Unlocking digital transformation: the sustainable solution you may have overlooked.
Did you know that large companies allocate a substantial portion of their IT budget to software maintenance and support? Surprisingly, many still overlook the potential of third-party maintenance (TPM) to drive digital transformation and IT sustainability.
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What is Third-Party Maintenance (TPSM)
Third-Party Support and Maintenance (TPSM) involves outsourcing maintenance and support services for IT hardware and software to third-party vendors rather than relying solely on the original equipment manufacturer (OEM).?
Think of a TPSM as the trusted partner who keeps your IT systems running smoothly, allowing you to focus on innovation and growth. It’s an approach which is gaining traction due to its cost-effectiveness, flexibility, and ability to extend the life cycle of IT assets.
TPSM: The Key to Cost Optimization and Digital Transformation
Ola Chowning of ISG[1] highlights that cost optimization is a top priority for most CIOs. With an expectation for IT costs to remain steady or decrease and CIOs often tasked with funding digital transformation initiatives at least partially from their existing budgets, the challenge of doing more with less is one that CIOs must tackle head-on.
TPSM-derived cost savings can partially fund digital transformation and give CIOs complete ownership of their technology roadmap. Imagine being able to cut your software maintenance and support costs in half, freeing up those funds for your innovation and digital transformation projects. Well, that’s exactly what savvy IT leaders are doing.
Research from Forrester[2] suggests that nearly 80% of CIOs are currently leveraging a mix of TPSMs and OMEs, while 7% rely solely on TPSMs. Among the 14% who exclusively use OMEs for maintenance and support, one-third are contemplating or planning to make the switch to a TPSM.
As software represents the second-highest IT spend category3, it is no wonder IT leaders are increasingly considering the cost savings offered by independent TPSMs. According to Gartner[3], moving to an independent TPSM can yield annual savings of up to 50% on maintenance and support costs. This saving can then be allocated towards financing digital transformation projects or other key CIO priorities.
Most third-party software support players will work with your teams to stay within budget without compromising on security or quality of service. In general, TPSMs typically do not involve long-term tie-in contracts, allowing companies to manage budgets more effectively and avoid vendor lock-in. Research2 indicates that among CIOs using both TPSMs and OEMs, three times as many prefer TPSMs, highlighting their appeal and effectiveness.
One IT executive likened the shift to a TPSM as a major cultural upheaval and internal battle. But once the switch happened, attitudes quickly shifted as the bottom line started looking a whole lot healthier.
It's not only cost savings driving IT leaders to consider adding third-party software maintenance (TPSM) to their vendor portfolio. Implementing digital transformation is disruptive; it's a time when CIOs and their teams need complete control over their roadmaps. OEMs and large software vendors often prioritize their own agendas and business models, tying customers into long inflexible contracts and requiring support payments that may go unused.
The right TPSM will align with your vision and collaborate with you and your team to ensure your operational plans are supported and your digital transformation goals are achieved, putting you and your team in control of your technology roadmap.?
Reducing IT Carbon Footprint
TPSM contributes benefits beyond the traditional CIO agenda. With sustainability at the top of most companies’ agendas, CIOs have to navigate a difficult landscape as they attempt to reconcile the desire to invest in technology and digital transformation with the need to control costs and ensure sustainable IT operations.?
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E-waste is one of the fastest-growing waste streams globally, yet only 20% of it is properly recycled. The remaining 80% often ends up in landfills or is incinerated, posing serious environmental and health risks.
One of the primary advantages of TPM is its ability to extend the life of equipment and systems beyond the manufacturer's declared end-of-life dates. Instead of prematurely retiring functional equipment, TPM providers offer maintenance services, including updates and repairs, to keep systems operational.
By maximizing the lifespan of hardware, companies reduce the frequency of replacements, thereby decreasing e-waste generation and conserving valuable resources.
TPM helps divert electronic waste from landfills by keeping functional equipment in circulation longer. Rather than discarding systems at the end of their service life, TPM enables companies to upgrade components, reducing the volume of e-waste generated by the IT industry.
Furthermore, every stage of a product's life cycle, from manufacturing to disposal, contributes to its carbon footprint. By opting for TPM, companies can significantly reduce the need for new manufacturing, transportation, and disposal of IT equipment, leading to a substantial decrease in carbon emissions.
By embracing TPSM, businesses not only save costs and extend the life of their IT assets but also contribute to the sustainability agenda.
When to consider TPSM?
According to Gartner4 some of the scenarios that will continue to fuel growth in the TPSM market include;?cloud migrations when phasing out some or all of a vendor software portfolio, end-of-support announcements or notifications, when existing maintenance contracts lack price protection or are about to expire. Consider TPSM when you're navigating any of these scenarios to optimize your IT strategy and drive cost savings.
Ready to Unlock the Power of Third-Party Maintenance for Your Digital Transformation Journey? Consider partnering with a TMP provider today to take back control of your technology roadmap while reducing costs and carbon footprint.
Already working with a TPSM? What is your experience and would you recommend it?
[3] Market Guide for Independent Third-Party Support for IBM, Microsoft, Oracle and SAP Software, Gartner 2021
[4] Gartner 2022 Market Guide to Independent Third-Party Support for IBM, Microsoft, Oracle and SAP Software