LeanIX’s Cost Optimization Survey Finds Technology Debt and Lack of Visibility into IT Landscapes Drive Wasted IT Spend
Three-quarters of companies admit that avoidable costs account for 10%-20% of their IT budgets and 40% have not implemented the most common best practices for optimizing their IT landscape
BONN, Germany and BOSTON, March 30, 2023 – LeanIX, a leading platform enabling continuous transformation of corporate and product IT, today announced the findings of its IT Cost Optimization Survey. The report reveals that, even though IT budgets are expected to remain constant or even grow, most organizations waste up to a fifth of their IT spend. What’s more, a significant number of companies have not implemented well-known, best-practices for optimizing spend, meaning that they are unable to reallocate these wasted resources to drive innovation, enhance productivity, or increase profitability.
Mergers and acquisitions, business-led SaaS purchases, and ever-changing business priorities have created unplanned and unstructured IT landscapes. What’s more, during the height of the COVID-19 pandemic, many IT admins “let things go” as they focused on supporting remote work and rapid digital transformation. The result is an under-optimized infrastructure characterized by avoidable waste and lurking vulnerability. IT overspend today has several causes, from poor application portfolio management and unaddressed technology debt to ongoing support for investments that haven’t paid off. Now, every organization must either clean up and optimize the IT landscape or face persistent security threats and lagging performance.
The survey looked at waste in IT budgets – what’s behind it and areas for potential cost savings through IT optimization – as well as the need for improved collaboration across the enterprise when it comes to technology decisions.
Key findings include:
- Over 90% say that IT budgets will grow or remain the same.
- The majority (54%) say 10-20% of their current IT budget is wasted. Almost 25% say that amount is over 20%.
- Fifty-six percent of respondents say outdated technology and technical debt are particularly high contributors to wasted IT budgets, while 42% say redundant applications contribute strongly to these expenditures. Only 4% report that they are most concerned about costs due to poor cloud management.
- Twenty-seven percent of respondents said the primary goal of their company’s IT optimization efforts is to free up budget for more efficiency. Another 25% said it was to reduce IT costs for profitability and 21% said it was to mitigate technology risks.
- Fifty-nine percent of respondents said the lack of visibility into the IT landscape and technical interdependencies are a significant hurdle of IT optimization within their companies.
- Nearly 50% of respondents said that collaboration between IT teams and the business is poor when it comes to aligning on IT optimization decisions.
- Only 15% of companies surveyed have implemented a regular application rationalization program – though a majority of businesses plan to do this at some point in the future.
- Forty percent of organizations have not implemented a formal SaaS management process.
“It’s great to see optimism in the market about IT budgets,” said André Christ, CEO and co-Founder of LeanIX, “At the same time, this survey shows that a significant portion of IT budgets do not deliver real value. Given the increasing financial uncertainty we all face, this can’t last. The good news is that there are established ways to optimize IT spend, application rationalization, for example. The bad news is, the too many companies have still not made them standard operating procedure. Our goal at LeanIX is to change that.”
For more information about LeanIX, visit www.leanix.net
In November and December of 2022, LeanIX conducted an online survey of more than 150 of its customers – from a range of industries – across Europe, the U.S. and other regions, most of whom hold leadership roles in global companies across a variety of industries. Sixty-eight percent of the respondents work as enterprise architects, specializing in organizing and managing IT portfolios.
LeanIX's Continuous Transformation Platform® is trusted by Corporate IT and Product IT to achieve comprehensive visibility and superior governance. Global customers organize, plan and manage IT landscapes with LeanIX's automated and data-driven approach. Offering Enterprise Architecture, SaaS Management, and Value Stream Management, LeanIX helps organizations make sound decisions and accelerate transformation journeys. LeanIX has hundreds of customers globally, including Adidas, Atlassian, Bosch, Dropbox, Santander and Workday. LeanIX is headquartered in Bonn, Germany, with additional offices in Germany and subsidiaries in Boston (USA), London (UK), Paris (France), Amsterdam (Netherlands) and Ljubljana (Slovenia). For more details, please visit www.leanix.net.