Boutique IT sourcing and procurement firm Dante Deo has officially launched its IT Renewals Service in South Africa, a comprehensive offering that is slashing the cost of IT licences and reducing risk for major enterprises.
The unique service harnesses Dante Deo’s in-house capabilities, including legal expertise, project management, IT asset management, enterprise architecture and procurement, to effectively manage IT software and services procurement and licence renewals.
Dante Deo CEO, Leon Steyn, notes the service has been commercialised following a number of successful projects that have saved organisations millions in unnecessary expenditure, duplication and/or downtime due to renewal delays.
Steyn says optimal software and services licence management can reduce IT spend by 20% – 30% and avoid the risk of downtime and losing key suppliers due to late renewals. However, in practice, most organisations do not manage software and services efficiently due to fragmented procurement and inconsistent licence management practices.
“In many organisations, business units and departments have autonomy in their software and IT services procurement, which can result in overlaps and a failure to use levers for volume discounts. When optimisation and efficiency levers are not used effectively, organisations can pay a 20% premium on licences,” he says. “There is also utilisation to be considered – if not properly assessed and integrated into their renewals and procurement processes, organisations could sit with up to 15% of their software as ‘shelfware’, or they could be charged penalties for under-subscribing.”
Duplication occurs regularly and at a high cost, he says. He cites an example of a major multinational that renewed its software licences out of two global regions – at the beginning of each year and mid-year. On careful review of the contracts and licensing metrics, it was discovered that for six months of every year, the organisation was paying double for the same software. “This is a reality, especially in multinationals,” Steyn says. “We are seeing that on average, around 70% of major enterprises have at least two or more contracts with the same vendor, so they are losing economies of scale.”
Effective renewals management identifies better value propositions and dramatically reduces unnecessary expenses, he says. “Dante Deo has managed thousands of IT software and services contracts, so we have an excellent understanding of what solutions are in the market and how these fit into the organisation."
Dante Deo also helps organisations reduce risk by ensuring their renewals are carried out timeously. He explains that many organisations neglect renewals until the last minute, overlooking the lengthy negotiations and approvals processes that must take place before the renewal date. If these are not concluded in time, on-site services teams could be pulled, or software licences shut down. “In heavy industry like manufacturing or mining, at least 60% of the businesses now run on digital technologies. They are so reliant on them that if the system goes down, the site goes down. So if you miss a renewal, operations stop,” he says.
Dante Deo’s Renewals Management Service, built on a foundation of seven years of delivering procurement, project management and IT asset management services to international clients, encompasses the full spectrum of software and services procurement, licensing and renewals.
Says Steyn: “We analyse all the organisation’s software and IT services contracts, register important components and document usage, milestones and renewal requirements. Once this data has been consolidated, we action well ahead of time what is needed to renew the contract and ensure it is fit for purpose for the next period.”
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