ITAM ROI: calculating savings before you buy (build vs buy)
If you have to justify an IT asset management subscription to finance, this is the model. What to count on the savings side, what to count on the cost side, and a worked example for a 200-employee company that proves the ROI in three weeks.
"What's the ROI?" is the most common procurement question, and the most often answered with vibes. The right answer is a model that finance can challenge: clear inputs, defensible assumptions, separate buckets for hard and soft savings, and a sensitivity check.
The five savings buckets
- License rightsizing. Hard savings. Cancelled or downgraded SaaS seats from utilisation data.
- Auto-renewal prevention. Hard savings. Contracts that would have auto-renewed at higher tiers but didn't because of the 90-day alert.
- Shadow IT reclamation. Hard savings. Untracked SaaS that gets sanctioned, migrated, or cancelled.
- Hardware lifecycle optimisation. Hard savings. Reassigned devices instead of new purchases; ghost-laptop recovery.
- Time saved. Soft savings. IT and finance hours not spent reconciling spreadsheets, prepping audits, or chasing renewals.
Buckets 1–4 are real money. Bucket 5 is real time, which is real money, but finance discounts soft savings — typically by 50%. Build the model honestly with that in mind.
Worked example: 200-employee SaaS-heavy company
A 200-person professional services firm. $1.8M/year IT spend. SaaS-heavy: roughly 60% of IT spend is software, 25% hardware, 15% services. No formal ITAM today; one person spends ~10 hours/week reconciling spend.
Inputs and assumptions
| Input | Value | Source |
|---|---|---|
| Annual SaaS spend | $1,080,000 | 60% of $1.8M |
| Annual hardware spend | $450,000 | 25% of $1.8M |
| Industry-typical dormant SaaS rate | 22% | Across mid-market benchmarks |
| Dormant rate that's safely reclaimable | 15% | Conservative; some seats are intermittent users |
| Auto-renewal increase rate | 8% | Vendor default at renewal |
| Hardware ghost-laptop rate | 4% | Mid-market average |
| Loaded cost per IT/finance hour | $60 | Burdened |
The calculation
The cost side
The numbers
| Metric | Value |
|---|---|
| Year-1 net savings | $262,500 – $12,348 = $250,152 |
| Year-1 ROI | ~2,026% |
| Payback period | ~17 days |
| 3-year cumulative savings | ~$760,000 |
The honest version
Real-world numbers depend heavily on starting state. A company with disciplined IT today might only see 8–12% reclaim. A company that hasn't run a license sweep in three years routinely sees 30%+. The model above sits in the middle.
Build vs buy
"We could build this internally" is the second-most-common procurement objection. The math:
| Component | Build cost | Buy cost |
|---|---|---|
| Initial platform development | 2 engineers × 4 months × $12k/mo = $96k | $0 |
| SaaS API integrations (15 minimum) | 1 engineer × 6 weeks/integration = ~$200k for the 15 most-used | Included |
| Identity provider integration | 1 engineer × 4 weeks = $12k | Included |
| Contract parser (LLM) | 1 engineer × 8 weeks + ongoing inference cost | Included |
| UI / dashboard | 1 engineer × 8 weeks = $24k | Included |
| Ongoing maintenance | ~0.5 engineer ongoing = $72k/year | Subscription |
| Year-1 total | ~$400k+ | ~$3k |
Building wins only if you have unique requirements that no commercial tool meets — and even then, mostly only at >5,000 employees where the integration burden amortises across enough users to make sense.
What finance will challenge
- "Are these reclaim numbers real?" Yes — they're verifiable inside the first month from utilisation data. Run a 30-day pilot to validate.
- "Can't we do this with spreadsheets?" Up to about 50 employees, yes. Past that, the maintenance cost exceeds any subscription.
- "What if our use case is different?" Start with the free tier and validate with your data before committing budget. ITAM platforms with usable free tiers exist exactly for this de-risking.
How to make the case
The two-page memo for finance: page 1 is your version of the calculation above with your numbers; page 2 is the cost side, the build-vs-buy line, and the proposed pilot plan (30 days on the free tier, decision point at day 30 with measured savings). Most finance teams approve at that point because the downside is bounded and the upside is measurable.
Run the ROI on your real data — free
InventorIA's free tier covers 10 users; the pilot above can be run in 30 days with no commitment.
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