Flexera 2023 TechSpend Pulse: 91% of Enterprises View Vendor Price Hikes as Top Challenge

As digital transformation accelerates, enterprises navigate inflation, workplace norms change, and the demand for innovation grows. Many IT professionals are returning to offices; the associated vendor costs and hefty cloud commitments are rising, as is the challenge of optimizing spend. Though wasteful IT spending is subsiding, cost optimization decision-making remains laborious. A thorough understanding of IT assets is vital; top organizations leverage data for decisions, prioritize spend efficiency and harness the power of artificial intelligence.

"Despite strides in curbing IT waste, the battle persists,” said Cyndi Tackett, SVP of Marketing at Flexera. “Flexera’s research shows an increase in vendor pricing, while companies have significant artificial intelligence (AI) investments planned. At the same time, many firms grapple with complex IT decisions due to a lack of visibility. There's been a notable decline in remote IT work, pointing to shifting workforce dynamics and the evolving role of tech.”

Highlights from the Flexera 2023 Tech Spend Pulse include:

• Inflation drives high IT vendor pricing: For the first time, more than 9 out of 10 (91%)identified increased vendor prices as the top spend optimization challenge. The second challenge, spend efficiency (avoiding waste), rose from 81% to 87% YoY
• Investments in AI surge: Enterprises expect to grow artificial intelligence/machine learning (AI/ML) the most: 32% see a significant AI/ML increase; 44% a slight one. Enterprises use external IT resources for specialized skills, with planned changes to external IT resources rising from 59% to 68% YoY for AI/ML
• IT work-from-home rates plunge: Remote work fell from 74% to 39% YoY. Full-time in-office IT staff grew from 26% to 30% over the past year. Full-time with partial remote increased from 16% to 27%. Full-time remote declined from 45% to 23% YoY
• IT waste estimates improve, but the battle is not over: Earlier this year, the Flexera 2023 State of ITAMshowed between 32% and 36% wasted tech spend (36% desktop; 33% data center; 32% SaaS; and 32% IaaS/PaaS). The Flexera 2023 Tech Spend Pulse indicates improvement, possibly due to cost optimization. However, figures may be influenced by optimistic enterprise views. Wasted spend is estimated at 27% for desktop software, 23% for data center software, 21% for SaaS, and 19% for IaaS/PaaS
• Lack of IT visibility hinders decisions: 81% of respondents cited both the complexity of and delays in decision-making as top IT challenges, with insufficient quality data also being a concern

Full survey results are available in the Flexera 2023 Tech Spend Pulse. The report provides a high-level perspective on technology and spending issues that concern senior procurement and IT leaders as they develop strategies and make decisions that influence the trajectory of their businesses. 506 technical professionals and executive leaders worldwide participated in the Flexera 2023 Tech Spend Pulse survey in the summer of 2023. Survey participants include professionals across industries and context areas. All numbers and percentages are rounded to the nearest whole number.