Software Asset Management (SAM)

Article

Software Asset Management (SAM) - a self-financing investment

Software management

August 2018

Companies that use commercial software struggle with a wide range of problems, such as complicated license agreements, a multitude of software in companies, virtualization, cloud, subscriptions, growing licensing fees and audits carried out by software producers - to name a few. According to Deloitte’s calculations software-related expenditures account for 20-40% of the IT budget. Given the above, companies tend to realize that efficient software asset management (SAM) may not be possible without the right Software Asset Management system. Modern SAM programs enable users to prepare a license balance, i.e. compare the obtained license entitlements with actively used software, taking into account contractual arrangements. With the SAM system the license handling process comes down to verifying collected data and supplying the information that can’t be automatically verified by the system.

Software Asset Management is all about savings and risk mitigation

The SAM (Software Asset Management) system allows to simplify and automate license-related work. Yet, this is just the path leading to the target, i.e. optimal license use. On the one hand this means savings as no unnecessary licenses are purchased, and on the other mitigation of the license non-compliance risk as the system monitors compliance with the license terms of the main producers. Experience has shown that the return on investment in the SAM system can be expected within two years from its implementation in a form of:

  • lower support costs, license re-use
  • greater productivity of the staff handling license-related matters
  • better license purchase price
  • less non-compliance and mitigated risk of license non-compliance

Interestingly enough, it may happen that during the proof-of-concept certain savings allowing to finance the purchase and implementation of the SAM system are identified.

Software Asset Management Pyramid

Growing awareness of the need to manage software

The Polish market is witnessing more and more tender procedures related to the supply and implementation of a software management system, which reflects a growing awareness among companies. A large part of tenders is successful, but some end in fiasco. For instance, having selected brilliant technology, after its implementation companies do not use it and continue to perform software license reviews manually. The reason for that lies in an erroneous belief that the implemented tool will solve all the problems, while this is just the beginning of conscious software management which requires continuous engagement on the part of the company.

We also observe companies, which have precisely defined system requirements, but failed to verify them at the proceedings stage and in the end received a set of several dozen scripts that do not facilitate the work of persons handling licenses in the company. Unfortunately, this is not a unique example. How to explain it? What can be done to increase the probability of a project’s success?

Software Asset Management Lifecycle

Proof-of-Concept

Proof-of-Concept is one of the key elements of the SAM implementation, i.e. a phase during which the supplier installs the system on the client’s infrastructure for testing and proves the value of its implementation. More and more companies decide to include this phase which only confirms the rising awareness of Polish companies. It is important to plan PoC properly. During the test installation providers show their best side by presenting so-called quick wins and advantages of the offered systems. Whereas we are encouraging clients to create their own scenarios they would like to see within the PoC - every company is different and it is worth using this period of usually 2-3 weeks to check the system in detail with reference to a specific organization. Some companies rely on Microsoft solutions and thus are interested in settling licenses of this producer. More diversified infrastructures may require that more exotic license scenarios testing be performed, such as settling PVU licenses in HP-UX clusters or AIX micro-partitioning. It is important to remember that often the highest software costs and audit risk is associated with software installed on servers.

Who is in charge?

First of all, there is no one tool that would “do everything on its own”, make precise calculations of the license position and indicate exceptions in the infrastructure. Human intervention would always be necessary in order to install agents, properly mark installations (e.g. active/passive cluster or the test installation) or to perform many other actions.

Second of all, there is a competence gap. Unfortunately, there are just a few specialists on the market knowledgeable about the licensing rules. What is more, not only is licensing knowledge complicated, but also includes lots of special cases and is subject to frequent changes. In large enterprises it is essential to be acquainted with licensing of a few or even several dozen software producers. Additionally, the right SAM (Software Asset Management) system administration apart from license knowledge also requires technical expertise (integration with other systems used in the company -AD, SCCM, ILMT etc.) and the knowledge of licensing agreements. Taking all those elements into account and assuming that the position of a license specialist in the organizational hierarchy is quite low, there is no surprise that not too many persons are interested in taking care of this highly specialized and not very attractive area.

Third of all, given the scale of the problem and the cost of solving it, quite often companies tend to procrastinate the moment of taking a decision, regardless of the consequences (with license shortages and the risk of a potential audit on the one hand, and higher software costs on the other).

Fourth of all, there are no best market practices that could help companies take a decision as to which system or partner to select. Since the group of companies interested in efficient software management is growing, there are more and more providers claiming that they know how to implement this type of solutions. In such case in order to increase the probability of success, it is necessary to run a Proof-of-Concept to verify the offered system and competencies of a given partner.

SAMaaS - let’s focus on the essence of the issue

Maybe instead of defining expectations regarding the tools, the team accountable for software management in the company, processes etc., let’s just focus on two, easier to define elements. 

Firstly, what do we expect from the right software management?

Secondly, who is able to ensure that?

Answering the first question is quite easy as it does not entail focusing on any specific system functionalities, integration, or other elements but on the expected output, how frequent such information should be generated or modified etc., i.e. standard operating activities, same as in many other areas.

Selection of the partner may be more challenging. It is worth remembering that by concluding an agreement the company declares that will be cooperating with the partner for the next 2-3 years. One way out is to set high standards relating to partner’s financial liquidity, competencies, testimonials (not only the ones submitted in writing but also the ones verified by us) and the team dealing with the software management area.

All in all, our objective is not to implement and maintain solutions delivered by an X or Y company but to optimize costs, ensure license compliance and make informed decisions. Since this is not the key area of our operations it may be worth delegating this task to a highly specialized company that will do it better, faster and cheaper. Software-related costs account for 20-40% of the IT budget and thus more and more companies decide to delegate software management to specialists.

Software Asset Management

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