Sourcing and vendor management leaders should manage expectations and declutter their clouds.

“The world is changed.” The famous opening of the film series The Lord of the Rings is also true for IT asset management (ITAM). Digital business has changed the way technology assets are deployed, used and managed. It even changed the very definition of “technology asset.” Sourcing and vendor management leaders must now step up their game to survive in the new, digital world.

“Gartner defines a ‘technology asset’ as one that can generate, receive or process digital information to support business activity,” explains Stephen White, research director at Gartner. “Things like ownership, subscription status or location are not important anymore. What matters is that all assets are governed and managed according to ITAM principles and best practices.”

Gartner has identified two key developments that will shape ITAM until 2020.

No. 1: Dissatisfaction with software asset management (SAM) tools

Through 2020, only 25% of enterprises will be satisfied that their SAM tool purchases align well with prepurchase expectations of value. This is an increase in satisfaction by only 2% compared to 2016.

“SAM is becoming more challenging every year,” says Roger Williams, research director at Gartner. “Increasingly complex license agreements in conjunction with the shift to the cloud require a mature SAM practice to deliver optimal value.”

To make sure their organization achieves desired results, sourcing and vendor management leaders must create a conservative business case for SAM tool investments and develop the capabilities required to deliver expected benefits. When purchasing a tool, they should validate whether it will meet their needs, for example, though RFIs, RFPs and proof-of-concept testing.

No. 2: Addressing the rapidly mounting issue of cloud waste

By 2020, eliminating the unnecessary consumption of platform as a service (PaaS) and infrastructure as a service (IaaS) will become a high-priority focus of SAM discipline for 50% of organizations.

IaaS and PaaS are becoming core components of IT strategy, with organizations moving to these public cloud platforms with an expectation of cost savings. Increasing consumption of services that are “on demand,” and operate with speed and agility, combined with poor practice, lack of visibility, control and assigned responsibility leads to “toxic” consumption — unnecessary use that results from PaaS and IaaS overprovisioning and idle instances, with “meters” continuing to run, thereby incurring unnecessary costs.

“A lot of organizations pay for unused or underutilized services,” says White. “This creates a drain on the budget and risks eroding, or even exceeding, the benefits and business cases of PaaS and IaaS. One solution is to incorporate ITAM policies and processes within the cloud governance model and establish a continuous monitoring process to scale IaaS and PaaS to the most appropriate instance.”