With IT budgets under pressure, it’s more critical than ever to ensure that every penny is spent wisely.
Yet according to Flexera’s 2024 State of ITAM Report, around one third of IT spend on desktop, data centres, SaaS and cloud services is being underutilised or completely wasted. This includes 32% of SaaS spending. Often, the bigger the organisation, the higher the waste.
Jennifer Kuvlesky, director of product marketing at Flexera, says organisations must look seriously at how IT waste is costing them money. “This includes purchasing licences but not using the software or, in a large organisation, more than one business unit duplicating technology,” she says. “You need visibility into how your employees are using different IT assets.”
While organisations recognise over-spend is happening only 56% are tracking use of SaaS applications and just 46% are looking for application rationalisation opportunities.
Yet it is investment in security tools where IT leaders feel they are overspending the most, with 31% putting it at number one. They complain about the rising cost of tools and the difficulty integrating different products.
Kevin Miller, director of product marketing at Flexera, says organisations can reduce waste by having a better understanding of how IT assets are implemented within an organisation.
The hidden cost of poor data
Much of the waste comes from having incomplete or inaccurate IT asset data, which increases costs because productivity is lower. Poor data can also hinder decision making.
“Problems can happen downstream where poor data or other IT issues can cause disruption,” he says. “For example, one business unit might update an application in a certain way which is incompatible with how a service works with applications elsewhere within the organisation. There could be a commercial app which goes down under the same circumstances and affects consumers. This will have an impact on the wider business, such as customer churn because people do not renew with an unreliable vendor.”
Having accurate asset data saves organisations time and money. For instance, it boosts the quality of a Configuration Management Database (CMDB), which improves IT service management (ITSM) workflow because less time is spent researching and validating information. Data discrepancies can be identified and addressed before they disrupt critical ITSM processes, which could otherwise prove costly.
Other benefits include less time and money spent on maintenance and on identifying risks that could cause outages and threaten vital business systems.
Another tip for organisations looking to implement a more robust IT asset data management strategy and reduce waste, is to invest in technology that normalises data. This means standardising raw technology data from various sources across the organisation into a consolidated categorised listing of IT assets.
Data normalisation provides better IT visibility because it ensures that data across the entire IT estate is consistent, which eliminates discrepancies and redundancies. It also helps organisations to make more informed choices related to IT investments, risk management and compliance.
Miller cites the example of a major US university which was suffering from inconsistent, incomplete and inaccurate inventory data because it was relying on manual processes and disparate systems.
Flexera helped to normalise its data inventory across multiple inputs and this reduced IT service management resolution time by 75%. It also cut operational costs because workflows became automated.
Building a smarter IT estate
IT waste can also be reduced if you automate IT asset data feeds. For example in New Zealand, Christchurch City Council updates its IT asset management plan every three years. Data from the plan is included in the council’s financial statements and used to improve council services as well as assess IT efficiency. Before automating IT asset data inventory, the team spent 6 months pulling this data manually, and then it was out of date by the time they completed.
Now, with real-time insights, the council can increase compliance, save money and reduce risks. For instance, its many Microsoft licences now match individual user needs more accurately, saving NZ$250,000 in one time savings. It also discovered 236 cloud-based applications that the IT team didn’t know about, including illicit gaming software that some users had installed.
IT investments must now work harder than ever
“One of the most impactful things an organisation can do is obtain insights into which applications they have and which are coming to the end of their life,” says Miller. “You then need to assess if these have open source components and which business units are using them and what services they are helping to provide. Are they important to logistics, for example? And to what degree are they contributing to a company’s carbon emissions? We know that roughly 25% of an organisation’s emissions come from technology.”
He adds that any strategy to reduce IT waste needs involvement as a company-wide and cross-function initiative because technology is utilised across the business and often in silos. Once a complete view is built, the data should be integrated across the technology ecosystem for various tools to consume.
Kuvlesky wants leaders to drill even deeper into the various inventory sources of different business units to deliver a better understanding of exactly what information they are providing and what data they are generating.
“If you are using cloud infrastructure you need visibility into where cloud licenses are used and how they are purchased and their cost. For SaaS, you need to understand how employees are using free and paid SaaS applications, and their cost and risk profile. For on-premises applications, it’s important to understand where apps are installed, how they are being used and what the licenses cost.”
Understanding usage, cost and risk across cloud, SaaS, and on-premises environments is the first step towards building a consistent, organisation-wide approach to application licence management. “Then you can start understanding where you are over paying, where you have compliance or risk, and redundancies. It doesn’t matter what team governs application licence management, just that someone is doing it to the standards of the organisation,” she says.
“Similar to performance monitoring, there are many silos responsible for monitoring different layers of application performance – the network, database layer, and so on. The important point is that all layers are being monitored to ensure application performance. Likewise, to ensure compliance and reduce software costs, it is important to look across all domains where application licences live.”
She adds that IT leaders are keen to have a better view of their IT estate and improve the data they hold. According to Flexera’s 2025 IT Priorities Report, 91% of IT leaders accept they must invest more in tools and technology to extract value from their data and turn it into actionable intelligence.
“Leaders know there is data in their systems, but to stay ahead of the curve and reduce waste, they need to ensure it is clean so it becomes actionable.”
In a climate where IT investments must work harder than ever, organisations cannot afford to let waste go unchecked. By prioritising data quality, improving asset visibility and embedding a culture of accountability across the business, leaders can free up valuable resources to power innovation, strengthen resilience and drive long-term value.
For more information please visit www.flexera.com
With IT budgets under pressure, it’s more critical than ever to ensure that every penny is spent wisely.
Yet according to Flexera’s 2024 State of ITAM Report, around one third of IT spend on desktop, data centres, SaaS and cloud services is being underutilised or completely wasted. This includes 32% of SaaS spending. Often, the bigger the organisation, the higher the waste.
Jennifer Kuvlesky, director of product marketing at Flexera, says organisations must look seriously at how IT waste is costing them money. “This includes purchasing licences but not using the software or, in a large organisation, more than one business unit duplicating technology,” she says. “You need visibility into how your employees are using different IT assets.”
While organisations recognise over-spend is happening only 56% are tracking use of SaaS applications and just 46% are looking for application rationalisation opportunities.
