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Software Asset and Licence Management

One of the few remaining ways to realising cost efficiencies…

Software Asset Management (SAM) is the most efficient way for organisations to gain control of their software estate from both a licence compliance and financial perspective. The most effective SAM licence management and optimization strategy will enable organisations to achieve the highest possible return on their software investment at the lowest cost. For many organisatsions, SAM represents one of the few remaining ways that substantial IT savings can be realised. Independent research by McKinsey and Sand-Hill Group estimates that as much as 30% or more of IT budgets are consumed by software licence and maintenance costs. By adopting ‘best practice’ SAM processes, organisations can maximise software utilisation, reduce the risk of vendor non-compliance (audits, fees, penalties), and reduce the overall IT costs by as much as 10% and software costs by over 20% per year.

Adopting SAM should not be taken lightly – the change process is complex, it requires genuine buy-in at a senior executive level. As with all other large-scale corporate projects, good planning and clear direction is required – these Guidelines will provide a platform for your evaluations.

SAM requires a combination of people, processes and technology to gain optimum efficiency - from both a risk mitigation and cost management perspective. Key to a successful SAM strategy is having the right people and resources in place to ensure that assets are managed and roles and responsibilities are clearly defined so that daily tasks are performed seamlessly.

What is Software Asset Management/Licence Management

Software Asset Management (SAM) is generally understood as the process of maintaining software compliance or avoiding overspend on software licences. However, SAM includes much more. It is a set of best practice processes that touch a great number of functions within an organisation. SAM process is a means of integrating optimised licence management with existing IT systems such as Configuration Management/Inventory tools, Enterprise Resource Planning, Procurement, Human Resource and Service Catalogue/Helpdesk to allow the collection of the vast amount of data needed to effectively manage a software estate.

Cost Savings – The number one driver for an optimised SAM programme

“Companies can expect to achieve 30% savings in the first year and between 5-10% annually with an effective Software Asset Management (SAM) program.” – Gartner

This statement highlights the very real cost benefits to taking a ‘best practice’ approach to SAM. But, it’s not just from a cost saving perspective that optimised SAM makes sense. It resounds as a common-sense approach across the entire organisation that also increases operational efficiency and reduces risk.

Figure 1

Figure 1

Figure 1 shows some common industry facts taken from various sources, projecting savings on software for an IT estate of an average of 2,000 PCs.

Without taking into account the number of servers and PC’s, it’s clear to see that £1m over a 3 year period is an achievable amount by implementing an effective SAM program. Organisations know they have challenges in their ability to fully control all aspects of their IT estate. However, the real problem is often knowing how and where to adopt improvements in control to achieve the biggest benefit.

Getting started on a best practice-based approach to SAM

Taking a best practice approach, first and foremost, requires an understanding of the extent of the problem. Common questions may be:

  • Do we really know how many PCs and servers we have and where they are located?
  • Do we know what software is deployed?
  • Are we counting our entire virtual or thin client infrastructure? Do we understand what we are purchasing?
  • Do we have adequate records of what we are purchasing?
  • Do we know what we are ‘allowed’ to use?

Adopting some practical methods for addressing and improving asset control is required, yet companies often mistakenly try to tackle all aspects at once. An organisation should assess the key areas of risk. This could be based around specific software vendors with whom the expenditure is high or there is a strong likelihood of a software audit. Alternatively, the decision could be based around certain contract renewals. Any of these areas is a good place to start. Reducing the problem into manageable chunks offers a much greater chance of success.

Taking on a best practice methodology at the right level in the organisation is also a key factor. If there is no adequate executive level backing, then adopting SAM can become a largely ineffective strategy. Because SAM is a matrix of processes, taking a holistic look at all key business areas and finding practical ways to adopt change can only be successful if those responsible for identifying gaps are given the support and backing at a senior level. Ultimately, SAM requires change to be facilitated across a broad set of business functions within the organisation.

Analysing Current SAM Processes and Maturity Levels

To implement a programme that manages controls and protects the organisation’s software assets, it is necessary to understand the maturity and effectiveness or otherwise of existing SAM processes.

By reviewing the policies and processes already in place, you will be able to identify areas of failure or missing resource. This inturn will facilitate corrective action to reduce the risks associated with the management of IT assets and adoption of methodologies for improvement.

Figure 2

Figure 2

Figure 2 illustrates a high level process that will provide a useful basis for your initial evaluations:

  • Identify where strengths and weaknesses exist within current processes
  • Perform a ‘gap analysis’ between current processes and best practice
  • Decide a strategy for improvement that will offer the best possible ROI
  • Continue to make regular assessments and analyses of processes

Identifying where strengths and weaknesses lie within the organisation requires maturity assesment modelling. An organisation should devise a set of key questions around various aspects of its IT processes and best pratices to measure their maturity. Key stakeholders should then be asked to answer these questions independently of each other. The collated results can then provide an overall perspective of where areas of weakness or risk may lie within the organisation. Typical questions include:

  • Is there a written SAM policy?
  • Do we have a senior executive sponsor with the organisation?
  • Is there a policy for authorised software?
  • Is there a central licence repository?
  • Are unused licences re-harvested?
  • Is staff able to install their own software onto PC’s?
  • Do we have a tool for managing and optimising software licences?
  • Do we have an authorised vendor/supplier list?
  • Do we purchase software centrally?
  • When a computer is retired, are the associated licences re-harvested?

Once the answers have been collated, you will be able to determine where key issues lie.

And so the journey begins…

Enterprise Licence Optimisation and SAM best practice requires a major cultural shift within the organisation… a shift that enable you to take control of processes so that a more active approach to SAM can be undertaken. Those that do so; will better harness the power of this crucial business asset.

Adopting SAM should not be taken lightly – the change process is complex, it requires genuine buy-in at a senior executive level. Also, the change process may only happen over many months or even years. Consequently, this change process should be split into manageable chunks. As with all other large-scale corporate projects, good planning and clear direction is required.

This article provides a summary of what might be achievable through an effective SAM approach…. a more detailed strategic routemap is available as Guidelines 340: Software Asset and Licence Management



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