European public services overspending on technology

European public services overspending on technology
© iStock-Marco VDM

New research has shown that European Public Service organisations are overspending on technology.

New research from Insight has shown that 94% of European public service organisations are under pressure to reduce costs during the COVID-19 pandemic, however, it has shown that an inability to optimise IT spending is significantly hampering efforts. For example, unused software licenses cost these organisations an average of £2.4m (€2.64m) a year which is enough to pay the wages of 50 skilled IT specialists.

As organisations have not been able to optimise IT costs, they have had to downsize workforces and IT teams, as well as consolidating physical office facilities.

An investment challenge

The research highlighted a number of key challenges facing health organisations, including that 66% have a large amount of duplicate hardware and software because they needed new technology at the beginning of lockdown, 68% cannot scale their software licenses to the number of employees they have.

Emma de Sousa, Senior Vice President EMEA at Insight, said: “Systemic challenges around cost management have been an issue for organisations for many years. In the current environment, public sector organisations need to make cost savings. But equally, they need to avoid decisions that could impact their capacity to execute digital transformation plans and deliver essential services. Focusing on cost optimisation could uncover opportunities to save money without harming the organisation’s ability to operate effectively.”

Further findings in the report highlighted:

  • Lack of visibility: unexpected purchases by departments outside IT add £1.2m (€1.31m) a year to cloud services costs, while 60% think they are over-spending on licensing but cannot confirm their belief and begin to correct the issue. Greater visibility of this spending could uncover more opportunities to optimise.
  • Organisations lack the skills and knowledge to optimise: 75% cannot negotiate effectively with software vendors, and 72% do not have the skills or knowledge to optimise their approach to asset lifecycle management.
  • Opportunities exist for consolidation: 69% or organisations have not consolidated their IT infrastructure since March 2020. 74% are using multiple applications that have the same functionality, but are used by different teams in different situations; while 61% have multiple contracts for the same software because it was bought by different departments at different times.
  • Organisations preparing for an increase in audits: 87% expect that software vendors will increase their licensing audits in the wake of COVID-19 to ensure they are being paid correctly.

De Sousa added: “The challenges of 2020 will continue into 2021, and IT departments will have a key role in helping organisations face them. Eradicating waste and driving more efficient operations will put organisations in a better place to ensure they are resilient enough to continue delivering services, whatever the future brings. Cost optimisation isn’t easy, and often requires specialist skills and knowledge, but investing in optimisation now will provide immediate financial returns.”

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