Take the next step in your cost savings journey

One of the hottest topics in the business world in general, and even more so during the current global pandemic, is budget. Everyone wants to cut costs, save money and make smart investments. In a previous article, we covered the first step in this journey: saving costs on your Oracle support renewal. However, the support renewal is only a portion of your total IT spend. Do you know where the rest of your spend is coming from? If not, don’t worry. It’s not unusual for companies to lack a good overview of where the money goes and the good news is, it’s not impossible to find out.

It all starts with a baseline, or software license reconciliation: an overview of your entitlements and of your usage situation and the comparison between the two. Having this clear view will help you determine the strategy that you need to follow to achieve further cost savings. If you’re already at this point, you might have a strategy in mind and perhaps even a plan to save costs. But have you considered what you will do with the costs that you are about to save? Putting this money back in your pockets might seem like a good idea, but investing it to save or even make more money sounds better, doesn’t it?

Next step: smart investments

The way money flows is not always straight forward. Sometimes you purchase something only to realize after a while that you don’t really need it and are better off investing the money in something else. Let’s say you purchased Oracle licenses with the associated support a few years back. Since then, your organization went through changes and some of the licenses are no longer needed but you continue to pay the support fees and the year-over-year indexation. Naturally, you’d want to terminate the support and only keep the licenses that are actually in use. You’ve learned that this is possible and got your money back but now what? To help your organization move forward, the next step would be to invest the savings you made into funding the next phase.

Gain insight and achieve bigger savings

What this means is that you can invest the money you just saved into the creation of a software asset management discipline that becomes self-funding. Instead of always having to treat it as a cost center that’s funded by other parts of the organization, you can now see it as a closed circle where the money you invest doesn’t get lost, but rather helps you achieve additional savings. This way, you create a cost savings mentality by investing your savings into the next step in your software asset management practice and increasing the savings after each iteration. You can then start to use these savings elsewhere - into migrating part of your infrastructure to the cloud, for example.

The path to the cloud

Until recently, conversations about software spend were usually about on-premise software. This is still a big part of the focus for many companies but cloud is – not so slowly anymore – taking the spotlight. If you haven’t yet considered moving to the cloud, it’s very likely to come up in conversations sooner or later so you should be prepared. If you are using cloud software, do you have insight into your cloud spend? More and more companies are looking for a practice that brings financial accountability to software licensing and cloud spend - and that’s where FinOps comes in. By engaging in the FinOps practice, you will be able to gain the visibility you need for cloud spend allocation, empower your teams by providing actionable recommendations and build governance policies that provide continuity and structure.

Regardless of where you are in your journey, remember that the starting point for any cost savings is having a good baseline. Looking at your current situation as well as the future roadmap will help you reduce costs, optimize your licensing estate and determine the next steps.