Top 5 Unexpected Software Costs

Software Costs

When it comes to something as expensive and complex as managing an enterprise’s IT estate, having a handle on costs is critical. As the economy continues to struggle, business expenditure and IT budgets remain under close scrutiny. As a result, CIOs and IT leaders are under pressure to justify their spending at board level and to uncover savings within the IT infrastructure.

With software accounting for around 30 per cent of the typical enterprise IT budget, it is essential that businesses maximise the value of the software investments they have made; and similarly ensure the total costs are minimised. One effective way of doing this is by making sure that any unexpected software costs are being avoided. Here are five of the most common unexpected costs that can creep up on IT leaders and some tips on how to avoid them:

1. SaaS and cloud procurement

While SaaS licensing has lowered up-front costs and made life easier for procurement in lots of ways; it can also complicate the situation greatly. Businesses often do not realise that non permissioned cloud downloads made by employees are adding to their software bill.

2. BYOD and the consumerisation of IT

Again, BYOD can offer huge business benefits, but can also be a major factor in unexpected software costs. Employees could be using the business network to download software programs and applications to their personal devices for business use, and charging this back to the company through expenses. A clear and comprehensive BYOD strategy with guidance on employee purchases will minimise the impact of off-budget costs in this area.

3. The cost of over-licensing

This is becoming a common problem for businesses as they fail to keep on top of their software assets and commonly occurs following virtualization projects; which can reduce software assets but leave overarching license agreements in place. This can be avoided by assessing software needs before, during and after any infrastructure changes; and identifying those licenses which are no longer needed, or of larger capacity than required.

4. Lifecycle management

This is important for businesses to understand in terms of their software cycle management. For instance, you may have bought software for a project which you completed years ago, but may well still be paying for the software through automatic know what software is really essential in your business and what is no longer in use by regularly auditing your own software estate.

5. Noncompliance fines

The fifth and final point is the most obvious and it almost goes without saying; but fines from non-compliance still represent a huge portion of unexpected software costs for businesses. Software licensing is complex and can be difficult to manage, but there are solutions. Business Intelligence and dashboards can play a huge part in understanding your software estate and enable businesses to make informed decisions by giving them clear picture of your compliance position and highlighting potential areas of compliance risk and exposure.

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Martin Prendergast

Martin Prendergast is CEO of Concorde and a board member of the Cloud Industry Forum. Martin has over 10 years’ experience in the software IT industry, and has held senior management roles at Unitrans and Morse, and a number of operational roles at Peregrine Systems. Martin has worked with a large number of companies around the world and has helped architect, sell and deliver solutions for market leaders such as HP, CSC, EDS & Computacenter.