certainly, audits can be expensive; 15% of respondents indicated that they had paid more than $5 million in the past three years in response to vendor audits. Yet focusing on cost-related activities (such as automation, cost avoidance, and hard savings on software or hardware) instead can help improve the overall success of ITAM goals.
3. Identify IT assets that are underutilized. Desktop software, data center software, SaaS, and IaaS/PaaS may all be going to waste if licenses are being underutilized by your organization. Identify where your investments are not being used as intended, then recover this wasted spend.
4. Govern the use of SaaS and optimize SaaS spending. While there are many initiatives that SAM teams need to address, teams continue to struggle with implementing best practices for SaaS governance and spend optimization. Currently, the largest organizations (with more than 100,000 employees) spend, on average, $64 million annually on SaaS. As reliance on SaaS grows, so does the importance of focusing attention on governing its use to optimize costs. The most commonly-used SaaS management practices include “linking all major SaaS apps to single sign-on (SSO),” “negotiating contract terms with software vendors,” “tracking/managing auto-renewal clauses,” and “tracking usage by SaaS users and rightsizing subscription level.”
5. Include ITAM practitioners in your CCOE. The CCOE plays a significant role in an organization’s journey to the cloud. Ensuring that ITAM is represented as part of the CCOE is an important step to help ensure adherence to best practices.

The pressure for high-performance digital transformation is on the rise, but wasted spend should not be. By prioritizing IT asset management initiatives, enterprises can identify and minimize wasted spend across the IT estate. 

What best practices of ITAM are you following to reduce wasted spending? Share with us on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .

MORE ON ASSET MANAGEMENT:

• Key IT Asset Management (ITAM) Strategies in a Cloud World
• 5 Free Digital Asset Management (DAM) Tools You Can Start Using Today
• What Is Digital Asset Management (DAM)? Definition, Types, Best Practices, and Examples

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