How to make better technology investments

Cloud. On-prem. SaaS. Varied business services. Multiple vendors. A shifting workforce.

These are the realities of contemporary hybrid IT environments, which create complex, rapidly changing management scenarios. While evaluating and managing a sprawling IT estate may seem like a daunting task, doing so can be a rewarding challenge that unlocks new efficiencies and leads to more optimal technology investments.

Today, IT spending is on the rise. Nearly half (49%) of companies anticipate that IT spending will grow in 2021. Much of this is to meet the new demands of digital transformation. Not only is it the top initiative (reported by 56% of survey respondents), 86% expect that the pace of digital transformation will increase (somewhat or significantly) in 2021. At the same time, the focus on cost savings (reported as a top initiative by 9% in 2020) is growing 3x (reported as a top initiative by 27% in 2021).

These findings from the Flexera 2021 State of Tech Spend Report highlight fundamental challenges for IT. The second annual report (based on responses from 474 executives and high-level managers in IT, each with significant knowledge of their organization’s overall IT budgets) evaluated the technology initiatives in which enterprises are investing. As spending grows, how can organizations find savings to reinvest in digital transformation, cloud computing, and other top priorities, such as cybersecurity?

Technology value optimization (TVO) is the IT management practice that provides visibility into a company’s entire hybrid IT asset estate (spanning on-premises data centers and the cloud environment) to unite management of IT services and finance. Below are six TVO steps that IT departments can take to identify IT spend and reinvest in technology initiatives.

flexera 2021 state of tech spend report 01 Flexera

Move beyond the shock of the pandemic

The COVID-19 pandemic clearly had a major impact on organizations and their pace of digital transformation. An increased willingness to move to the cloud (reported by 42%) is supported by growing cloud spend, which now represents 30% of IT spend. Due to COVID-19, 57% of respondents increased spend to date for SaaS, and 49% increased public cloud spend. Concurrently, spend for on-premises software is decreasing, as reported by 36%.

Copyright © 2021 IDG Communications, Inc.

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