2020/2021 Trends

The coronavirus pandemic and the mass move to remote working have brought forward a whole host of business challenges. From ensuring operations run smoothly by providing employees with the right equipment and software, to maintaining online security with everyone out of the office, organizations across the board have had to be innovative and quickly implement solutions that will ensure ‘business as usual’ (BAU), even in unusual times.

When it comes to ITAM, we have seen certain trends emerge over the past year under these circumstances, trends that we might not have expected to see for some years yet, but that have now come out in full force. This blog will look at these trends while also considering how ITAM professionals need to respond in the year to come.

The expansion and challenges of cloud and SaaS

Unsurprisingly, cloud and Software-as-a-Service (SaaS) solutions have seen a massive uptick over the past year in order to accommodate changing business operations and requirements.

Vendors of all sizes are shifting their contract models to subscription-based versions. Along with offering a range of new SaaS solutions, traditional product sets, such as Enterprise Agreements, are also moving to SaaS-based engagements. This is both in response to rising demand for more innovative and flexible IT solutions, and because vendors recognize this approach will help them protect their revenue streams in what are tough market conditions.

While this SaaS boom has enabled business operations to continue, it has also meant organizations are signing up to products and solutions that they do not even need. Vendors are sometimes forcing the hand of Procurement and IT to agree to new cloud contracts – but organizations could find themselves in deep water this way, with long-term lock-ins and ongoing costs that are difficult to escape. You can see more on this topic in our Cloud Investment Management guide.

Another SaaS challenges to consider is hidden compliance risks. Cloud and SaaS licenses are still relatively misunderstood, making it easy to stumble into non-compliance. For example, users may have access to functions and features they do not have the usage rights for, or be using a product in one region when it is licensed for another. What is more, SaaS solutions and any-non-compliance are more easily tracked by vendors than on-prem solutions, making it more difficult to mitigate risks.

Fragmentation and democratization

This past year has increased the natural tensions between IT and Procurement teams – who owns which processes? Who is accountable for the contract strategy? The product selection? Who defines which products are necessary for the future? What about time frames and deployment? Who is asking the difficult questions?

This has led to the fragmentation of procurement and democratization of software purchasing. Anyone is now able to buy software and small, autonomous product teams are emerging. Indeed, cloud has given anyone the ability to buy a solution for any operational or business challenge they are trying to fix. In addition, people at a technical level are also being empowered by organizations to spend money – the centralized, controlled framework of IT that once owned budgets and decisions is no more. As a result, they are also no longer accountable for when it goes wrong.

FinOps and unitizing the cost of cloud

In light of these issues, organizations want to evolve ITAM to be more accountable financially on a day-to-day basis and we are already seeing various frameworks emerging that attempt just that. FinOps, for example, aims to bring financial accountability to the variable spend model of cloud services, enabling IT, finance and business teams to better manage the cost and quality of these deployments.

Indeed, businesses are increasingly interested in FinOps to better plan, budget, and predict future expenditure and requirements for cloud. Part of this process is unitizing cost of cloud. This means linking a piece of cloud investment to an organizational or business metric. For example, the number of employees, revenue line, or cost of managing risk. Being able to baseline this investment and establish an appropriate level of cloud spend, will allow you to demonstrate if the right decisions are being made.

Establishing operational frameworks to manage both upfront and forecasting of cloud consumption, as well as establishing ownership and accountability, is a necessary approach to capturing and controlling cloud investments. This is particularly critical in an era when Procurement and IT are fragmented and democratized – at the heart of this is ITAM Governance.

The necessity of ITAM Governance

To gain control over our increasing reliance on cloud-based solutions, some form of ITAM Governance is needed. Oversight and accountability are key to avoiding overspending and non-compliance. It also bridges the demand gap between IT and Procurement, helping Procurement to identify future requirements and IT to manage BAU.

Cloud policies are already growing, with operating frameworks being implemented to meet Governance challenges and to establish more control over strategic decision making, like vendor and tech choices. While these are a start, it is important to remember that any ITAM Governance policy must drive meaningful and futureproofed outcomes across all operating needs.

With today’s financial management and SaaS-related OPEX challenges, extensive Governance is needed outside of IT and Procurement, with the people who are empowered to buy and spend money within a cloud contract. With OPEX in particular, there will always be ongoing financial scrutiny and consequences, and Governance must be in place to ensure best practice and that decisions are being made in the interest of the organization without exposing it to unnecessary risk.

In short, ITAM Governance is key to managing policies and processes, as well as ensuring all stakeholders are accountable financially and operationally. ITAM Governance must be ubiquitous across an organization in order to be effective, especially as cloud-purchasing becomes more prevalent outside of Procurement and IT. Indeed, as cloud buying becomes simpler and more transparent, accountability and Governance are essential.

For more information on ITAM Governance, read our ITAM Governance Best Practice guide.

You can also hear more about ITAM trends on our on-demand webinar:  ITAM Round Up – Key trends and how ITAM needs to respond

 

ABOUT THE AUTHOR

Author: Hugh Skingley, Chief Consultant, Livingstone Group

Hugh Skingley is one of Livingstone Group's Senior Consultants.  Hugh joined the team in 2015 and brought with him over 20 years of experience in IT and IT Asset Management.  He has a strong background in IT service delivery gained in the financial sector.

Hugh is passionate about helping organizations to achieve a more holistic, integrated approach to Software Portfolio Management that combines governance, analytics and business processes to create a practical and sustainable SAM operation that will deliver real value.

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