Budget season is just around the corner, which means IT leaders are about to take a long, hard look at their vendors and wonder whether they really need all those tools.
In fact, according to the latest research, 82% of enterprises are actively pursuing supplier reduction to cut overlaps and simplify management. But will they be successful?
If it seems like an obvious question, the answer is far from simple. For one thing, definitions of success vary. Organizations may report on headline metrics like lower costs or fewer support tickets but fail to measure downstream impacts like user satisfaction or productivity.
Still, it’s possible to get a sense of the failure rate from a widely cited BCG report, which found that 35% of all digital transformation projects fall short of their goals.
For IT leaders considering tool consolidation it’s a great reminder that they can’t take success for granted. So it’s no surprise that this was one of the topics of conversation in the recent webinar with Miro’s Bram Jonker and our guest speaker, Forrester VP and Principal Analyst Bobby Cameron.
They talked about the challenges that can derail tool consolidation – and how IT leaders can avoid them. Here are the three key insights they shared.
It’s a team effort
According to Bram, the number one reason tool consolidation projects fail is because they’re planned and executed by IT without any input from the rest of the business.
“Decisions can’t be made based solely on the data IT has, like cost, usage stats, or license counts. That’s only one part of the picture.” The other part, he says, is “understanding how teams actually use these tools, what role they play in key workflows, the business value they deliver, and how critical they are to their daily operations.”
If IT removes an application based purely on cost or usage metrics without understanding its business context, they risk disrupting essential work and damaging trust. And if that sounds like a hypothetical problem, Bobby Cameron is here to set you straight.
“Decisions can’t be made based solely on the data IT has, like cost, usage stats, or license counts. That’s only one part of the picture.”
Bram Jonker, Principal Product Evangelist, MIRO
He shared the story of a global financial firm whose IT team removed a tool that had very low usage – just a couple of people, maybe once a year. Easy decision. Until tax season came around and the two people responsible for preparing the company’s accounts found they no longer had access to their tool of choice.
Instead of getting mad at IT they did something much worse. As Bobby tells it: “They went out to a third party, got an online tool to do exactly what they wanted, and broke all the security and privacy rules by dumping a lot of internal data online.” The moral of the story? “It’s the business side, not just the IT budget that makes the difference.”
Don’t get lost in the cost
As Bobby’s example illustrates, if cost reduction is the only lens you apply to tool consolidation you risk making decisions that can backfire in unpredictable ways.
Many organizations have replaced specialist tools that actually drive speed and innovation, only to replace them with generic versions that don’t fit the way people actually work. As Bobby puts it, “It’s easy to get lost in the cost side, but the benefit side is also quite critical.”
“This is something I’ve seen happening so often,” agrees Bram, “where employees are really upset that they’ve been using a tool for a long time and all of a sudden, they don’t have access to it anymore without warning or without even having a conversation with the IT department.”
His conclusion? “Innovation needs flexibility. If cost is the only lens, you often end up with slower developments, shadow IT, and less agility.”
Start by building a better business case
As we’ve seen, when it comes to tool consolidation the bigger picture matters. Speed, adaptability, innovation, and employee experience should all make a difference to IT decision making. If they don’t, “What you end up with is a tech stack that looks efficient on paper, but in practice it’s going to slow you down,” explains Bram.
And yet all too often these issues aren’t captured or even considered. The reason for that, according to Bram, is because they’re built on outdated business cases. “In the past, the goal was simple: Reduce costs, standardize tools, and call it a win,” he argues. “But in today’s fast moving and unpredictable environment, that kind of thinking just doesn’t hold up.”
The modern business case for tool consolidation “prioritizes flexibility, scalability, and long term value, not just short term savings,” he says. And if you want to know how to build that business case in a way that appeals to your senior stakeholders, check out our free ROI Estimator.
Five ways to avoid common tool sprawl traps
Of course, Bram and Bobby didn’t just outline the challenges – they also had a few solutions up their sleeve. These are their five top tips for delivering successful tool consolidation outcomes.
- Define your goals: Be clear on why you’re consolidating. Is it just to cut costs or is it to drive efficiency and support innovation?
- Audit with purpose: IT leaders need to get beyond the surface level data to understand which tools support business outcomes and which don’t.
- Prioritize integration: Because tighter connections between tools will drive greater value.
- Engage employees: Get input from the people using the tools so you know what’s critical and what’s not.
- Establish ownership: Make tool consolidation a shared responsibility between IT and the rest of the business.
If there’s one thing Bobby recommends organizations set up right away it’s a system of record. “You’ve got to have a place you can point to and say, ‘Here’re my tools, what business capabilities they support, and what business value they deliver. That’s where I determine my tool sprawl.’ That’s the key.”
For Bram, establishing ownership might be the critical step in the whole process. “When done right,” he says, “it leads to better outcomes across the board. Users feel heard. It’s better aligned with business outcomes. And you will make better informed decisions.”
In fact, he concludes, a collaborative tool consolidation process can totally transform the way IT is seen across the organization, from simply supporting the business “to propelling it forward, opening up new opportunities, and building sustainable competitive advantages.”
