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New Research: Fully Outsourced IT Expense Management Costs 5X Less, Delivers Faster Results for Business Innovation

Fully outsourced IT Expense Management (ITEM) solutions deliver faster results at a cost five times less, according to a new Vanson Bourne study commissioned by Tangoe.   

"As sprawling technologies and inflation consume larger proportions of corporate IT budgets, business leaders are growing increasingly concerned about their ability to sustainably innovate, including tracking spending, governing expenses, and stretching their IT budgets," said Becky Carr, chief marketing officer at Tangoe. "FinOps programs mature quickly and yield faster time to insights and savings when leveraging a managed solution."  

The study surveyed 500 IT and finance decision-makers from the US and the UK to explore their IT expense management practices. The research explored three approaches to IT expense management: fully in-house, fully external (third-party solution), and hybrid (a
mixture of in-house and external solutions). 

Read the research report.  

ITEM Required for GenAI Success 

Cloud infrastructure has been dominating IT spending trends due to recent accelerations in digital transformation and because it serves as the underlying enabler for AI innovation and new GenAI platforms. As the data reveals, financial management is central in safeguarding business continuity and innovation performance, especially when cloud spending will soon drain +50% of IT budgets and is only expected to grow with increasing GenAI adoption.  

"AI can trigger unpredictable cloud costs, which is why ITEM software and services are being used to ensure innovation doesn't drive a hidden layer of technical debt," said Carr.  

The findings spotlight the complexity of IT financial management and what's at risk without it:  

  • When it comes to tech sprawl there's no end in sight. Respondents predict double-digit spending increases over the next couple of years with cloud infrastructure (20%) and software (16%) investments leading the way. Additional investments in mobile and telecom technologies aren't far behind.
  • Business continuity and operational performance are at stake. Late payments cause 85% of organizations to experience outages in their cloud, mobile, and telecom services.
  • Managing services and expenses is growing increasingly complex. On average organizations handle 39 IT service providers with 60-80 employees involved in overseeing them.
  • Data analytics are among the top three challenges for in-house ITEM programs. Given the growing number of cloud applications and mobile devices in use today most companies can't get past the first, most basic phase - applying advanced analytics and turning data into actionable insights.

The Value of a Fully Managed Service 

In addition to putting context around the urgency and challenges associated with financial management, the study also reveals the advantage of using a fully managed service for IT expense management:

  • Businesses with either a fully outsourced or hybrid solution experience process efficiency and productivity gains (90%), faster time to business insights (88%), and faster time to cost savings (88%).
  • Only 66% of in-house programs deliver results within the first month, while 81% of fully outsourced solutions deliver results within the same timeframe.
  • Ninety-four percent (94%) of organizations using a third-party to manage IT expenses, also have a dedicated FinOps practice. Additionally, having a FinOps program leads to 20-28% lower spending across cloud infrastructure and cloud software.
Published Tuesday, April 23, 2024 1:24 PM by David Marshall
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