How Subscription procurement, renewal, and allocation of open source has become complex?
Nimisha Jain | Product Manager, Ashnik
Open Source has changed the IT landscape. In the last 10 years, the attitude towards open source in enterprise IT environments has changed dramatically, as users have shifted from skepticism about its ability to cope with mission-critical workloads to deploying it widely across their enterprise grade infrastructures. Most enterprises agree that 30% of their IT budget goes into subscriptions renewals that runs critical applications including financial transactions and 24*7*365 customer support.
A vendor study reveals that one open source subscription may have more than 32 billing owners** which means a complex and multifaceted task for an enterprise with more than 500 subscriptions. Hence, it has become more important than ever to have a clear real-time visibility of under-utilized and allocated open source subscriptions and renewals.
The Procurement Challenge
Procurement which plays a critical role in every business transaction are the front-line impact receivers. The impact is not only external but internal, 39%* of CPO have agreed that they face challenges due to organizational structuring which include M&A along with nonstandard processes. In addition, managing complexity within mega suppliers (37%)* and digital platforms within organization & vendors (29%)* contributes to CPO challenges. This data clearly suggests the challenges of the procurement teams. Technology innovations and frequent changes have contributed towards increasing complexities further.
The diversified requirements and relatively newer dimension of open source subscription renewals need more time and higher involvement from the beginning. Business and procurement must try hard to fit in the budget allocated which at times is challenging due to lack of timely information. Open source subscription, if it is over-due attracts compliance issues. Hence, it becomes more critical for enterprises to have real time and expansive insights into subscriptions renewal cycle.
The Business Impact
In the current economic scenes, business teams are already taking the heat of COVID-19 pandemic, which has sparked fears of the worst global recession since the Great Depression and are expected, rather forced to do ‘cost optimization’. This has resulted in either postponement or slow-down for all new projects and the running projects are being optimized through various cost cutting initiatives. This means we must utilize more with the same infrastructure to achieve higher in these disruptive times.
Every industry like banking, telecom, hospitality, manufacturing, or retail have started talking of innovation to provide high customer satisfaction and enhance brand value at reduced cost. Business and IT teams must deep dive into running the projects to enable enhanced functionality and reallocate the existing resources for higher utilization. Steps are being taken in every possible way to reduce the run time cost of every application and beat address the market challenges. As the load on the present projects increase, the chances of over-utilization of existing subscription will increase too, and this might trigger compliance issues.
Though the organizations are focusing on preventing any non-compliance, the fast changing landscape, need for quicker turnaround, growing sophistication, evolving regulatory requirements are all creating challenges in meeting the high standards of compliance. One of the key reasons is the lack of availability of data in real time. Lot of efforts go in manually collecting and compiling data from many teams resulting in non-compliance status. Hence, they need data which can be readily used to stay compliant.
“DATA” – the biggest power in today’s world and the solution to all the problems. The challenges procurement, IT, business, and compliance teams are facing is the outcome of data unavailability in one place, in real time. Most companies that we have talked to, have concurred with this challenge. They have expressed the need for having a system that would give:
- All subscription purchase and renewal data in one place
- Subscription allocation and deployment data
- Projects wise, business unit was spent on subscriptions
- Vendor wise spent on subscription
A unified platform our team has designed to better manage open source subscriptions. Stay tuned for our next newsletter issue or reach out to us.
Source mentioned:**fusebill.com | *Deloitte CPO Study 2019
- Nimisha brings over 13 years of experience in Product Marketing, Strategy Marketing, and Customer Management. As a Product Manager at Ashnik, she is responsible for the overall performance of the business with regards to sales, margins, strategies, partnerships & alliances along with the ongoing development of the employees.
- Modernizing procurement process – especially for subscription management!
- How Subscription procurement, renewal, and allocation of open source has become complex?