I need help with reducing my Software / SaaS / Cloud spending
Many organizations do not know how much they are spending on Software / SaaS / Cloud. We help identify and optimize your spending.
Software / SaaS / Cloud expense reduction
Controlling software and Cloud costs is a real challenge for companies. Software and cloud services are easy to buy but very difficult to manage.
- According to the latest studies, software spending represents on average 30% of IT budgets.
- 30% of monthly SaaS payments are for software that is not used (source: Gartner).
- Large companies have 15 times more SaaS applications than they think (source: Cisco).
- In large companies, 89% of former employees still have access to a SaaS application (source: Gartner).
- Cloud spending averaged 23% over budget and is expected to increase by 47% next year (source: The Register).
Do you know how much you are spending on software?
Software costs continue to grow rapidly. Although most organizations use a large number of suppliers, a few large publishers (Microsoft, Oracle, Salesforce) account for between 30% and 50% of spending. Publishers enjoy strong negotiating power, use complex contracts and metrics, and systematically inflate their license and maintenance prices. Despite this, it is possible to control or even significantly reduce your software and SaaS expenses.
Case Study: Leading banking and insurance company exceeds its cost savings expectations and improves governance of IT purchasing
Situation and problem
Our client is a European leader in banking and insurance. In 2019 the company launched a three-year programme to reduce IT spending. The company engaged Elée to help the IT department reduce spending on software and SaaS, which totalled €15 million in 2019, by 10%.
During the first six months of our engagement, we helped the IT department’s purchasing team to manage their Oracle assets and contract. We also provided in-depth expertise to help the team interpret Microsoft and IBM rules and contracts. Our consultants were able to provide senior decisionmakers with a clear picture of the issues, risks and remediation opportunities to help them make quick and effective decisions.
Meanwhile the organization’s SAM tooling project was struggling. We provided a consultant with expertise in Snow Software to accelerate the ingestion of data into the tool and to ensure that the data was useful to the purchasing team. We processed data from 214 publishers including IBM, Microsoft, SAS, Compuware, Cegid, HP, Informatica, Dassault Systèmes, Acensi and Axway.
We were engaged through an annual contract that included a flat fee and a success fee.
Our client’s initial target of €1.5 million in savings was exceeded in 10 months and was raised to €3 million.
Besides saving our client money, our approach has enabled our client to improve governance, teaching the IT and purchasing teams some best practices to contain and challenge software spending.
Our contract was renewed in 2020 then expanded in 2021.
Elée now has 5 FTEs integrated into the client’s team. Our experts help manage contracts and deadlines with key publishers, monitor renewals and other deadlines, keep the Snow Software tool up to date, and continually monitor software and SaaS spending through an efficient demand management process.
Priorities for managing Software, SaaS and Cloud spending
Identify usage and spending
Today, many organizations lack a complete picture of which software is used by their employees, and they are not able to document their software, SaaS and Cloud spending.
Identify contractual deadlines
A large portion of spending is linked to subscriptions and maintenance contracts which are automatically renewed without being anticipated or challenged. Do you have the tools and processes to prepare for these deadlines and take action in a timely manner?
Question the need
A large number of software applications are duplicates or are not in the organization’s catalog of preferred solutions. Licenses for applications are purchased unnecessarily because the organization is unaware that it already has available licenses. Have you implemented demand management processes and rights management tools?
Too often, procurement teams do not have the time necessary to rationalize the publisher portfolio, question usage and needs, benchmark prices, investigate competing publishers, terminate contracts, etc.
How Elée can help optimize your expenses
Our software cost optimization service aims to generate cash savings in the short (over the year) and medium term by reducing OPEX maintenance and SaaS costs for all publishers. We can work on the entire contract portfolio or on subsets of applications or publishers.
Audit and initialization
This first step gives an overview of software suppliers and expenses per contract, contractual deadlines and users. This must be carried out over a short period of time. Communication of objectives and progress must be clearly addressed to all IT, procurement and legal stakeholders as well as key user departments.
Analysis and evaluation
Based on the mapping, different work streams will be defined, including actions at the level of publishers, contracts, applications or products, with different levels of priority depending, for example, on financial issues or contractual deadlines. This is when our teams will conduct a study of contracts and usage to define optimization levers and target savings per action and per contract. In certain cases, inventories as well as risk analyses may be recommended.
Implementation of the approach
The implementation is based on joint work between Elée’s teams and your organization’s IT, procurement and legal teams. In some cases, this work also includes publishers. Actions, and calculations of savings, are monitored continuously and are documented to ensure they are auditable.