SAM (Software Asset Management)

Article

Using SAM (Software Asset Management) to mitigate risk and identify savings

March 2019

Global development of modern technologies has resulted in every organization using commercial software on a daily basis. Exercising control over software assets in medium and large enterprises has become practically impossible without specialist expertise and experience in the licensing area. As it turns out, the number and type of licenses purchased by organizations most often do not correspond to their actual needs. The engagement of persons specializing in software management and implementation of the SAM tool allows to reduce costs, limit the risk of penalties resulting from insufficient number of licenses and improve IT security level.

Who uses Software Asset Management (SAM)?

Based on the findings of a survey conducted by Deloitte in 2018 among 27 largest organizations in Poland operating in various economic sectors, only 38% of them use a dedicated SAM (Software Asset Management) tool. According to our experts, this is about to change and within three years most companies in Poland will implement such a tool, and the majority of them will use services of an external provider in the area of software management and maintenance. Already one third of companies is considering transferring accountability for SAM outside the organization and we are pretty sure that more firms will join in. Why is this solution worthwhile?

Cost reduction thanks to Software Asset Management

It is no secret that cost reduction is one the main reasons why organizations decide to implement new solutions and projects. Dedicated software management tools are no exception, and savings from the implementation of such a tool may be considerable. It is worth remembering, though, that the sheer implementation is not enough to achieve the expected outcomes, as in order to see real savings the tool needs to be fed with current inventory and licensing data. Similarly, the maintenance of the tool requires a qualified staff equipped with the necessary licensing knowledge.

Software-related expenditures constitute 20-40% of IT budgets. In many organizations conscious software management provides opportunities to reduce such expenses by as much as several dozen per cent. Many organizations see potential savings in applying SAM solutions as apart from virtualization they provide the greatest opportunities for IT costs reduction. This results from license optimization or avoidance of penalties for license inconsistencies.

Another aspect is time necessary to carry out a software audit and related costs. As the results of the survey indicate, nearly 50% of respondents admit that their organizations spend 20-60 business days a year on servicing licensing audits (which translates into 1-3 calendar months), and according to about 30% it is more than 60 business days (so more than 3 months). This means high costs for the organization as employees instead of taking care of their everyday tasks need to deal with audit-related matters. Using the SAM tool and taking proactive actions in this respect let the company reduce time, and thus costs related to involving IT staff, security and legal departments in the audit as well as external advisers who help sail through the audit process.

Software Asset Management means reliable data

In the opinion of over 50% of respondents the use of reliable data is a key to efficient software management, with qualified staff quoted as the second most important element (21%). Even the best people will not be able to manage software efficiently without access to complete and correct data.

Moving an organization to a virtual infrastructure (Citrix, VMware, cloud solutions) makes it harder to track licensing and software used. Organizations which previously had used individual systems cannot rely on them anymore to gain a full picture of the IT environment. Various environments are managed by various systems, which leads to dispersion of data relevant from the perspective of software management. A quick evaluation of the company’s licensing situation is not possible without an in-depth and time-consuming examination. Moreover, there are also devices which have not been recorded in any systems available in the organization and due to dispersed knowledge persons in charge of software management may not be aware that such assets do exist.

Using services rendered by a partner, who will be able to deliver solutions adjusted to specific problems and challenges a given organization is struggling with, may be a way out of this situation. One of such solutions entails reporting and managing licensing compliance in the organization by a partner who will be delivering relevant data based on a dedicated software management tool, which gathers data from multiple systems operating in the organization, and additionally will deliver its own solutions to collect inventory data that will allow to a gain a full picture of the software used in the organization. Proper configuration and maintenance of such a tool provides assurance that the data used are complete and reliable, and makes it easier to take SAM-related business decisions. It also worth remembering that if a company decides to outsource SAM services, this is the provider who is accountable for data accuracy.

Ensuring consistency with the licensing terms and conditions

Calculating and monitoring licensing position and ensuring consistency constitute key tasks for persons accountable for the SAM area in an organization or a partner rendering such services. A multitude of licensing metrics and terms and conditions, plus frequent changes (e.g. between subsequent versions) require that specialists not only demonstrate great expertise but also need to keep up-to-date with novelties. Maintaining such level of knowledge inside an organization does not seem a cost-effective solution. Thus, outsourcing is a good alternative. SAM tools are also an option as they include licensing knowledge and get their libraries updated on a regular basis to ensure timely data.

Over 80% of respondents said that five or more software producers play a key role in their organizations. Manual monitoring of a licensing position for so many providers, e.g. with the use of a spreadsheet, is extremely time-consuming and prone to error, while performing it on a current basis or even every month is practically impossible. What is more, as much as 45% of organizations verify licensing compliance only when needed or for audit purposes, while over 30% just once a year. Meanwhile, properly managed SAM tool allows to monitor licensing compliance in a continuous manner.

Moreover, more and more software audits are being conducted on the market. For many producers compliance programs make an inherent element of the sales cycle and their routine operations. Companies unprepared for audits expose themselves to the risk of non-compliance with the licensing terms and conditions or software use beyond the entitlements held, which often results in high penalties imposed by licensors. A trusted SAM partner, operating based on a SAM tool and managing software in a conscious manner allows organizations to get ready for the audit in advance and, consequently, reduces any possible licensing inconsistencies.

At this point it is worth mentioning the benefits of license managing services delivered by an external partner. This solution takes the strain off the company and transfers accountability to the partner in the event of an audit, but also reduces the risk of its occurrence. Knowledgeable about outsourcing services used by the client, software providers less frequently decide to run audits in such companies. There are also programs that allow to completely avoid audit. For instance IBM offers its clients a product which is about involving a global IBM partner, i.e. IBM Authorized Software Asset Management Provider, to monitor licensing compliance of their products. Deloitte is one out of four IASP partners worldwide. A contract with IBM partner can be concluded for 1 year or 2,3 years, with the possibility to extend the period, and IBM ensures that no software legality audits will be performed during the contract period. Once a quarter the IASP partner is obliged to prepare compliance reports regarding IBM software. Should any licensing shortages be detected, the client can purchase the missing licenses from IBM or its partners, including current discounts.

Software Asset Management is also about license optimization

Ensuring licensing compliance is one thing but engaging a partner with extensive licensing knowledge and experience in SAM allows to optimize software licensing. Based on Deloitte’s estimates roughly 22%, i.e. nearly one fourth of the purchased software, will never be used, while 58% of enterprises pay for software support they do not utilize.  An experienced person with the use of the SAM tool can easily identify redundant licenses, which will help minimize the purchase of unnecessary support in the future. Also, knowledge of the IT environment makes it possible to identify potential savings through its reconfiguration. SAM tools allow to run simulations to test various configurations and scenarios which makes it possible to find the best and most cost-effective solution for a given organization.

Knowing what licenses the company needs ensures better bargaining position when concluding or extending contracts with software providers, and thus allows to negotiate better terms and conditions, most suitable for our organization. Moreover, it allows to eliminate excessive support services and software licenses, increase company’s efficiency through the optimization of software investments.

Greater security

The Software Asset Management (SAM) tool plays an essential role in the area of cybersecurity. It is able to provide information on devices used in the IT environment and installed products, including such details as their versions or patches. Some of the tools also have libraries specifying the end date of producer’s support for individual products.

SAM tools provide the possibility to create so-called black and white lists, which include applications that are either forbidden or allowed in a given organization. This allows to activate alerts whenever the tool detects a product from the black list, which potentially may endanger the company’s IT security. I am also encouraging you to read this article, which provides more insight into this matter.

Software Asset Management - Summary

Among the benefits of the SAM tool implementation, as much as 84% of respondents have indicated support with carrying out licensing compliance and help with cost reduction.  Nevertheless, nearly two thirds of companies (62%) do not use such technology despite substantial savings it may bring. Still, the implementation of such a tool requires experience in using the tool and carrying out maintenance works to fully benefit from the advantages it offers. Unfortunately, such experts are often in short supply - 35% of organizations hire just one person responsible for managing licenses or do not have a dedicated person at all; yet, more than half of companies have a two- or three-person teams. Given the size of teams and the need to continuously update specialist knowledge, which becomes outdated very quickly, companies should consider transferring the accountability for SAM or selected services from this area to an external provider. According to the survey findings, 86% of organizations are using SAM-related services, and as our experts and worldwide trends suggest, more and more companies will finally decide to outsource primary SAM activities.

Software Asset Management

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