Why Costly Enterprise Software Goes Unused

Software waste amounts to billions of dollars in unnecessary costs to businesses, and the time and effort to install and update this software is eye-opening.

By now, it's apparent that software is the engine that drives enterprise performance and profits. But putting the right systems in place and ensuring that they're used in an optimal way is nothing short of daunting.

According to a new study conducted by UK-based software lifecycle information firm 1E, The Real Cost of Unused Software, more than one-third of all enterprise software purchases go unused. This amounts to more than $30 billion wasted annually in the U.S. alone, or about $259 per desktop. The company reports that the problem is nearly as bad in the UK, where 26 percent of software is wasted.

1E, which examined 3.6 million users and more than 1,800 software titles over four years (spanning 14 industries and 129 organizations), found that the most problematic software installations include: Attachmate, Microsoft, Adobe and Autodesk. Software waste occurs across companies of all sizes. For example, firms with more than 100,000 employees suffered a 37 percent rate while firms under 2000 employees endured a 41 percent rate.

Interestingly, however, results vary significantly by industry. The education sector posted the worst results at a 47 percent waste level, the energy industry tallied 46 percent, and tech firms reported 41 percent waste. On the other hand, the insurance sector posted 29 percent, government managed 28 percent, and the pharmaceutical sector fared best at 18 percent.

Jason Keogh, VP of Product at 1E, doesn't mince any words. "Unused software levels are extreme," he says. Keogh believes that the financial benefit of removing the unneeded software is only part of the story. "Automating removal of unused software better enables companies to keep up with the pace of digital change, it will increase security, decrease patch time and effort, and free up resources to work on innovation rather than basic tasks and do all of this while reducing cost."

1E isn't the only organization to identify a massive problem with software waste. An April 2015 report from Sage research found that 88 percent of firms across the EU were failing to take full advantage of the money they have spent on business software.

In the end, the message is clear. Basic audits and conventional asset management practices aren't getting the job done. CIOs that use software asset management and embrace automation throughout the software lifecycle are far more likely to manage costs and generate greater value for the enterprise, the report notes.

This article was originally published on 07-19-2016
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