Reducing Software Total Cost of Ownership (TCO) With Stronger Digital Adoption

There’s little doubt that harnessing the right software brings great competitive advantage to businesses. For CIOs, however, investing in software is rarely a simple task, especially when it must be rolled out across a large business. It’s even more pressurised by today’s overriding imperative to quickly reduce costs and provide a measurable return on investment. But there’s a way out. . .

Research by Oxford University and McKinsey reported that 66% of large-scale software projects go over budget and 33% are delivered late. This makes it essential to identify problem areas in the total cost of ownership (TCO) – the aggregate direct and indirect costs of any software installation.

Direct costs, which could include programme licences or an SaaS subscription, are easily accounted for. However indirect expenses, like software training or ongoing IT support, are harder to identify, measure, and control – but they quickly mount up.

The need to onboard, support and often retrain employees constitute a significant proportion of the indirect costs in any software project. Failing to focus on employees inevitably leads to another unnecessary, but huge, drive of TCO: poor digital adoption. If you don’t enable your staff to get the most out of new platforms it will invariably add costs and delays to operations.

Increasingly digital, hybrid workplaces further compound the challenge, since the successful adoption of tech is essential for smooth communication and collaboration, as well as keeping employees engaged and motivated.

Let’s explore the relationship between digital adoption and software TCO in more detail.

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Poor Digital Adoption’s TCO Impact

Poor digital adoption is arguably the most significant indirect cost responsible for driving up software TCO. After all, simply implementing a new software product means nothing if employees aren’t trained to successfully maximise its potential benefits.

Employees must not only receive initial training, but ongoing support and regular refreshers, especially since modern software products are constantly being changed and updated. Many people don’t grasp new tech on first introductions, while the average human forgets 90% of what they’ve learned within a week, according to Ebbinghaus’s Forgetting Curve. What’s more, Userlane research shows that software training costs UK businesses an average £2,086 per employee, each year. Yet despite this considerable expenditure, 96% of businesses continue to face digital adoption challenges.

Conventional training methods, such as instructor-led seminars, are not only expensive, but are difficult to deliver at scale, especially as the number of applications staff must contend with every day is rising. On top of all that, increasingly popular hybrid working makes it harder to run truly effective on-site or virtual training sessions.

All of this is putting enormous pressure on IT teams who, while not usually the ones to deliver training, are commonly called on when people have a problem – at a typical cost of £13 per IT support ticket, according to Zendesk. These quickly add up to dramatically affect overall software TCO.

Then again, employees might ask a colleague to help them on a task they can’t complete in the software. Every time this happens, it impedes productivity hugely, as two people are taken away from what they’re supposed to be doing, with each taking an average of 30 minutes to refocus on their tasks after what might only be a simple distraction.

Users who are untrained to take advantage of the tech fully and lodging complaints en masse – many of which are easy fixes for someone in the know – are obviously terrible news for ROI. And it leads to massive under-utilisation of software features, too. In fact, the average employee uses just 40% of a platform’s total capabilities – a huge waste of an expensive investment.

Poorer outcomes will also arise from process errors – with staff more likely to make crucial mistakes when using software they’re not entirely familiar and confident with.

Poor digital adoption is arguably the most significant indirect cost responsible for driving up software TCO. After all, simply implementing a new software product means nothing if employees aren’t trained to successfully maximise its potential benefits.

Hartmut Hahn
Co-CEO and Co-Founder, Userlane


Resolving TCO Problems Through Improved Digital Adoption

With the right approach, poor digital adoption and its costs for CIOs and IT leaders can be avoided.

Using a digital adoption platform (DAP) is a highly effectively way to cut software TCO. DAPs eliminate software onboarding and training costs by empowering employees to learn how to use different products while “in the flow of work”.

They achieve this by providing the user with continuous, interactive guides embedded as an overlay on the software itself. Staff also gain confidence to make full use of the platform more quickly, as they aren’t burdened with static training materials or timebound by organised instructor-led training sessions.

Digital adoption platforms also take the pressure off HR, tech and finance departments. They are also far more scalable and cost-effective than regular classroom-style training sessions. Crucially, a DAP also massively improves feature utilisation. While a typical user would utilise less than half a programme’s features beforehand, on-demand training and support encourages them to tap into the entire range of advanced features.

Interactive guides within the software also ensures that employees comply with SOPs (standard operating procedures), which is vital in ensuring that process quality remains high. In every way, this approach brings a far greater ROI to any software purchase or subscription.

Combining Cultural and Tech Changes

As a combined result of these technological and cultural changes, productivity will be lifted dramatically, while the organisation as a whole will develop a more forward-thinking approach to digital change. Employees’ will become increasingly confident about using more and more software in their work – rather than experiencing ‘app overload’. Plus, with lower TCO and higher digital adoption, CIOs will have more funds to invest in successful digital transformation, keeping their businesses firmly ahead of the curve.


Hartmut Hahn
Co-CEO and Co-Founder, Userlane

Hartmut Hahn is the co-CEO of digital adoption platform, Userlane, which he co-founded in 2015 in Munich, Germany. Hartmut holds two Master’s degrees in Business Administration and Management. Prior to founding Userlane, Hartmut worked in management consultancy, specialising in M&A, digital transformation and technology adoption for businesses.