35% of businesses looking to cut IT costs in 2023: Interview with Hayley Mooney, Crayon

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35% of businesses looking to cut IT costs in 2023: Interview with Hayley Mooney, Crayon

21 June 2023

8 minute read

According to a new report from Crayon, 90% of businesses cite IT cost optimisation as a high priority right now, with 35% either actively assessing their IT spend or looking to cut it. The ITAM Review spoke exclusively with Hayley Mooney, UK General Manager at Crayon to learn more.

It is no surprise that businesses are under significant pressure right now to do more with less. In the technology industry alone, 768 tech companies have made more than 206,000 layoffs globally so far this year (this list is updated regularly so it may be even higher by the time you read this!).

The latest annual study from Crayon and SAPIO Research discovered that, because of this pressure, 90% of businesses have made IT cost optimisation a priority this year, while only 5% of businesses believe their IT budget is currently being fully optimized.

We discussed the survey, FinOps, AI, global pressures and more with Hayley:

Cost optimisation in hybrid environments

The report found that 90% of businesses list IT cost optimization as a high priority for their business. What are the biggest challenges facing Crayon customers right now?

“The economic landscape is proving incredibly difficult for almost every business across the globe. Business leaders are struggling to find a solution that will help them to remain competitive while cutting costs. We know too that when it comes to IT spending, many businesses do not give it the same kind of scrutiny as other major line items.

There are big shifts taking place right now. Our customers are trying to get to grips with huge commitments for hyperscalers for example (Microsoft and AWS specifically). Large customers have made big, multi-year commitments and are now struggling with the cost management of these environments – cost optimisation has become a big focus for them.

“Never before have I seen so much demand for this activity [cost optimisation]. Particularly with traditional services e.g. Enterprise SAM. But with so many operating in hybrid environments, there’s much confusion and little governance around the movement to the cloud.”

“Not everyone is investing in FinOps when they should be”

The report found that three in five businesses are implementing a FinOps practice, with adoption particularly high in Singapore (84%), Saudi Arabia (76%), Denmark (75%), the US (74%), and Norway (73%). What are your customers doing in regards to FinOps?

“Some customers understand the need to put the governance in place early as part of their journey to cloud. This is especially true in the public sector. But on the corporate side they’re migrating to cloud so fast that the governance lags behind. Not everyone is investing in FinOps when they should be. But the budget is starting to be released. There is a slow realisation that cost savings can be made in the cloud.”

How often are the two teams (SAM and FinOps) linked, or are they still broadly separate?

“Only a handful of customers have a joined up strategy when it comes to FinOps and SAM. Of those companies that have both, SAM is typically linked to procurement, while FinOps is linked to financial. But remember, not every company even has a SAM team to begin with! Some companies, especially those with little-to-no-legacy, have FinOps but no SAM. These companies are born in the cloud so FinOps is where they live.”

The role of AI in SAM / ITAM

What are your customers doing with AI?

“Customers are all over AI. It’s really taken off very quickly.. It’s mostly still at the learning stage, but some have started to shift into use cases. In particular, they are interested in incorporating computer vision models or large language models such as ChatGPT within their own environments that can leverage company data and make it more accessible across the business.

This can lead to cost savings and new revenue streams. It’s primarily about using data with the goal that it will optimise the business, if companies are not already considering implementing AI in their businesses in one way or another they will soon find they’ll be losing their competitive advantage.”

Is SAM / ITAM part of the AI conversation yet?

“It’s coming, but it’s still two separate areas. There’s no doubt this is where it’s going to go. Automated FinOps, automated ITAM etc. For now we have to work hard to bring that together at the C level. Fear of job losses is something that is often associated with AI. But we’ve always felt with SAM there’s so much work to do that gets left. AI will help people to get more done in SAM through automation, not jeopardise their jobs.

There will always be a fear around anything new, but I see AI as an enabler, not a headcount remover. You have to remember that companies are simply people engaging with other people, so you can’t have companies without people. There are opportunities out there where immediate savings can be made with AI, but they’re often short-term decisions. They need to be aligned with the overall business strategy. That’s the challenge.”

Additional findings from the Crayon report

The survey of over 2,008 IT Decision makers was a fully global report, including the US, Australia, Europe, Middle East, Africa and Asia (full country list below). The additional standout findings were:

One in five (20%) of global businesses leave IT cost decisions to CFOs and finance teams
90% of businesses list IT cost optimization as a high priority for their business
35% of global businesses are either actively assessing their IT spend or looking to cut it
95% believe their IT budgets are not fully optimised (does this mean 5% have it totally under control with no room for improvement?)
The top three spend areas on supporting existing infrastructure are:
- Security (83%)
- Data (81%)
- Cloud (76%)
Biggest obstacles to optimizing IT costs are:
- Lack of time among senior decision-makers (31%)
- Lack of knowledge on how best to cut costs (28%)
- Lack of visibility across the organisation’s spending (28%)

Research methodology

The survey was conducted among 2,008 IT Decision makers in Australia, Austria, Denmark, Finland, France, Germany, the Netherlands, Norway, Philippines, Portugal, Saudi Arabia, Singapore, South Africa, Spain, Switzerland, UAE, UK, and the US.

The interviews were conducted online by Sapio Research in February 2023 using an email invitation and an online survey.

Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. In this study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 2.2 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.

35% of businesses looking to cut IT costs in 2023: Interview with Hayley Mooney, Crayon