As many as 80% do not know what (if any) cost savings they are making from management of IT assets. With an annual IT spend of £43 billion by UK businesses, KPMG puts potential wastage at up to £17bn - half what the Government takes in Corporation Tax. Recent estimates from the US suggest that between 10% and 40% of overall IT costs can be saved by effective procurement and management of hardware and software.
Reasons identified by KPMG for the current waste include:-
- "Renegade" purchasing outside the authorised IT budget;
- Lack of any managerial accountability for the area;
- Bureaucratic and complex procurement processes; and
- Failure to consider the question at Board level.
The survey did show, however, that a small number of aware firms (3%) are achieving substantial savings through good practice. Paul Diamond , Director of Information Risk Management at KPMG, identified a few steps that organisations can take to gain some control over their IT budgets:
- Make a list of all the hardware and software in the organisation - is it all really necessary and is it all licensed?
- Appoint a senior manager who will have authority over all IT asset management and licensing matters, be accountable directly to the Board and be rewarded in terms of cost savings achieved.
- Appoint one or two trusted suppliers and insist that all IT purchasing goes through them. As well as bulk-buying savings, they will be able to help in the key areas of preventing over-purchasing and sorting out correct software licenses.
- Have mechanisms in place to pro-actively manage this area, including those assets which are bought outside of the “trusted suppliers” route.
A 6-page executive summary can be downloaded in PDF format from KPMG’s site.