Consolidate Your Software Spend Data For Better IT Budget Planning

spending data for budgeting
Shutterstock Licensed Photo - By kan_chana

Cyber attacks are increasing in frequency and sophistication. Technology is developing at a breakneck pace. The world is becoming ever-more dependent on the assistance of digital tools and apps to complete business tasks. So it’s no surprise that IT budgets are hard to stick to, even as they continue to expand.

For the last four years, a majority of CIOs have reported that their IT budgets rose compared to the year prior.

In a similar vein, 44% of businesses declared that they intend to increase their spending on technology in 2020, in contrast to 38% last year. While the biggest slice of this increased budget is going to replace outdated tech hardware, servers, and other devices, aabout one-third is still being spent on software.

Rising IT budgets make it even more important to manage tech spending carefully. There are a number of benefits associated with thorough and accurate software stack expenditure planning, including good communication between the CEO and CIO about business priorities and streamlined procurement processes.

But this requires dependable data about your software spend, which is hard to come by. Different departments of your company likely have different tech sourcing processes, using any number of different payment methods. What’s more, the ease of software-as-a-service (SaaS) adoption, plus the popularity of web browser-based SaaS interfaces, makes it extremely hard to document.

You also need to know which tools have subscriptions that are renewed automatically and when renewal is due.

Without the right resources to oversee IT operational strategy and deliver IT services, you can’t gain a true understanding of their expenditures. It’s vital to use efficient tools to measure, manage, and communicate the RoI on IT expenditure, so you can optimize budgets and raise transparency and trust towards IT departments and investments.

Increase Visibility into Your IT Budget

When it comes to tightening your IT budget, your fundamental issue is gaining knowledge about how much you are spending. It’s impossible to budget correctly if you don’t know how much is going out, why, and which are your most expensive apps.

You can use spend analysis software like AppZen or Jaggaer to show spending, generate easy-to-understand spend reports, and unify spend data from many sources into a single source of truth. These tools also help you discover the most costly apps, so that you can look for more cost-effective alternatives.

It’s not just about tracking your spend, though – it’s about doing so effectively. Research from Deloitte shows that 67% of organizations track IT spending on a case by case basis, but only 48% of “digital vanguards” do the same. Instead, digital vanguards are more likely to assign business leaders to measure expenditure and to use dashboard or scorecards to communicate benefits and costs.

Balance Agility with Insight

A number of organizations are conflicted between the push to agile business practices and their more traditional, fixed IT budgets. The agile approach allows for more flexibility in responding to new scenarios, allowing employees to add their own tools to the company tech stack as and when they feel the need.

However, successful budgeting demands that IT teams keep control over technology usage. Your perfectly-balanced budget could be derailed when employees start signing up for new tools and apps that you didn’t account for in your plans. 

It’s best to use a powerful SaaS management solution like Torii to discover and assess new tools immediately. This gives IT teams full visibility to spot new licenses, and approve or block them at will.

Business tools are increasingly decentralized, with most having more than one or two main owners, making it hard to gain visibility into your tech stack without a management solution like Torii to shine light.

Track Usage Levels

As markets move faster and become more competitive, it’s to be expected that businesses will demand that IT departments work together with business functions to deliver value as well as providing vital business services.

This requires planning your IT budget more carefully in order to demonstrate RoI and value add.

The only way to achieve this is to know the real usage patterns of your employees, so it can be helpful to turn to single sign-on tools like Okta, which reveal who’s logging in to each app and how they are using it. You’ll want to keep on supporting an app used by multiple departments, several times a day, for example, but one that’s only used by Jim in accounting could be an unnecessary drain on your budget.

It’s also useful to look for overlapping tools, where you are paying twice for essentially the same thing.

However, SSO tools only track apps that your IT team already knows about. It’s possible that the app that looked great on paper is unworkable and impractical in real life, so your employees switched to another app that better fits their needs. If all you have is Okta, you’ll only know that employees aren’t using the tool you provided. Fortunately, Okta integrates with SaaS management platforms like Torii to show which app they’re choosing to use instead, so that you can track usage of all apps across the entire business.

In addition, half the company could have been granted access to app X, but because each one signed up individually, you’re missing out on a group discount. Torii points these instances out too, bringing more value to your business when used in connection with your SSO tools.

Better Software Spend Data Improves Your IT Budgeting

Getting better data about your SaaS spend helps you make better decisions about your IT budget and ultimately increases trust between the IT department and your CEO and other decision-makers.

When you know how your business tools are used, can keep track of your spending, and find the right balance between supporting agility and maintaining control or technology, you can feel confident that you’re spending the right money in the right places to add value to the business as a whole.

Smith Willas is a freelance writer, blogger, and digital media journalist. He has a management degree in Supply Chain & Operations Management and Marketing and boasts a wide-ranging background in digital media. He’s thrived within the digital advertising and marketing industries for the past several years, working for such companies as Time Inc., NBCUniversal, and Ogilvy & Mather.