With a recession looming and economic headwinds showing no signs of abating, many companies are scrambling to cut costs. Software is a prime category for optimization, and many companies are paying 50% more for cloud technologies than they were two years ago.
It’s tempting to overspend on top-of-the-line technology to increase efficiency and differentiate yourself, but this technological desire to keep up with the Joneses can come at a significant cost. Organizations currently have hundreds of software deals, mixing and matching apps, platforms, and an endless array of SaaS providers.
The result is that some of this spending is unnecessary. According to our internal data, which reflects over 10,000 contracts we’ve negotiated, companies overspend nearly 30% on their software.
The challenge is that most companies don’t have the right procurement infrastructure—data, tools, experts, and processes—in place to effectively manage the nuance and complexity of software procurement. You are essentially in “DIY” procurement mode.
The question is not whether there is waste or inefficiency, but how much.
As a result, they don’t know how much to pay for each tool, or what tools they really need, let alone whether they’re actually using what they bought, where they keep the original contracts, or when documented contracts are due for renewal. This divergent approach leads to massive inefficiencies, not to mention overspending.
How can you regain control of the process to ensure you are making the best possible decisions regarding your software spend? Start by asking yourself these three important questions.
Do I know what I bought and use it wisely?
Every company should review their current tech stack. No exceptions! Most companies suffer from bloat from years of overinvesting in software, and it’s important to have a clear picture.
Start by getting an accurate count of the number of tools and software platforms your business actually has and how much you paid for them. Next, make sure you know where the original contracts are and when renewals are scheduled. Also, find out if you have a single source of truth by checking that all your contracts and related data are stored and accessible from one place.
https://techcrunch.com/2022/06/27/right-size-your-tech-stack-to-withstand-the-downturn/ Right-size your tech stack to withstand the downturn – TechCrunch