Author: Hyoun Park

As organizations throughout the United States look toward a third quarter of COVID-influenced operations, it’s imperative to keep considering all the ways IT can act as steward for the business. Over the past couple months, Amalgam Insights has provided guidance for moving from survival mode to functioning in ways that conserve cash and save jobs. We’ve hosted webinars and published blogs covering everything from adjusting network resources to managing the nitty-gritty of cloud expenses. 

Now we begin to pull all of that together for a bigger picture. IT must support all newly remote staff as well as all network, mobility, cloud and SaaS costs, and stand accountable for every decision. And because it appears COVID-19 will be around for some time, the pressure to perform is nowhere near close to relenting. With the reality of another 6-12 months of operational challenges similar to what we currently face in this pandemic recession, Amalgam Insights aims to help IT level up to best prepare for top-level financial discussions. IT already handles expense management. Now it’s time to elevate, and understand and speak the language of IT finance. 

Clearing up Confusion

Before we go too far, let me clarify the term “IT finance.” Just because someone touches IT costs or expense does not mean they do IT finance. Most expense analysts work either with accounting or sourcing personnel, but rarely speak with the planning and budgeting personnel who hold the power of the purse. Expenses are the tactical, day-to-day entries that finance uses to calculate more strategic business metrics, such as cash flow, income, and business projections.

IT finance cares about the expense manager’s role to cut unnecessary costs and improve the organization’s cash flow based on the IT Rule of 30. Every unmanaged IT spend category averages 30% in waste. Waste crops up in circumstances including mergers and acquisitions, layoffs, furloughs, project changes, shifts in technology commitments, and so on.

In general, and the following will vary depending on vertical and profit levels, IT can save around 1% of bookings, which is equivalent to 5-6% of payroll or 15% of operating margin in the average enterprise, by cleaning up technology across the organization. How do you do that?

Review our blog on the 6 Stages of Managing COVID IT, as well as the subsequent insight we’ve provided. The takeaway now is that everyone should at least be in Stage 2 or 3.

Stage 1, in April, was all about survival. End users did what they needed to make sure they could work from home. Much of this they accomplished without following company policy. That’s valid and it’s okay. Still, the time has come to clean up, and enable and empower everyone to make good decisions. Part of that mandate includes making sure IT delivers insightful, meaningful input to CFOs and controllers. That’s where IT finance comes in.

What Is IT Finance?

Simply put, IT finance creates a shared vision of corporate health among IT, finance, and the rest of the business by looking at the planning, budgeting, and forecasting activities that highlight how people are using IT. That translates into giving employees the tools they need and aligning IT with revenue and key business goals. IT finance includes the following metrics that demonstrate what is happening with the costs that are saved or controlled through expense management:

• Income: This is actual profitability based on receipts, Cost of Good Sold (COGS), SGA (Selling, General, and Administrative) Expenses, debt interest, and other relevant inputs.
• Cash management: This deals with monthly cash flows and reflects the company’s current cash position and ability to conduct day-to-day business. IT departments in touch with finance can ask if cash can be reallocated back to IT or to other parts of the corporate budget while IT departments who are not part of this discussion will simply be treated as cost centers to be slashed to the bone.
• Business outcomes: This gets into return on investment and payback periods (more on these topics below). The information tied to business outcomes justifies IT’s investments. 
• Budgeting and forecasting: These practices show how IT costs are measured, and how they reflect demand within the organization.

Further, IT finance looks at cross-charging for IT assets and services to create more granular business plans and forecasts. This plays into the point about how end users put IT to work. To assess this, IT finance pinpoints every user/owner, cost center, profit center, department, location and project tied to each asset and/or service.

(Pro tip: Waste easily occurs when a user/owner moves among departments or leaves the organization, or when someone else takes over a project or resource. IT must record all such changes as it exits survival mode. Doing so not only will eliminate unnecessary spending, it also will provide the details for tracking how each cost rolls into the organizations’ finances.)

Understanding IT Finance’s Key Metrics

To speak the language of IT finance, it’s critical to know and present the following key metrics:  

1. IT as Percent of Revenue. This metric displays the IT budget as a percentage of the organization’s overall revenue – all sales, receipts, etc. It then looks at how much of that revenue goes toward IT. Core IT tends to rank around 3% of an organization’s revenue with a great deal of variability based on verticals, geography, and company size.
2. Operating Margin. Next, analyze actual profitability. On average, US companies average a profit margin of about 7%. Whether your margin is 1% or 20% makes a huge difference in what needs to happen operationally in planning your IT budget. 
3. Payroll as Percent of Revenue. Taking the IT Rule of 30 into account, this metric means there is a chance to affectds 5-6% of payroll, on average. Controllers, CFOs and their teams may not spot this as an obvious opportunity, so IT must point this out and speak the language of finance.
4. Return on Investment. This metric presents the ratio between net profit and investment cost from a project perspective. Many IT departments only know how to present either raw cost or the Total Cost of Ownership to their leadership and are poorly equipped to demonstrate or articulate potential business opportunities in the language of finance.
5. Cost of Capital. This is how much it really costs the organization to use money and is typically tied to a company’s realistic expectations for growth over the next year.
6. Net Present Value. Your finance team uses this metric already (and the next one) to identify opportunities. Net present value essentially boils down to discounted cash flows associated with a project, portfolio, or use case. 
7. Internal Rate of Return. This metric estimates the profitability of an investment and can be used by finance to list a variety of projects across all areas of the business to determine which are most profitable.

Finance experts rely on the last two, NPV and IRR, extensively. Therefore, IT must provide these metrics because they help CFOs to understand everything in front of them – all the finances related to IT, HR, operations, sales and marketing, and so on. If IT does not provide NPV and IRR, the department will fall a step behind all the other lines of business that are treating their outputs in language finance understands. IT has the immense power to save jobs, the ultimate goal of 2020, but needs to articulate these opportunities in mature business terms.

Exploring ROI and Payback Periods in More Depth

Return on Investment and payback periods justify IT investments. For IT to get new technology funded, IT has to convince executives to fund technology that will support remote work and employees’ subsequent productivity and, as a result, boost the organization’s profitability.

Off the bat, know that “ROI” often gets misused. What means most to finance is the net return on investment; this is always a percentage. ROI on a project, then, must tally higher than the cost of capital.

(Pro tip: If IT cannot speak to how the ROI is higher than the current profit margin/rate of return, then finance will not sign off on an initiative. Another pro tip: Do not stretch ROI over too much time (i.e., 3, 4, 5, years). In fact, in today’s environment, anything with a payback period over 90 days is suspect and any ROI calculated over more than two years is making assumptions that nobody can truly predict. Address this situation by providing information on payback period.)

To that point, the unique circumstances of 2020 mean it is easier to look at spending from the view of payback period, or the time needed to get money back. As of right now look for rapid payback of three months or less. Anything more than that for the foreseeable future will make it harder to gain leaders’ buy-in.

Ways to Contextualize IT

Finance professionals assess three different categories to contextualize money. Really grasping the difference among these will give IT the acumen to rise from an expense to a finance mindset. As such, they are:

• Income statement
• Balance sheet
• Statement of cash flows

Income Statement

This is the income the company (or department) has. Make sure to parse the difference between gross and net income. The latter represents cost of goods sold, sales and administration, and research and development; the former shows what the organization brought home. Note, however, that at this moment in history, finance experts are not so wrapped up in income/profit as a key metric. That may sound counterintuitive from a common-sense perspective but profit does not indicate cash on hand. Yes, profit influences valuations and stock prices, but throughout 2020, cash is king. Net income will help IT to show how its savings support bottom-line results.

Balance Sheet

These are all the assets and liabilities within the company (or department). The most common metric for showing this is Capital Expenditures (CapEx) vs. Operational Expenses (OpEx). From an IT perspective, show how spend plays into the CapEx and OpEx budgets. In the era of digital transformation and cloud, much of an IT department’s outlay will fall under the OpEx umbrella – which finance leaders often prefer. There is no depreciation or amortization associated with OpEx spending. In many cases, OpEx spending lends itself more easily to return-on-asset discussions. Though OpEx IT spending amounts to renting a service or asset, OpEx avoids the depreciation and inevitable replacment costs that CapEx provides (although OpEx spending comes with its own risks, such as uncontrolled usage). At any rate, providing data about return on assets can help finance understand in even more detail what IT is doing.  

Statement of Cash Flows

Cash flows show what is coming into the company (or department) and leaving it. 

This is the most essential context finance needs in 2020.

I cannot overstate this.

Organizations are living and dying by cash on hand. Do not just talk about cost optimization and moving CapEx expenses to OpEx. IT must know how all spending affects cash flow and be able to discuss that coherently and clearly with finance leaders.

Immediate opportunities to improve cash flow can be as extreme as paying bills late or asking for a bill “holiday” from vendors to keep cash in the interim. This is an artificial solution for maintaining cash in the short term if needed, and this level of cash management must be set up delicately with both executive approval and prior communications with vendors.  

Conclusion: Top Takeaways for IT Finance in 2020

To prepare for fruitful IT discuusions with the office of the CFO, address on the items on this checklist:

Act on the IT Rule of 30: This is the primary way to reduce costs in unmanaged areas. It’s especially important to apply this rule to cloud IaaS and SaaS because those are the two IT areas growing in 2020; all else will shrink by 5% or more.

Define ownership for all assets and services. Again, this is a clean-up exercise. Accept that shadow IT ran rampant throughout March and April and get to work fixing the mess.

Remember that finance amounts to more than cost management. Finance entails planning, income, cash flow and understanding how money is used in the organization. This goes far beyond basic costs and billing management.

Create a shared vision for corporate health. Now is the time to figure out what it means to cut costs responsibly to save and bring back jobs. IT and finance professionals need to work together on this. Be proactive, not reactive. 

Know how IT costs can affect key statements – income statement, balance sheet, and statement of cash flows. IT must understand how IT costs affect the business as a whole and when IT investments can exceed the value of their cost. This will make a big difference in discussions with finance professionals and allow IT to understand its impact on the company. IT professionals who just talk about costs and expenses without any context of potential value and business growth reduce their impact on the business because they position IT as a commoditized cost center. Basically, they sell their departments short. Provide context for what you’re doing.

Finally, provide the relevant metrics to justify IT investment. Right now everything has to be about cash management and saving jobs. Anything beyond that is nice if you’re one of the few companies going like gangbusters. But for most organizations, immediate payback period and cash are indispensable. Think about what will make an impact in 2020.

***

If you are seeking outside guidance and a deeper dive on IT Finance, Return on Investment, and making the IT case to Finance, Amalgam Insights is here to help. Click here to schedule a consultation.

Join us at TEM Expo available on demand until August 13 at no cost to learn more about how to prepare for COVID IT and take immediate action to cut costs. In context of this topic, we recommend the following sessions: Robert Bracco and Dana Risley of MobiChord speak on the role of IT Financial Management, Planful CFO Shane Hansen speaks on the importance of cash management, and our Executive Panel digs into the IT Finance as a strategic tool for escalating the IT professional.

• 

• 

• 

• 

• 

• 

• 

And if you’d like to learn more about this topic now, please watch our webinar on IT Finance.

COVID-19 and the worldwide shift to remote work has, perhaps irrevocably, changed IT. Before the pandemic, the IT department may have let some costs and shadow technologies slide. But now, there just isn’t room for slack. 

In this installment in our series on COVID IT, Amalgam Insights looks at payment and invoice processing issues. This is a key area for IT, finance and sourcing/procurement to clean up together. The more waste the organization eliminates, the more cash it can save and the more jobs it an bring back – two main goals for any business in a recessionary environment. With that in mind, read on for more best practices that will help IT and its line-of-business counterparts navigate rough waters and steer toward recovery.

‘Normal’ No Longer Cuts Muster

Even in “normal” times (remember those?), IT lost a lot of money through inaccurate and unchecked invoices. Now, though, the situation has worsened. Since March, when the coronavirus pandemic started affecting most of the United States, IT experts found themselves adding and removing accounts galore. Either people had been laid off and IT needed to make the resulting changes, or people required more technology to support productive work-from-home experiences (and some of these extras slipped past IT’s notice – i.e., shadow IT). Either way, the chaos intensified. 

Speaking of remote work, Amalgam Insights estimates that 42% of employees (over 60 million workers) in the United States no longer go to an office. That’s compared to an estimated 8% at the end of 2019. Clearly, COVID-19 has changed the nature of work for months or years to come. 

For IT, the trickle-down effect comes in the form of shifting technologies to accommodate secure remote access, while simultaneously devoting attention to stringent expense management. This blog focuses on the latter issue; go here to read about the former. So, the best way to start paring and streamlining costs? Act on the IT Rule of 30.

The IT Rule of 30

The IT Rule of 30, based on our experience and research, states that every unmanaged IT subscription spend category – mobility, telecom, cloud, SaaS, you name it – averages 30% in waste. If your organization spends, say, $1 million a year on technology subscriptions, odds are that $300,000 is unnecessarily going out the door. Across all IT spend categories, this waste typically makes up 1% of bookings or 6% of payroll. In other words, that money amounts to salaries and/or cash that could (should) have been conserved. 

Consider this, too. Every time a new technology or configuration of a technology (Bring Your Own Device for mobility, for example) enters the organization, the IT Rule of 30 comes back into play – even if expense managers have addressed existing spend categories. The work is never really done.

A Refresher: Where Are You in the 6 Stages of COVID IT Management?

Let’s step back a little. Before you can make much more progress, it’s important to know where your organization stands in the 6 Stages of COVID IT Management. In theory, by mid-May, the business would have just finished up Step 1, or Survivor: Shadow IT Edition, as we like to call it. By mid-June, organizations really should have reached Stages 2 and 3 – securing the business and auditing the environment.

The bills IT received in May will reflect the first full month of COVID-based charges. And that’s where up to half of your savings may be hiding, in plain sight. If you’re conducting month-over-month invoice reviews (which most IT departments are unless they’re just super disciplined), follow the guidance below for uncovering a whole slew of savings opportunities.

1. Compare February, March and April invoices. Spending amounts will have fluctuated. Some areas will show increases while others will have gone down. Take note of the spending variances across these three months. 
2. Check changes in accounts, features, and usage. Here, for instance, cloud resources dedicated to the headquarters office may show precipitous declines in usage because nearly everyone, is working off-premises. Conversely, as another example, you likely have a leap in mobility and SaaS accounts, features, and consumption that needs to be reconciled.
3. Identify abandoned technologies. “Abandoned” often translates into what is commonly known as “zombie” services, features and devices. Look for zero-usage services and equipment and any associated features. Typical suspects include old projects that have long ago wrapped up or devices assigned to an employee no longer with the company.
   
   On a granular level, zero usage is harder to detect when employees have more than one device. And from a cloud perspective, the sheer amount of invoice detail can stymie even the most attentive IT expense expert. Automation and other tools come in very handy – but more on that in a bit. In terms of technology substitutions, employees may have swapped out one SaaS platform for another, but the organization continues to pay for the old one. In fact, this situation helps create an environment of duplicate types of services.
   
   For example, organizations are supporting more video conferencing platforms than they need. Survey your internal end-users to understand which services are most useful and functional and then narrow down options based on true employee need. Invest the most with the most useful platform and then use that as an opportunity to boost contract-term negotiations with the chosen vendor.
   
4. Detect duplicate services: On a similar note, regarding duplicate services, explore what’s hiding in the IT shadows. During the scramble to remote work, a lot of staff brought their own apps to the corporate environment. Either security measures barred their accesses or they just couldn’t use the organization’s required counterpart for some reason, so they made sure they could perform their jobs by introducing their own technologies. The organization may be paying for some or all of these shadow IT resources. Determine what can be eliminated or condensed.
   
   And use this time as a chance to build teamwork among expense-management colleagues as well as at-home employees. The idea is not to alienate anyone or make their jobs more difficult. IT must do what’s best for the organization all around. Pro tip: If you find a zero-usage service or device on April invoices, that’s a big sign the asset needs to go. If no one capitalized on it mid-quarantine, it’s unnecessary. Do not wait for three months of zero usage on invoices to get rid of these money drains. Make a difference in the organization’s cash position now. There is no place for complacency amid this pandemic.  
   
5. Assess usage issues in greater detail. With zero-usage considerations out of the way, next look for overages. These will mainly show up in the mobility, SaaS, and cloud categories. Check out categories of usage that are typically either capped at a low amount of usage or priced at an exorbitant rate compared to normal services. For instance, that $10 base monthly charge may sound like a great deal for a mobile phone plan, but if it only comes with two gigabytes of data and your employee is using 100, that deal is likely to hurt your budget. Also look for geographic usage costs associated with roaming, transfer, and multi-region service usage.
    
6. Analyze Your Usage Data. If the IT department doesn’t already have a way to analyze data without overloading a person or a team, it’s past time to get one. This can be a system, a detailed algorithm, or a managed service provider with the requisite capabilities. There’s so much information to cull through and decipher – and then there’s the important follow-up work, including sharing results and strategies with procurement, finance, and other colleagues. Implement automation that scales alongside your needs because the amount of data to analyze will only keep growing. 
7. Don’t overlook taxes, surcharges, fees, and discounts. If cash becomes a real issue for the organization, these areas will prove crucial to evaluate. And even if your cash position is stable, there is no reason to pay for something you shouldn’t. First, check the accuracy, validity, and consistency of taxes and surcharges. Respond accordingly to clean up where necessary. A $5 charge 5,000 times adds up to a big deal. Then get with the account manager for each major vendor to find out what flexibility there may be for late fees.
   
   Next, determine whether any minimum annual revenue commitments are at risk because corporate assets went underused in March and April. Chances are, shadow IT compromised these contractual obligations. When talking with the vendor, you may be able to invoice “acts of god” circumstances that will alleviate fines or fees. Finally, make sure discounts match agreements made with vendors. Discounts can show at the line item, service, or account level, and therefore be hard to pinpoint. Expense and sourcing/procurement should work together to make sure discounts are showing up as expected. If they are not, initiate the dispute process. Above all, be proactive, not reactive.

If Your IT Organization Is Mature, Do This

The previous recommendations mostly apply to departments that need to refine their operations or that spend most of their money in an ad hoc manner; as a result, they review invoices each month. If your organization does not fit into that profile, it’s probably pretty mature. This means all IT services, devices, and other assets already are cross-tagged across categories including geography, cost center, project, and so on. It further means you can then talk with the assigned owner about the necessity of the service or asset with the goal of helping to drive IT strategy and working with your finance team on zero-based budgeting exercises and continuous planning exercises.

If All Else Fails, Go to Extremes

Finally, IT may need to resort to some extreme tactics during this recessionary environment, especially if the financials for the second half of 2020 are looking more dire than the first. If matters get worse, IT may need to do some or all of the following:

• Reduce payments or pay late. This could go one of two ways. Say you reduce payments by $10,000 per month, but make a deal with the vendor that it will get that money at some point in the future. This may not be possible. However, if there is a way to balance the scale later, as it were, once revenue returns, the vendor could view this as a somewhat palatable option. If not, you may need to exert brute force by either reducing payments without vendor approval or stop paying altogether.
  
  The caveat is that these approaches must first be set up with criteria that are provided to all of your vendors on the current state of the company’s finances and your organization’s needs. And this also requires the CFO’s support – and possibly the buy-in of other executives as well. These are draconian measures and top brass must know about and stand behind them. But this stance requires prior preparation: asking for reduced payments without transparency or executive backing is unlikely to work.
• Review contractual obligations to pay. Look at escape clauses, contractual duties, and service-level agreements. Assess whether each of these has been met or whether the contract has been breached in some form. If anything sticks out as a way to void the contract, proceed as it makes sense. 

Amalgam Insights does not present these recommendations lightly or cavalierly. The vendor ecosystem is critical to the IT environment and the relationships are vital. Ideally, IT and vendors will collaborate to find outcomes that work for both parties. The last thing anyone needs or wants right now is more strife. 

Conclusion: Key Takeaways for IT Invoice and Payment Management in 2020

There is no doubt about it: the IT environment has undergone sudden and perhaps permanent shifts to COVID-19. Because of that, IT must know how and where to cut costs to ensure responsibility throughout the rest of the year (and probably beyond). To do that, keep the following in mind:

• Remember the IT Rule of 30
• Understand that the IT organization should at least be in the second and third stages of COVID IT by now
• Identify new usage patterns, products, and vendors
• Optimize usage based on the “new normal”
• Be prepared to get tough with payment terms

And if you need any unbiased help with these actions, call on us. Click here to schedule a consultation.

Plus, join us at TEM Expo, available until August 13 at no cost to learn more about how to prepare for COVID IT and take immediate action to cut costs. In particular, Amalgam Insights advises sessions by Denise Munro on taxes, fees, and surcharges as well as David Schofield on contract negotiations for wired and wireless spend.

• 

• 

To learn more about invoice payment and processing and the tips and tricks that you may need in a pandemic recession, we’ve also recorded this recent webinar.

COVID-19 shows no signs of letting up in the United States. For IT, finance and procurement professionals supporting remote staff, this continues to present expense management challenges. In recent blogs and webinars, Amalgam Insights showcases ways to maneuver these issues as they relate to telecom and networking, mobility, SaaS; we’ve also provided in-depth recommendations for understanding the six stages of COVID IT.

Now we go into detail about a particularly difficult, yet critical, area to assess: cloud IaaS. Even if you have decades of experience evaluating telecommunications and IT invoices, cloud is a whole different animal. And I say “critical” because of all IT categories, cloud IaaS stands out as the one that will experience spending growth in 2020, given that it best meets the needs of a distributed workforce. Both of these realities add pressure to the expense management team’s responsibility to uncover and control costs tied to the organization’s technology environment. 

Managing IaaS: 3 Core Challenges and Their Solutions

The influx of cloud services during the COVID-19 pandemic is highlighting issues that already existed but that expense managers may not have yet tackled. Takeaway? In a recessionary climate, you can’t put off addressing these challenges.

1. Huge Growth

Again, cloud spending will soar this year. Amalgam Insights expects public cloud spend to increase by an average of 30% across all enterprises. This may cause problems, if it hasn’t already, with budgets. But operating according to the IT Rule of 30 should help. That’s our calculation that any unmanaged category of IT contains about 30% waste.

So even though you’ll see about 30% growth in cloud, you may be able to reduce spending by the same amount with mature oversight.

2. Extremely Detailed Billing  

Compared to telecom, cloud features even more granular invoicing. This applies to every cloud service or component the organization uses. Expense managers have to scour and inspect cloud invoices line by line to avoid missing anything, ideally with programmatic tools or algorithms to help manage the Brobdingnagian challenges of cloud bills.

3. Lack of Standardization

Cloud is no Ma Bell. The various vendors have never worked together and do not plan to work together. This means there is no standardization for billing terminology or structure. Your enterprise may benefit by creating or obtaining a glossary and ontology that brings together, correlates and defines the providers’ different references.

Spotting Opportunities for Cloud Cost Management

Organizations must get a handle on their 2020 cloud expenses now. COVID-19 has upended budgets, forecasts and consumption. Following these near-term suggestions will help IT, finance, and procurement regain control.

Identify the Cloud Boss(es). When it comes to the business side of cloud computing, most environments don’t have someone in charge. Now is the time to designate a person or team – executive and managerial stakeholders in charge of planning and budgeting – to oversee the business of cloud. Amalgam Insights has noticed cloud expense and planning tends to be a hybrid role. The ideal candidates usually have expertise in IT, finance/accounting, and procurement. Knowing that, some titles to consider are: Chief Information Officer; Controller; Chief Digital Officer; Vice President of Cloud; Chief Architect. By identifying an executive responsible for cloud and gaining the attention of this champion, cloud accountability becomes a bigger deal.

Analyze Service Usage. Cloud features myriad buckets and use cases. Therefore, IT has to pinpoint what goes where, why, and whether to tweak any ancillary resources (networking, as the primary example). As an example of the latter statement, consider Zoom’s recent partnership with Oracle Cloud. Since the beginning of COVID-19, demand for Zoom has rocketed into the hundreds of millions of users. Service degradation was inevitable. Zoom needed help and turning to Oracle helped it save what we estimate to be over 80% on its cloud networking costs, while achieving necessary failover and business continuity requirements. But speaking to our assertion that IT has to figure out how cloud resources are allocated, the answer isn’t always “off premises.” If you’re archiving core applications on-site, and even with legacy tools, you can probably keep operating that way. Financially and otherwise, this may still be the wisest choice.

Optimize Cloud Services. Businesses adopted a lot of cloud services between March and June of this year, often without realizing it as staff scrambled to work from home (shadow IT, anyone?). That created a situation ripe for optimization. Here are our top recommendations for saving money on cloud spend:

• Check bills for duplicate resources and eliminate any that are doing the same job (if doing so won’t impact workflows).
• Rationalize, and potentially turn off, idle services.
• Right-size resources. In other words, understand how the cloud environment will change as the organization grows or shrinks. Pro Tip: Have a contingency plan and a backup vendor in case usage doubles or triples. The goal isn’t to wholesale migrate all your services to a new vendor, but to be able to add overflow or additional computing and services that may be more cost-efficient or agile onto another vendor.
• Review discounts to make sure they are actually showing up on the bill. Cloud pricing is almost always accurate but providers do seem to have issues getting the agreed-upon discounts right. 
• Look at workload times. Turn off workloads when employees aren’t using them or at least turn them down during non-peak times.
• Assess expiration dates. Which cloud resources have an expiration date and which don’t? Find out whether any cloud platforms are used for testing or development. Wherever it makes sense, ask cloud providers to remove expiration dates. 

Ensure Project Governance. Don’t just bring in more cloud resources on a whim. This will create more mess. Instead, take a step back. You want to do right by the organization, avoiding waste rather than adding to it. The goal is to “measure twice, cut once.” Start by tagging and categorizing all existing cloud services, tracking both technical details as well as relevant business categories based on the general ledger and project management solutions. Tagging will enable essential tracking capabilities, and we explore this idea in greater depth below. Then assign expiration dates and vendor commitments – this is also where having a cloud boss comes in handy. After that, conduct a thorough review before launching any new cloud service into production mode. Turn off all test platforms so the organization does not keep paying for them. 

Tag Categories. This practice is vital to cloud expense management best practices. How well the organization tags and categorizes cloud services plays directly into the efficacy and clarity of IT spending. IT needs to know why things happen in the cloud environment, and that won’t be apparent without tagging.

Here are the areas Amalgam Insights has identified as the most useful for tagging and categorizing:

• Cross-charging: Link all cloud spending to the general ledger.
• Project ownership: Every project and resource should have an owner and be assigned to that person. This works out most optimally if that person holds some level of IT responsibility with the business. Be sure to link this information to the human resources system, too.
• Service priority: Make sure all cloud platforms used for testing and production are identified and have the appropriate service prioritization in place.
• Region: Follow all cloud governance risk management best practices for every geography in which the organization operates. You don’t want to breach any compliance requirements.

Study Contractual Commitments. There are six main buckets to review for opportunities to save money on cloud expenses:

1. Time commitments: Cloud vendors often extend more discounts or more flexible terms to organizations that agree to use their services for multiple years.
2. Payment terms: Will paying upfront or over time serve the best interests of the business? It may be time to negotiate some flexibility depending upon the answer.
3. Potential growth or reduction: Build a number of scenarios based on different expectations; for example, operational usage may stay the same but software development or research teams may need to add machine learning workloads. That will affect pricing. Make contractual agreements based on those changes.
4. Potential investment in apps: What cloud usage is projected for the new apps being created? What data will they create and what services will they need to access? Although developers cannot fully predict usage patterns, the business needs to have a basic idea of potential cloud cost impacts and how app demand will change cloud costs.
5. Regional concerns:  Figure out which regions need most access to the cloud, as regional pricing for services can vary significantly, leading to potential arbitrage opportunities.
6. Discounts: As discussed already, cloud vendors often get the pricing right yet omit the discounts or tiering changes. Make sure the organization gets the agreed-upon concessions.

Conclusion: Recommendations for the Future

Think about managing cloud expenses, especially during COVID-19, as doing your part to act as a steward of the business. As we’ve said before, every $100,000-$200,000 in IT expenses saved equates to a job saved or reinstated. When it comes to the cloud side of the house, introducing automation and reducing total cost of ownership are two additional ways to achieve that goal. Remember, cloud itself doesn’t just represent a cost-cutting measure compared to on-premises data centers, it’s also a tool that saves labor and provides for ongoing business agility and access to services that are more resilient to technical debt. The current economic climate is tough. People have a lot less time (and patience) for activities such as setup, administration, business continuity/disaster recovery, upgrades and performance tuning. Automate as many of these tasks as possible. Sure, that might mean opting for a more expensive cloud that comes with better Key Performance Indicators and Service Level Agreements. Incrementally, though, this will provide more value than a cheaper counterpart.

Alongside automation and the Total Cost of Ownership, don’t overlook the benefits of data and application development. As cloud vendors show their reluctance to hedge on discounts or payment terms, companies with skills in writing more optimized code and supporting better data management will have advantages in optimizing and cleaning up the cloud environment. 

Above all, you don’t have to do all this alone. There are a number of vendors Amalgam Insights recommends that specialize in cloud expense management. Here they are, in alphabetical order:

• Apptio Cloudability
• BMC
• Calero-MDSL
• CloudCheckr
• CloudHealth by VMware
• Flexera
• MobiChord
• Snow Software
• Tangoe
• Upland Software
• vCom

Keep in mind, each vendor takes different approaches and has different areas of strength. We recommend investigating each one to see how it fits your environment and needs. If you need unbiased help assessing the options, call on Amalgam Insights. 

***

If you are seeking outside guidance and a deeper dive on your IT environment, Amalgam Insights is here to help. Click here to schedule a consultation.

Join us at TEM Expo, currently available on-demand until August 13 at no cost, to learn more about how to prepare for COVID IT and take immediate action to cut costs. In particular, check out sessions by Robert Lee Harris and Corey Quinn on managing cloud costs and avoiding the biggest mistakes that cloud vendors won’t tell you about.

• 

• 

• 

And if you’d like to learn more about this topic now, please watch our webinar.

Key Stakeholders: CIO, CFO, Chief Digital Officer, Chief Technology Officer, Chief Mobility Officer, Mobility Directors and Managers, Procurement Directors and Managers, Accounting Directors and Managers

On July 15, 2020, Tangoe announced that Chairman Dave Hansen was appointed as the interim CEO of the company, replacing Bob Irwin, who had been the CEO for the past three years. Amalgam Insights analyzes this change in terms of what Bob Irwin accomplished at Tangoe, what this change means for Tangoe as a company, Tangoe’s customers, and the Technology Expense Management market at large.

Bob Irwin was brought into Tangoe in June of 2017 when private investment firm Marlin Equity Partners completed the acquisition of Asentinel. Irwin replaced Jim Foy, who had a long history managing technology companies and served as a bridge between Founder Al Subbloie and Irwin. Irwin came into Tangoe with a record of success in sales and management at Sterling Commerce, TDCI, and EMS Software, all of which managed complex processes associated with suppliers, supply chains, and resource management. At the time, Tangoe faced the challenges of integrating functionalities from over 20 platforms into a more manageable portfolio, an employee count that could not be supported by Tangoe’s existing revenue, and financial challenges resulting from a history of improperly recognizing earnings as a public company.

The highlights of Irwin’s tenure were in the acquisition of MOBI and the focus on customer service and retention. Tangoe’s acquisition of MOBI in December 2018 followed an intense bidding war for the managed mobility services provider and resulted in an upgrade in Tangoe’s ability to execute on managed mobility services, the ability to consolidate mobility operations in Indianapolis, and an upgrade to Tangoe’s process automation capabilities that have since been integrated into Tangoe’s overall roadmap. In addition, Tangoe’s focus on customer retention during this time allowed Tangoe to at least partially stem the bleeding that allowed competitors to poach Tangoe accounts.

Over his three year tenure, Irwin headed a product consolidation to move the majority of Tangoe’s customers to one of three platforms: Tangoe Fixed (based on the Asentinel acquisition), Tangoe Mobile (based on the MOBI acquisition) and Tangoe Rivermine to support customers on this highly customized platform. This consolidation was choppy at times, as it was originally positioned as the development of a single platform, Tangoe Atlas, which was then changed in mid-stream to the current three-pronged strategy that exists today.

Irwin also reduced Tangoe headcount to a more manageable level that was consistent with Tangoe’s estimated $200 million+ annual revenue rather than a staffing that had been more suitable for a company twice its size. At the same time, Irwin worked on an internal culture that celebrated employee success and included public adulation across email, social media, videos, podcasts, and other customer-facing communications.

However, Tangoe still faced a number of challenges during Irwin’s management. As the market leader in Technology Expense Management with approximately $40 billion under management, Tangoe did not successfully grow at a time when its smaller competitors were regularly growing 20% or more per year. From a practical perspective, Amalgam Insights saw that much of the growth of Tangoe’s biggest competitors, which were between 5-25% of Tangoe’s size from a spend management perspective, came from acquiring Tangoe customers rather than expanding the breadth of the market. Why was this the case?

Amalgam Insights has long taken the stance that TEM is most accurately an acronym for Technology Expense Management and best suited to manage the $1.6 trillion market associated with IT subscriptions (landline telecom and network, mobility, Infrastructure as a Service, Software as a Service, and related connectivity and public cloud subscriptions). However, even at a time when the $200 billion public cloud market was growing faster than the $1.3 trillion+ telecom market, TEM providers were slow to support the cloud.

A second challenge for Tangoe was that it held massive amounts of spend under management as well as CIO relationships, but lacked the products to take advantage of those strategic relationships. Tangoe’s move to cloud expense management was a good start, albeit somewhat belated. And Tangoe’s move to create the Tangoe for Apple solution for fully managing i-Everythings was also a good move.

But Tangoe had the opportunity (and still does) to support IT planning, budgeting, and forecasting to take on vendors like Apptio, ServiceNow, Upland Software, Digital Fuel, and Nicus as well as supporting closer relationships with the likes of Dell, HPE, Cisco, and VMware in supporting multi-vendor and comparative sourcing or to create more customer-friendly leasing and subscription options. The latter suggestion is increasingly viable today as Cisco provides Catalyst and its DNA on a subscription basis and HPE Greenlake will cover all of HPE’s portfolio (including virtual machines, Nimble-based storage, and Aruba networking).

Amalgam Insights posits that there may be an additional challenge associated with the sales culture, where the aggressive product-based sales and marketing culture that built Tangoe was largely replaced as Tangoe went private and brought in a group of experienced solutions-based executives. To some extent, Amalgam Insights believes this challenge is related to the prior product development challenge, as Tangoe still lacks the breadth of portfolio to support the executive-focused enterprise solution selling approach that it both has the expertise and relationships to execute upon.

In theory, Tangoe could also acquire additional solutions to fill out its portfolio of operational and financial capabilities, but the relative lack of acquisition activity outside of MOBI seems to indicate Tangoe’s unwillingness to take on additional acquisitions after its lengthy streak of purchases over the past decade (including Traq Wireless, ISG, Internoded, Telwares, Profitline, HCL (Control Point Solutions), Symphony, Anomalous Networks, ttMobiles, Rivermine, Vodafone Global, Asentinel, and MOBI).

So, what does this all mean for Tangoe, Tangoe’s customers, and the rest of the market? Let’s break it down.

First, this isn’t Dave Hansen’s first run at being an interim CEO, as he served as the interim CEO of OnX Enterprise Solutions in 2016 after the prior CEO retired. In that run, Hansen held the role for roughly three months before turning over the reins (reigns?) to veteran tech executive Tom Signorello. Amalgam Insights would expect that Hansen would serve a similar placeholder role here for the next several months, similar to Jim Foy’s tenure, as Tangoe seeks a permanent CEO.

However, given Hansen’s previous experience with CA Technologies, BMC Numara, and Dell, we wonder if Hansen might be able to build some relationships more directly in his role as CEO that would be accretive to Tangoe. For example, Tangoe could use Numara-like service and asset management capabilities to help Tangoe become a more holistic Management-in-a-box or Management-as-a-service offering for IT managers who want to align technology management to business demand and cost management.

[Analyst’s Note: When I first wrote about the potential for Information Technology Expense Management back in my Aberdeen days in 2009, I thought that the telecom expense management players would be best positioned to support a future of IT as a Service and the breadth of IT expenses that would emerge as what we then called SoMoClo (Social, Mobile, Cloud)  evolved into a dominant platform. Although that platform has matured, financial and accounting management across collaboration, APIs, mobile devices and services, cloud infrastructure, and cloud-based software is still largely a siloed mess for the CIO, CTO, Chief Architect, or IT strategist to traverse.]

Although this would be interesting and in line with a growth-oriented company, Amalgam expects that Hansen’s top goal will be to maintain Tangoe’s existing structure and operations and to focus on current customers rather than aggressively pursue opportunities for improvement or growth. This should be good news for Tangoe customers seeking stability and directional progress towards a more standardized Tangoe and the completion of short-term projects.

For the rest of the Technology Expense Management industry across telecom expense, cloud cost, and enterprise mobility management markets, be aware that you likely have several more months to execute on the “Tangoe playbook” currently being used to sell against them before that book starts to change. At the same time, this is not a time for vendors to measure up against Tangoe, but rather an opportunity to evolve into the aspects of TEM where the vendor provides best-in-breed capabilities.

For instance, just as a partial sampling of solutions:

• AMI Strategies has developed an smart AI-powered invoice processing engine
• Asignet has its deep automation capabilities associated with its Wayfast platform
• Calero-MDSL has strong data services and asset management capabilities
• Cass has a variety of spend management solutions that should be bundled
• CloudCheckr has its API-driven CMx Platform for managing cloud services
• CloudHealth by VMWare has to be considered in context of the larger picture of vRealize Operations Cloud and Tanzu Portfolio
• GoExceed has superior process and machine learning capabilities for cellular management
• MobiChord is built on the ServiceNow platform
• Upland Cimpl is part of Upland’s broad portfolio of software solutions
• vMOX has its intellectual property to support its cost optimization approach
• Vision Wireless has its focus on enterprise mobility, and
• WidePoint has its government and security backgrounds

just to name a few quick examples of some of the solutions Amalgam Insights has recommended over the past month. Each vendor is different enough in this space to find greenfield opportunities in the technology expense management space.

Overall, Amalgam Insights believes that Irwin’s tenure at Tangoe will be remembered as a time of significant operational consolidation and optimization at a time when the company needed to create stability after a roller-coaster and alphabet soup filled era of growth, M&A, IPO, and SEC financial issues. For the next CEO, Amalgam Insights expects that there will need to be an emphasis on sales and external outreach that has not been seen in recent times. But for now, Tangoe remains the sleeping tiger of the TEM industry and Irwin leaves having righted the ship for the next captain.

If you’re interested in more information on the Technology Expense Management industry, please visit our free 15-session event, Technology Expense Management Expo, which is now available on-demand and at no cost until August 13, 2020.

Key Stakeholders: Chief Information Officers, Chief Financial Officers, IT Finance Directors and Managers, IT Procurement Directors and Managers, Accounting Directors and Managers, Telecom Expense Directors and Managers, IT Operations, IT Strategy, FinOps Directors and Managers

Why It Matters: SaaS expenses add up fast, especially when employees use more than one app for the same purpose. In the time of COVID-19, it’s critical to pare down costs and save jobs.

Top Takeaway: In cash-strapped environments, Software as a Service is an area of spend that is ripe for review based on employee flux, new application needs, and a round of quarantine-induced Shadow IT.

Managing IT in the Time of Corona calls for inquiry into a number of areas. So far, we’ve talked about the six overall stages of COVID IT management, ways to adjust telecom and network resources for the rest of 2020 (and beyond), and controlling wireless expenses as 40% of staff or more work from home. The next category to assess? Software as a Service, or SaaS. Digging into this facet of the technology environment will uncover which apps employees use so the enterprise can make some crucial decisions: what stays, what goes, what needs new contract terms. This action is essential as the world heads toward a recession of unknown length and impact. IT, financing and procurement must do their part now to help the business batten down the hatches. Analyzing the current state of SaaS, and then streamlining it, will address this need.

No One Wants to Lose

Before you start, understand that employees will want to cling to their apps – and SaaS vendors will want to keep your organization as a customer. The IT team and its colleagues will have to walk a fine line between keeping staff happy and protecting the business’s bottom line. The reason why boils down to one reality – that people are perhaps even more attached to their apps than to their mobile devices. That’s because apps serve specific purposes and solve particular problems.

At the same time, the last thing SaaS vendors want, or need, right now is to lose clients. COVID-19 already has given rise to the highest jobless rate in over 80 years. Companies throughout the United States are motivated to retain as many customers as possible and that goes for the SaaS world as well. In fact, this segment of technology well could be the most relationship-dependent. Again, apps are personal and SaaS profitability is dependent on medium-to-long term relationships. SaaS companies need time to prove the indispensability of their software and earn the long-term contracts and relationships that lead to profit. This means that SaaS companies have incentives to work with enterprises seeking to organize and reduce costs.

Don’t Fear ‘DISRUPT’ion
Before deciding which apps make sense to keep, and which need to hit the highway, “DISRUPT” your environment with the following assessment:

Discover new apps. Find out what’s residing in the enterprise and whether it is IT-approved.
Inventory all licenses. Understand what the organization is paying for each month, and evaluate whether the licenses match up with employee numbers and roles.
Spend and usage visibility. Does the IT team have this level of insight? If not, who does?
Recycle licenses. Where can IT re-allocate use of a license instead of paying for an additional one?
Unite SaaS categories. Simply put, consolidate vendors. Many apps serve a similar purpose. Choose the best one for the organization and eliminate the rest.
Prune unused services. On a similar note, get rid of any SaaS employees do not use. Why pay something for nothing?
Training and enablement. Educate employees so they know how to make the most of the SaaS for which the company is paying. This will ensure the organization and its people use the app to its full advantage.

The “DISRUPT” phase of a SaaS assessment may take several months to complete. But it’s just the first step in a series of actions IT needs to take to better prepare the organization for predicted economic headwinds.

Follow These Steps
The steps below provide a mix of recommendations for reducing what the organization spends on SaaS, and for (re)negotiating with vendors. After you benchmark your spend, take the rest of these steps in the order that makes the most sense for your business leading up to the final negotiation process.

Step 1: Benchmark March and April’s Spend
Next comes the much-discussed benchmarking phase we’ve been driving home for the past couple months. As we note in previous blogs on COVID IT, benchmarking March and April 2020 usage and spend is a must. Glossing over, or skipping this step, would prove fatal to effective IT expense management in the face of a looming recession. You do not want to optimize on pre-COVID-19 assumptions. The sooner IT can pinpoint how COVID has affected the organization, the sooner it can react – all based on data.

Pro tip: Take advantage of free offers. For instance, G2 Track is providing a 90 day free trial of its software expense platform. 

Step 2: Prepare for Tough Negotiations
Identify the software vendors with which the organization spends the most money. If your organization is tight for cash, take the following steps. (Note: Amalgam Insights considers these to be extreme measures appropriate only in a pandemic recession or when the survival of the business is at stake.) For each of those providers, choose a “credible threat.” In other words, be ready to move to an app that does the same job as the current one, and be prepared to use that readiness in negotiations. Also, back up all data residing in the current software. Do all this in case it becomes necessary to walk away from negotiations because the vendor won’t work with you. And then make your demand or request, which may include postponed payments or a payment holiday. As a non-software example, consider how Starbucks sought a rent “vacation” for 12 months.

Step 3: Escalate Negotiations in Your Largest SaaS Vendors to the Executive Level
Here, teaming with your CFO on outreach to SaaS vendors’ top leaders should prove really helpful. The CFO office should send a letter to all vendors stating that there is a formal effort to reduce costs and providing guidance both on the current company situation and need for financial relief. Start with the sales and accounts teams so as not to damage good relationships, but be prepared to escalate the conversation. Once the vendor sees that executives are actively reviewing spend for all major accounts, negotiations often get easier. Citing circumstances including COVID-19, the probable recession and high unemployment may help, but credible backing and financial documentation from the CFO cements the seriousness of the requests at hand.

Throughout all the activity, maintain consistency in requests among vendors. The idea is not to play favorites or be a bully. To avoid that, standardize the wording on all negotiation documents and emphasize how much the organization values partnership with its SaaS vendors.

Step 4: Delay, Discount, Deny
Once SaaS providers finally have your business – which usually comes after a prolonged period of time – they know their best interest lies in keeping you as a customer. And in these tough times, these vendors often are willing to make concessions in the interest of long-term relationships. To get the outcome you want for the organization, start with a win-win approach. Offer various carrots such as lengthening the contract, serving as a customer reference, introducing their account team to other people in your business who could use the product, and so on. Ideally your organization and the SaaS vendor will be able to create a tighter relationship that provides quid pro quo benefits.

However, if the vendor will not play ball, it may be time to prove how far you’re willing to go. First off, you may have to show the vendor your books and prove why the organization is asking for new terms. If that doesn’t do the trick, figure out how to push back. Potential tactics include:
• Delaying payments and audits
• Discounting reduced payments
• Disputing excess capacity and unknown charges

Make sure the organization’s usage aligns correctly to the terms of the deal with the SaaS vendor.

Step 5: Rein in Employees
COVID-19 and its subsequent economic effects have made one thing blatantly clear: the SaaS party is over. In these critical times, the business must pare down what it pays for and enforce that change. No longer may employees choose their own separate SaaS vendors. And no longer may they may use 10 apps that does the work of one. Money and jobs are at stake.

So, to rein in employees, categorize apps by whether they are a priority, a luxury or a vanity.

Priority Apps: These apps are mission-critical, show well-articulated value and are widely adopted across the organization.
Luxury Apps: These apps tend to facilitate work, but they have inconsistent value and employees struggle to adopt them.
Vanity Apps: These apps do not contribute to work outcomes, and defining their value proves difficult. Staff only use them in niche instances.

Once all apps are categorized, it becomes easy to whittle down the number and type. Staff will want to push back but if the organization is footing the bill, its best interest is the priority.

Step 6: Think Differently
The key question to ask is, what can IT, finance and procurement do to minimize the organization’s risk and manage cash well? Before stepping into the (figurative) negotiation room, find the answer by analyzing the areas outlined below:
• Reconsider spend and license minimums (the organization may actually have a chance to save money by using an app in a different way, for instance)
• Enact scheduled audits and peak/valley exceptions• Shift from per-user to use case or revenue share (this would eliminate per-user scaling, which adds up quickly)
• Look for leeway (find out if the SaaS vendor has any flexibility on its payment terms, or whether it offers financing. Multiple large technology companies desperate to keep users in the time of Corona are putting up billions of dollars in financing.)
• Include COVID-19-specific clauses (act-of-god type of verbiage can provide a way out if no other path comes of negotiations.)

Conclusion
Together, some or all of these tools and strategies should result in positive change as the organization trims its SaaS expenses. With any luck, negotiations will go smoothly and all parties will exit feeling better about the long-term outlook. We’ve presented the worst-case scenario options in hopes they will lie fallow, but being prepared is better than being surprised.

***If you are seeking outside guidance and a deeper dive on your IT environment, Amalgam Insights is here to help. Click here to schedule a consultation.

***Join us at TEM Expo on July 14 to learn more about how to prepare for COVID IT and take immediate action to cut costs.

***And if you’d like to learn more about this topic now, please watch our webinar.

Key Stakeholders: Chief Information Officers, Chief Financial Officers, IT Finance Directors and Managers, IT Procurement Directors and Managers, Accounting Directors and Managers, Telecom Expense Directors and Managers, IT Operations, IT Strategy

Why It Matters: Whipping the wireless environment into shape will showcase the IT department’s leadership as a steward of the business, and contribute to the organization’s larger goal of saving or reinstating jobs.

Top Takeaway: Optimizing mobile assets and services will ensure the organization is paying only for what it should, while making sure employees have the resources they need to do their jobs well.

Even before the coronavirus struck, IT professionals faced a mobility management dilemma: how to determine whether smartphones, tablets and other wireless devices would serve as primary or secondary work tools.

The quandary arose as the iPhone, the world’s flagship smartphone (BlackBerry notwithstanding), hovered on the brink of the teenage years – the iPhone turns 13 in 2020. Since its introduction in 2007, the iPhone led the way in shifting the enterprise from a landlocked entity to a fluid one not restricted by physical boundaries. Work from outside the office grew more common, which paved the way for employees to bring their own devices into the business. These devices further complicated IT’s security, expense, optimization and other mobility management duties. These mobile device “tween” years, if you will, have not been easy.

Then came COVID-19.

March and April of this year looked like no other time in modern history. From an IT perspective alone, organizations around the world rushed to support remote work as the need for people to work from home became obvious. IT threw many of these efforts together in a frenetic, cobbled-together fashion. Cloud, SaaS and, of course, mobility, came to the rescue, but at a price. Now, in the wake of the COVID-19 work-from-home (WFH) frenzy, IT experts are finding that employees have adopted mobile computing resources that might not meet standards, and that have inflated the organization’s expenses. Managing the awkward tween phase of mobility just got harder. And considering that most enterprises say they will allow or require remote work for the foreseeable future, IT has a long-term challenge on its hands.

This blog, the third in Amalgam Insights’ series on managing COVID IT, gives IT, accounting, procurement and other professionals involved in expense management, specific steps that will transform disarray into order. (For more fun with the tween theme twist, watch our webinar on this topic.)  

Step 1: Benchmark March and April’s IT Usage, Activity

Amalgam Insights’ chief recommendation for getting the IT department back on track is to benchmark the past quarter of IT usage and activity now that the crush to move staff to remote work has subsided. (With any luck, organizations have advanced past the “survivor” phase of IT.) We discuss in detail here the what and why of benchmarking March and April spend now. If you haven’t undergone this exercise already, time is of the essence. Not benchmarking at all means the IT department will optimize on pre-COVID-19 assumptions. The business will overpay for months or years to come by assuming that the challenges of March and April 2020 represent a “normal” IT environment.

Benchmarking is vital. According to Amalgam Insights’ IT Rule of 30, any unmanaged IT spend averages 30% in waste. This past March and April, largely unbeknownst to IT, employees bought the tools they needed to better work from home (think consumer-grade apps, services and devices). Cleaning up the IT environment, including all those shadow purchases, allows leaders to reclaim costs – and more.

For example, assessing the new normal for mobility (and, of course, other parts of IT including networking, cloud, SaaS and more) also will highlight where to cut future expenses and which contracts to renegotiate. The key lies in knowing what you are cutting before proceeding. The last thing you want is to inadvertently chop something that actually is necessary.

Here’s a pro tip for getting management of wireless assets and services back in line: Take advantage of the free audits some mobility expense management providers are offering. (MobiChord, Upland Software, Tangoe, and vMox are a few we know of.) This level of expert guidance likely will result in significant savings. Furthermore, it should give the IT department leverage for contract renegotiations.

Perhaps most importantly, though, benchmarking March and April’s spend can help the IT department save or reinstate jobs across the organization. That is the overarching goal Amalgam Insights aims to drive home. IT is ideally positioned to support the business in efforts to keep or bring back jobs. Every $100,000-$200,000 in eliminated IT waste translates into another role, and that’s critical as unemployment claims in the United States have climbed.

Step 2: Identify Anomalies, Overages, Inconsistent Usage and Access

A high-functioning mobility estate is key to fostering a productive, smooth remote work environment. Achieving this means, in part, making sure employees have the right devices (type, brand, model and operating system) and services (authorized accesses to corporate files and apps, international roaming and unlimited data if required, etc.), and that they are using them. Understand that IT may end up adding or subtracting assets and services, depending on what comes up in the discovery process. The idea is to serve as a steward to the business and ensure it provides and pays for the mobility it should, and only that.

Step 3: Uncover the Zombies, Lazy Slobs and Misfits

An important step in fixing wireless inefficiencies starts with finding the obvious slackers: the zombie devices, the ones with bloat and the mismatches.

Zombies: These smartphones, tablets and laptops could be hiding in someone’s drawer or somewhere else at headquarters where no one is working right now. If the device has a cellular or hotspot connection and a data plan, the enterprise is still footing the bill. Why pay for something no one is using?

Slobs: The service plans on these devices have a glut of features, such as too much data or personal hotspot capabilities. The organization doesn’t need to give every employee the same extras. Trim down who gets what by role and responsibilities.

Misfits: These devices and their services have limitations that impede employee productivity. A limited data plan, paired with an equally constrained phone, can make a staff member’s video conferencing choppy or even inaccessible. The device may work best for email and other lighter apps. In other words, look for mismatches among devices, services, plans and their users to keep cleaning up and optimizing the wireless environment.

Step 4: Check With Your Expense Management Counterparts

We’ve all gotten past the literal survival stage of COVID IT. Employees throughout the enterprise have settled into routines. That makes now the time to rein in wireless costs by following all the aforementioned steps, and by going even further. Next, do some investigation. Check in with the people who handle various expense management and procurement tasks for the business to see where IT costs might be popping up. These are other areas where shadow COVID IT could be making an appearance.

Assess whether corporate should continue to fund these expenses and stay alert for opportunities to support staff with more of the wireless equipment or services they need to do their jobs well. For instance, does someone need a better webcam for more professional video conferencing? Not all expenses are bad or unnecessary. Digging deeper with expense management counterparts will help define what is and is not IT’s and the enterprise’s to cover – and what is.

Step 5: Ok, Sometimes You Legally Have To

To that last point, get clear on which wireless devices and services the organization legally must pay for. The IT department does not want to put the enterprise on the wrong side of expense-reimbursement lawsuits. The state of California, as one example, decided in 2014 that companies have to pay for any reasonable costs. Know the rules governing your enterprise before you push back on employee requests.

Step 6: Prep for Contract Negotiations

The next important aspect of improving the wireless environment lies in renegotiating contracts, as that makes sense. But in the time of COVID IT, bargaining with vendors calls for much more than just agreeing to discounts. To do this, start by examining usage categories. Look for large increases where IT may be able to cut costs. These opportunities may not show up in the obvious places, such as eliminating unlimited data.

Figure out how (or whether) switching up products, services and plans also might reduce expenses. Employees might not be thrilled about adapting to a new brand, but going with Google Pixel over Samsung, as one example, could prove worthwhile if usability, data transfer, and security concerns can be worked out. Work through the options with the account rep. Above all, do not miss this chance to renegotiate and make a significant contribution to the enterprise’s bottom line.

Step 7: Look at Wired vs. Wireless Tradeoffs

Employees don’t care about the networks that connect them to the enterprise as long as everything works. IT, on the other hand, cares, especially when cost matters. For instance, determine whether landline access coupled with Wi-Fi might offer better pricing than cellular services without sacrificing service quality. In addition, look for – and get rid of – duplicate services, whatever they are.  

Step 8: Sometimes You Have to Lose the Battle to Win the War

Again, tradeoffs can create prime opportunities for financial savings. In that vein, consider that the SaaS or cloud bill may have to grow even as the mobility bill shrinks. Rather than trying to squeeze costs in every IT category, think about where tradeoffs might turn into gains. In this current environment, it is more realistic to drop the entire IT bill by 10%from last year rather than by trying to trim each category by 5-10%.

Conclusion

Applying these eight steps to the enterprise’s mobile environment will position IT to work more efficeintly over the rest of 2020 and beyond. Tightening wireless expenses efficiently with an eye toward mantaining work productivity will contribute to the larger, imperative goal of saving or bringing back jobs in the time of Corona. IT can be, and is, far more than a commodity within the business – it’s arguably one of the key departments that can steer positive change.

***

If you are seeking outside guidance and a deeper dive on your IT environment, Amalgam Insights is here to help. Click here to schedule a consultation.

Join us at TEM Expo on July 14 to learn more about how to prepare for COVID IT and take immediate action to cut costs.

And if you’d like to learn more about this topic now, please watch our webinar.

Author: Hyoun Park

Key Stakeholders: Chief Information Officers, Chief Financial Officers, IT Finance Directors and Managers, IT Procurement Directors and Managers, Accounting Directors and Managers, Telecom Expense Directors and Managers, IT Operations, IT Strategy, FinOps Directors and Managers

Why It Matters: Consumer IT, cybersecurity issues, and massive unexpected IT costs can create a perfect storm that could overwhelm IT – unless experts take the time now to understand what they’re up against and learn how to transform chaos into calm.

Top Takeaway: By preparing for the six stages of COVID IT, companies will be prepared for the challenges of supporting a newly transformed IT where over 40% of employees work from home and 30% of unmanaged spend is wasted.

---

COVID-19 has irrevocably changed the way IT does business. Many employees stand to remain in work-from-home models for a long time to come as organizations seek to mitigate disease transmission. In some ways, that shift bodes well for the environment and for company overhead. In others, it has caused chaos and stress. For example, this shift has left the IT department, in particular, scrambling: Cybersecurity has grown more difficult to ensure, with workers relying on personal laptops, tablets and smartphones, all over home networks; use of apps and oversight of company data has become harder to track as employees turn to consumer-grade file sharing and video conferencing to do their jobs, further exposing the enterprise to potential breaches; and, finally, hidden and unexpected expenses are hitting the IT department in the aftermath of the sudden move to WFH (Work From Home).

Each of these factors is creating a perfect storm that could overwhelm IT – unless experts take the time now to understand what they’re up against and learn how to transform chaos into calm. Achieving that starts with knowing the six stages of COVID IT and then navigating them with a confident action plan.

Before exploring the six stages of COVID IT, Amalgam Insights wants to emphasize that the IT bills incurred during the COVID-fueled work-from-home activity reflect the new normal. They also highlight areas IT must evaluate for excess spending. This will increase in relevance as organizations prepare for a likely economic downturn and for future global events that will call for non-traditional approaches to work.

As such, assessing where your enterprise falls in the following six stages not only will show where you are now, but where you need to go. Keep in mind, IT cannot tackle all of these stages at once, nor is that desirable.

This process is one we’ve built with sequencing in mind – IT cannot reach Stage 4 without analyzing and addressing Stage 1, for example. Sticking to the steps in order supports IT in its quest to serve as a steward to the business, helping it to shed its outdated role as a commodity within the organization, and, instead, bring value. The following figure describes our recommended timeline as a general rule of thumb. Note that we are coming up on the 3 month period for Stage 3 and 4.

Stage 1: Survivor: Shadow IT Edition

Estimated time required: 2-4 weeks

Most organizations exited this stage in mid- to late April. They had spent much of March and even early April outfitting employees to work remotely, mostly by deploying cloud resources cobbled together in a matter of days. Everyone, including IT, fumbled just trying to survive. That’s okay. Few entities had plans in place that invited perfect governance and compliance in case of something like a pandemic. Because of that, the top priority was to keep employees connected and able to perform their tasks from home, regardless of the equipment or network enabling those capabilities.

At the same time, employees themselves were adjusting to strange new circumstances. Suddenly their spouses/partners, kids, other family members and neighbors were all at home. In addition to still having to attend to work, this meant dealing with distractions in the form of constant interruptions, child care, the need to serve as school teacher and more. On top of that, employees found themselves in the midst of continuous personal and professional change. Could they keep using Zoom or not? Were they supposed to wear masks outside the house or not? Could they even go outside? All this stress compounded whatever other life experiences they may have been undergoing, from divorce or illness to the fear of losing their livelihoods. The last thing on almost everyone’s mind – and this applied to IT staff as well – was worrying about protecting and securing corporate assets, or worrying about IT expenses.

Again, the hope is that by now, organizations have left this stage behind. There may be some areas to clean up, though, and this blog provides the guidance for analyzing where that may be the case.

Stage 2: Secure Your Business

Estimated time required for initial triage: 2-4 weeks

Chances are, most enterprises remain in this phase. Recall that employees across the board still are confronting the myriad stresses caused by uncertainty around COVID-19. That puts them in a more vulnerable position to inadvertently expose the organization to bad actors. For instance, a hacker may call pretending to be someone from IT and request a password. A worker more focused on day-to-day survival than on corporate security may share that information, thinking nothing of it. This form of social engineering makes way for a serious breach. In fact, hackers have managed to turn COVID-19 fraud into a profitable endeavor by targeting unsuspecting consumers.  As of June 4, the U.S. Federal Trade Commission had fielded more than 64,000 complaints totaling more than $46 million in losses. The numbers only represent the consumer side; the possibility for losses in the corporate world go much, much higher due not only to social engineering, but also to phishing, ransomware and malware. Amalgam Insights recommends educating and testing employees, as well as implementing the tightest enterprise-grade cybersecurity measures feasible that can be supported on consumer-grade networks with an eye towards a zero-trust approach in our consumerized IT world.

Stage 3: Audit Your Environment

Estimated time required: 1-3 months

Next comes cleanup, or the need to audit all the technologies and services ordered and used since the beginning of COVID-19 (as well as everything else IT already was managing). This will indicate what is probable in terms of ongoing and future demand, and show where IT can trim or eliminate costs. To do this, pinpoint all the equipment, devices, applications and services procured and consumed. Then look where overages or absence of use occurred. Amalgam Insights recommends taking a focused approach across landline inventory, cloud services, and infrastructure that includes invoices, inventory, service orders, and virtual inventory.

Once the IT department has a clear bead on all of the above, experts then can compare activity to contracts. The results may reveal that it’s time to renegotiate terms with vendors. Once you have done that, be sure to keep the accounting and sourcing departments in the loop. Show the company how IT has positively impacted cash flow and governance – or, in other words, continued to add value to the organization.

This management is especially important because of the IT Rule of 30, Amalgam Insights’ rule that any unmanaged IT spend averages 30% in waste. Practically all shadow COVID IT spend in March and April was unmanaged. Clean your environment and reclaim your cash.

Stage 4: Train and Celebrate

Estimated time required: 1-3 months

With better and streamlined assets and services in place, and the corresponding financials that mirror that governance, use the next four to 12 weeks to train and celebrate employees. This may seem impractical amid COVID-19. Yet the people aspect of IT is vital.

First, gather the information gleaned from audits to identify current versus past usage. This applies to applications, devices and services. Record cost structure and the change in IT demands; this data will underscore decisions made by IT. Then, schedule time with company stakeholders. Amalgam Insights recommends those people include executives from finance and human resources, and the managers over the various lines of business. From there, IT should present on four main areas:

• Making everyone aware of the new normal and what that looks like: Discuss how remote work is contributing to greater productivity and allowing employees the flexibility to juggle heightened work and home responsibilities.
• Identifying best users and practices: Call out rock star employees who are not only embracing policies, but who may be going above and beyond to help the organization steer clear of security threats and unnecessary IT spending.
• Showing how IT is helping the organization maneuver financial and operational concerns: IT is now a supply chain for delivering digital services. Accordingly, share the outcomes of an IT-conducted SWOT analysis, as well as savings attained, renegotiated terms, removal of obsolete or underused technologies, and any other audit-related improvements.
• Describing the new and different use cases brought about by coronavirus-fueled IT deployments: Here, IT experts can talk about new processes that have saved time, money and protected the business, for example.

This meeting marks just the first of what should become regular touchpoints with leaders company-wide. After that, start working with HR and managers to train all employees about new and updated IT policies, processes and procedures. Get the HR unit to integrate the information into any and all onboarding and employee education and performance materials. This will prove crucial to awareness, adoption and adherence. It also will pave the way for executives to recognize and reward standout staff (and, conversely, continue to guide employees having trouble complying).

Notably, Amalgam Insights recommends that IT showcase as much as possible what it is doing to support and bolster the organization as everyone grapples with change. A global recession caused by the COVID-19 pandemic is poised to hit and last for an unknown amount of time. This makes IT’s business contributions more important than ever. Talk about what matters. Quantify what the department is doing by illustrating how IT boosts the enterprise’s bottom line. Now is the time for purposeful, meaningful, quantifiable and visible business contribution.

Stage 5: Standardize and Improve

Estimated time required: 3-6 months

As the organization settles into its new normal, IT will have the luxury of concentrating on strategic initiatives that supply even more value. Standardizing and improving the environment should take between 90 and 180 days. And the efforts will pay off.

To that point, look for redundancy. Amalgam Insights continues to see examples of enterprises that have purchased multiple versions of at least one application. On top of that, recently remote employees probably have received more than one device because IT didn’t know what that person already had – or not. Take advantage of the “standardize and improve” stage to consolidate services, devices and apps.

On a similar note, it’s also time to standardize the services rolled out to staff. The technologies that sustained in-office work will not be the same ones enabling remote employees. Remove unnecessary vendors and consolidate redundant services (and document all of this as the IT department continues to showcase its value). This includes re-negotiating contracts as needed. Investigate current payment terms, business continuity, disputes, and so on, because what may have been acceptable pre-COVID probably does not favor the organization now.

In other words, IT must do due diligence to prevent the carrier or vendor from doing something that would hurt the organization. For example, if the provider or vendor bills on an automated basis, consider pushing out payment terms or minimum payments. This gives the enterprise wiggle room in case of an emergency. Another opportunity is to jettison now-outdated minimum requirements. Seek out ways to secure annual renewals that don’t just provide discounts, but that also guarantee the company will have upgrade to technologies that maintain and support remote work for months or years to come.

Lastly, make sure all onboarding and training materials now contain updated policies for remote work. With at least 40% of staff now on the job from home, any leniency extended to previously remote employees no longer applies. IT must ensure rigorous security and spending standards.

Stage 6: Transform the Business

Estimated time required: 3-6 months

This final stage of COVID IT may appear to be a luxury at first. We assure you it is not. A significant percentage of CFOs say the pandemic has not stopped them from projects to automate, digitize and improve customer experiences, supply chains and, remote work. To the latter point, Amalgam Insights predicts 15% or more of all United States-based employees will retain permanent work-from-home status post-COVID, which more than doubles our previous work-from-home population. Therefore, IT must align its investments with the C-suite’s vision. This strategy bolsters the organization overall. But it also enhances IT’s role within the company. Amalgam Insights recommends using these opportunities to become, and do, far more than acting as an auditor or bill processor if you haven’t done so already. Offer expert advice, planning and assistance that facilitates crucial outcomes and, at the same time, highlights IT’s importance to the business.

Conclusion

IT may find it necessary to repeat one or more of the six stages of COVID IT stages as circumstances evolve or new ones come to light in an environment where the networking, IT and cloud environments fluctuate constantly.

If you are seeking outside guidance and a deeper dive on your environment, Amalgam Insights is here to help. Click here to schedule a consultation.

Join us at TEM Expo on July 14 to learn more about how to prepare for COVID IT and take immediate action to cut costs.

And if you’d like to learn more about this topic now, please watch our webinar on this topic.

Summary: Companies with 10 to 99 employees were significantly more likely to get their PPP loans accepted than their smaller 1-9 employee counterparts. Based on the US distribution of companies, it looks like $7 billion or more in small business loans ended up going to large 500+ employee enterprises. And the PPP program will likely be underfunded even in a second round, as it will take over $1 trillion to fully meet demand and banks are overwhelmed with the number of loans they need to process.

The United States has recently completed its first round of Paycheck Protection Program (PPP) loans. This program was theoretically designed to provide small and medium-sized businesses up to 500 employees with up to 2.5 months of payroll support. Additional stipulations within the program also allowed companies with over 500 employees to apply if they had franchise groups of under 500 employees, leading to headlines where large companies such as Ruth Chris’ Steak House and Potbelly were able to get these small business loans while other companies did not.

But was there a significant effect from large businesses entering the PPP program or was this a relatively minor problem? To figure this out, Amalgam Insights took a look at the current breakout of SMB companies in the United States to figure out what an optimal PPP program should have looked like vs. what actually happened.

As a starting point, we looked at the 2012 Census data for firms and employees and found the following breakdown. This analysis basically ignores the sole proprietorships with no employees because, quite frankly, I think those companies are going to be completely ignored and passed by in this loan process. Banks are already overwhelmed by trying to support companies with employees and I don’t see that changing any time soon. 

Category	Firms	Employees	% of SMBs	% of SMB Employees
Firms with 1 to 4 employees	3,705,275	6,139,463	61%	10%
Firms with 5 to 9 employees	1,060,250	6,974,591	18%	12%
Firms with 10 to 19 employees	644,842	8,656,182	11%	14%
Firms with 20 to 99 employees	532,391	20,922,960	9%	35%
Firms with 100 to 499 employees	88,586	17,173,728	1%	29%
Total	6,031,344	59,866,924	100%	100%

Nearly half of America’s workforce works for small businesses. We used the average payroll per employee as a starting point to calculate compensation, as smaller firms tend to spend less on payroll than larger firms. We then added a multiplier to acknowledge consultants and the overhead associated with payroll and multiplied by 2.5 months to estimate the payroll per employee that was requested. And then we compared this to the average loan sizes that the PPP provided at various loan tranches ranging from <$150,000 to > $2 million. When we put it together, our initial expectations looked like this for the $342 billion that ended up being disbursed:

Category	Expected Number of Loans	Expected Amount of loans
Firms with 1 to 9 employees	1,543,926	$ 70,997 million
Firms with 10 to 19 employees	208,915	$ 45,344 million
Firms with 20 to 99 employees	172,483	$ 119,309 million
Firms with 100 to 499 employees	28,700	$ 106,628 million

Compare that with the metrics that the Small Business Administration provided:

Size	Approved	Loan	Average Loan
<$150K	1229893	$  58,322 million	$ 47,420
>$150K-$350K	224061	$  50,926 million	$ 227,288
>$350K-$2M	181435	$ 137,816 million	$ 759,591
>$2M-$5M	21566	$ 64,315 million	$ 2,982,263
>$5M	4412	$ 30,898 million	$ 7,003,169

This isn’t a perfect matchup. The first few sets of loans match up well enough for the back-of-the-napkin estimate we’re looking for, but we need to match up the 100-499 employee group with the PPP loans a bit better to figure out what we’re looking for.
Based on business distributions, we’d guess that about 15% of the 100-499 companies are above 300 employees, so we’ll break that category up into 100-299 and 300-499 estimates, which looks like this. I wish I had better breakdowns from the government, but beggars can’t be choosers and I’m trying to figure out what’s happening now.

Category	Firms	Employees
Firms with 100 to 299 Employees	75,298	12,549,539
Firms with 300 to 499 Employees	13,288	4,624,189

When we compare the actual loans to what we would have expected from this basic model, we see the following:

Category	Number of Loans	Amount of Loans	% of expected loans	Delta of expected amount vs. actual amount
Firms with 1 to 9 employees	1,229,893	$ 70,997 million	82%	$12,676 million
Firms with 10 to 19 employees	224,061	$ 45,344 million	112%	-5,583 million
Firms with 20 to 99 employees	181,435	$119,309 million	116%	-18,508 million
Firms with 100 to 299 employees	21,566	$ 77,606 million	83%	13,291 million
Firms with 300 to 499 employees	4,412	$28,710 million	108%	-2,187 million

A few things are happening here. 

First, small firms with less than 10 employees are definitely not able to get their fair share in many states. Because they both have hundreds of thousands of additional applications and they are relatively small amounts, they go to the back of the line compared not only to the big businesses, but even their colleagues in the 20-100 employee space that ended up getting more than expected. Noted exceptions are the Plains (Kansas, Oklahoma, Iowa, Nebraska), Mountain West (North Dakota, South Dakota, Wyoming, Montana), and Northern New England (Maine, Vermont, and New Hampshire) states that processed loans per capita well above the rates of the rest of the country. For more details, check out the data for yourself. 

(Side note: Amalgam Insights estimates this PPP loan program is providing about $18,000 per employee in total, or $7,300 per employee-month. Just a metric to keep in mind as you compare this to other current bailout efforts in place.)

Second, it looks like the sweet spot for PPP loans is to be in that 20-99 employee space where you have enough resources to act quickly and can pull out the $500,000 to $1 million that lets you be taken seriously by your bank. Another aside is that this is what seems to have happened in the Western States of Arizona, Nevada, and California, where the average loan provided was above average, even considering cost of living, but each of these states processed less than 60% of loans per capita compared to the rest of the country.

Third, “small businesses” with over 100 employees are underrepresented based on our initial model. This is likely because many small business definitions have a receipts limit, some of which are as low as $7.5 million per year, which would likely support less than 50 employees. As a result, many industries cannot grow to over 100 employees while retaining a small business status. But at the same time, it looks like companies between 100-299 employees are at 83% of expected loans while larger companies got much more than expected.

Here’s where the large companies come in. Companies with franchising models, including hotels, restaurants, and retail stores, were able to also join the PPP program. This allowed a variety of enterprises with current credit lines and cash on hand to participate. But how much did these companies get? Based on this initial view, let’s just assume that companies with 300+ employees are like their 100-299 peers and only 83% of companies traditionally in this space would have gotten loans. It could be less, but again, we’re just trying to get a quick and dirty look of what happened. 

300 – 499 Employee Companies	Loans	Amount
Actual	4412	$ 30,897,983,582
At 100-299 levels	3398	$ 23,793,534,981
Delta	1,014	$ 7,104,448,601

Yes, this says that there were possibly over 1,000 loans going to non-small businesses, resulting in over $7 billion in payroll loans. That’s almost 150,000 additional loans at the 1 – 9 employee level. And, this is assuming that these largest of small businesses qualify to be small at the same percentage as their smaller counterparts, which is doubtful. This number could be even higher.

So, if you are at a small company under 10 employees, your chances for getting a PPP loan are definitely lower than your larger peers. Amalgam Insights estimates that 26% of firms under 10 employees got PPP loans compared to 34% of companies between 10 and 99 employees. You are also competing with large enterprises that are also taking out a couple of percent of the loan amounts and which Amalgam Insights expects will continue to be aggressive in subsequent rounds of PPP loan funding. Although these enterprises are frustrating, it does not seem like they are taking a substantial percentage of the total funds being made available. 

If you’re in this predicament of trying to get a low-amount PPP loan under $100,000 and aren’t in a state that processes loans quickly, you may want to consider going to an online-based PPP program that can process loans in bulk, as traditional banks are limited both in their velocity of loan processing and their reality where they make money off the fees of these loans and will make 10-20 times more from processing a larger “small business” and getting their 2%. 

If your company has between 10 – 99 employees, be aware that there is still a lot of competition. 2/3rds of companies at this size still have not received PPP loans and it is not because they are all doing well in a global pandemic recession quarantine. It will likely take over $1.1 trillion to fully fund all small businesses seeking PPP loans. The rumored $250 billion extension will provide additional funds, but likely not enough for demand. 

And for companies with 100 or more employees, especially those in low-margin industries, programs like PPP show the value of having a flexible corporate structure that allows for small business access to capital. Companies at this size may wish to consider whether it is in their best interests to be under a single corporate umbrella or to run as a group of sub-corporations and franchises to maximize access to capital and business resources. Or consider how much you need this particular loan compared to other financing options. Note that Shake Shack has given back its PPP loan given its current financial position. Being a good neighbor can have strong brand repercussions for companies looking at their long-term business prospects.

Solutions Mentioned: BMC, CloudCheckr, CloudHealth by VMware, MobiChord, Tangoe, Upland Cimpl, vCom, vMOX (Note: solutions will be added to this blog as a resource to the IT community as Amalgam Insights is notified)

Edited April 29 to add G2 Track, Tangoe, vCom; Edited June 4 to add Upland Cimpl

Throughout the last month, practically every company has been going through an uncomfortable transformation where telecom, network, mobility, cloud, software, and other IT assets and services were purchased, changed, redistributed, disconnected, upgraded, downgraded, and altered. It was a time of awkward challenge as the only goal was to be able to work from home.

Now, we face a new challenge. Now that employees are starting to figure out how to work from home, those of us working in the back offices of IT, operations, finance, accounting, and procurement have to clean up the mess. This isn’t just an academic exercise or a destressing exercise like quarantine cleaning. In medium and large enterprises, there is now a lot of waste, duplication, and misplacement of resources that can provide near-immediate savings and the opportunity to rightsize upcoming contract renewals. There are potentially millions of dollars at stake from the estimated 10-15% bloat that has occurred in conferencing, Software-as-a-Service, Infrastructure-as-a-Service, and enterprise mobility spend areas due to a combination of overprovisioning, over featured accounts, and usage overages.

Although there are a wide variety of spend management solutions in the IT world, a few vendors are providing free offerings to help out the business world, especially with mobility and cloud spend. If you are trying to gain control of a newly unruly IT environment, but don’t have access to corporate spending processes at this time, take a look at the following enterprise-grade solutions with free trials or audits.

IT Spend Solutions

Tangoe, an IT expense market leader with network, enterprise mobility, and cloud IaaS expense offerings, is providing a free audit, optimization and benchmark on a regional or carrier basis for enterprises seeking to cut costs. Savings found through these audits will be available for companies at no cost. To sign up for this service, corporate IT and finance departments should email CovidResponse@Tangoe.com.

Upland Cimpl, a technology expense management solution in Upland’s work management portfolio and a sponsor of TEM Expo, is offering a free telecom audit for wireline and wireless services to identify potential savings for their telecom and IT budget. The free audit offer is designed to show how the current climate has affected telecom costs while showcasing quick potential telecom budget wins. This audit offer pertains to both wireline and wireless services.

vCom, a technology expense management provider with mid-market expertise, is currently offering all new customers a four month grace period with no software or managed services costs with the goal of improving the Return on Investment and immediate cash flow for new customers. This program is extended to 12 months for Healthcare and Nonprofit organizations.

Free Enterprise Mobility Spend Solutions

MobiChord, a technology expense management built on the ServiceNow platform and a sponsor of TEM Expo, is offering a free, 90-day service to help companies manage their mobility assets.  

vMOX, which holds two patents for mobile usage optimization, is providing a free mobile expense management solution for corporate accounts using Verizon or AT&T.

Free Cloud IaaS Management

BMC provides a 30 day trial of BMC Helix Cloud Cost to manage multi-cloud expense challenges. This trial is one of 18 applications where BMC provides free trials for IT management.

CloudCheckr is providing a 14-day free trial of its new CloudCheckr CMx platform, which was just launched on April 15 and improves on CloudCheckr’s ability to manage complex multi-cloud environments. – 

CloudHealth by VMware, a leading cloud management platform that Amalgam Insights has covered in previous research, provides a free trial for companies contacting their sales team.

Free Cloud SaaS Management

G2 Track provides a 90-day free trial of its SaaS subscription management for companies seeking to reduce costs.

Good luck to all of you who are doing your best to be responsible technology stewards for your organizations. If you’d like to learn more about reducing enterprise IT costs, Amalgam Insights is both conducting a 10 webinar series on Technology Expense Management challenges starting on April 21 and holding our inaugural TEM Expo on June 11, which will be a free event for all qualified end-users.

To claim your seat at TEM Expo 2020, simply RSVP on the button below.