Companies are wasting about 6 percent of their IT spend on software that's not been used according to a new survey from HP. That figure represented a whopping £16 billion across Europe at a time when companies, more than ever, are looking to cut costs.
Application sprawl is deemed to be a problem by 74 percent of CIOs across Europe – although the UK does better than many of its continental counterparts here, with just 58 percent of CIOs complaining of the phenomenon.
The HP makes grim reading for any CIO looking to produce a more effective return on software investment but, according to HP's Stuart Bladen, vice president, application services, at HP, companies are fully aware of the problem. "75 percent of all CIOs say they're wasting money, so they know that some software is being under-utilised."
Bladen said that while CIOs were aware of some of the issues, it was another thing to do something about it. "We're all human being and live in a complex world. We should be rebuilding our PCs every year to make sure they're working as efficiently as possible – CIOs should be spring-cleaning their applications. He added that "the proportion of the budget that CIOs were spending on the status quo was increasing all the time although CIOs wanted to spend more on innovation."
The public sector has a reputation for being more wasteful than the private sector and the research appears to bear this out – or the public sector are more honest said Bladen wryly. However, he also pointed out that it wasn't a fair comparison. "In the public sector there are plenty of specialist applications – they're moving to more standardised software but that's taking some time."
He said that HP had developed a methodology that would enable companies to assess whether software was being under-utilised or not. He said that Applications Value Ratio (AVR), was a way of codifying discipline businesses as a way off assessing which of the application provide real business value to an organisation, allowing CIOs to make informed decisions about their continued deployment."
The main problem facing organisation is long-lived legacy apps, many of which continue year after year. He said that some legacy apps are often used in small but business-critical deployments but, he said, that AVR would help identify these and help move to more modern solutions. Although, he said, "there are many businesses who have been very successful using legacy apps and we wouldn't want to shut them down."
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