Practice responsible for managing software assets in the company is Software Asset Management (SAM). It focuses on managing software assets (products, licenses etc.) throughout their lifecycle. Today it’s almost impossible to drive a company without usage of some kind of software whether it’ll be payroll system or CAD solution. SAM involves various activities like:
- Software Inventory – identifying and cataloguing all software installed on organization’s servers, computers and other devices.
- License Management – tracking and managing software licenses, including their entitlements, expiration dates and usage rights.
- Compliance Monitoring – ensuring that software usage is in compliance with licensing agreements, copyright laws and other legal or regulatory requirements.
- Usage Optimization – analysing data on software usage to identify opportunities to optimise license usage, reduce costs and improve efficiency
- Retirement Planning – planning for the retirement and disposal of software that is no longer needed or supported.
What’s the value?
Managing software in your company can provide many benefits. We’ve elaborated on some of them below. It shows how many areas of an enterprise can be positively affected by proper management of software assets.
1. Cost Savings
SAM can help organizations save money by identifying unused or underutilized software licenses, allowing them to avoid unnecessary purchases and ensure that they are only paying for the software that they actually need.
It will also provide you with necessary insight on software contract negotiations. Did you know that for some of the software vendors you can get up to 90% discounts if you know your ways into their licensing models and structures?
2. Compliance
SAM can help organizations ensure that they are in compliance with software licensing agreements and regulations, reducing the risk of legal and financial penalties for noncompliance.
It’s always a hot discussion topic when it comes to risks and their probabilities; however, proper clauses, insight into later setup of the software and measurements can save you from huge penalties that may come during an audit by software’s manufacturer.
3. Improved Security
SAM can help organizations improve their cybersecurity by identifying and addressing vulnerabilities in software applications, ensuring that patches and updates are applied in a timely manner, and reducing the risk of security breaches.
With hundreds if not thousands of software products being in use in your company, it is crucial to have insight and control which product versions and patch levels are out there. Especially if you must use some outdated software due to legal or customer requirements.
4. Improved Efficiency
SAM can help organizations streamline their software procurement and management processes, reducing the time and effort required to manage software licenses and ensuring that software is available when it is needed.
As always, efficient processes and automation are keys to success when it comes to management of such vast area like software assets. With good SAM practice you can vast amount of work and focus on critical areas supporting your company’s strategy and act as business enabler in this digital era.
5. Better Decision Making
SAM can provide organizations with valuable insights into their software usage and spending patterns, enabling them to make informed decisions about future software purchases and investments.
What you need to have in mind is that managing software assets is not only about cost reduction during negotiations, but also providing insight into the future of the software in the company e.g. by gathering information on when the software product is going to be discontinued or if manufacturer has been acquired by another company which may influence your long term vendor dependency plans.
6. Better Vendor Management
SAM can help organizations manage their relationships with software vendors more effectively, ensuring that they are getting the best possible value from their software investments and negotiating better licensing agreements.
Insight into potential alternative products, usage patterns or trends and knowledge of licensing models can be invaluable information that can shift the balance of negotiations in your favour.
7. Reduced Risk of Audit Failures
By maintaining accurate records of software licenses and usage, SAM can help organizations reduce the risk of audit failures, which can be costly in terms of both time and money.
During audits you must be able to provide proof of licensing and accurate metrics from your environment to show compliance with licensing terms and agreement. However, proper SAM can even stop the audit before it even fully starts by providing, so good data that there will be no case for the vendor to spend time and resources on investigation of your company.
8. Increased Productivity
SAM can help organizations increase productivity by ensuring that employees have access to the software they need to do their jobs, and that the software is properly configured and optimized for their specific needs.
With tens of thousands of software products out there it is hard to find the perfect tool for your organisation and employees. SAM not only helps to choose the tool which has the best fit, but maybe even more importantly makes sure that it’s available and advertised internally, so when employees are looking for software to solve their needs, they will use your standards.
9. Improved Asset Management
SAM can help organizations improve their overall asset management processes by providing a centralized view of all software assets, including licenses, usage data, and maintenance records.
Software is only one among many IT assets that modern company needs to manage. Not to mention, that there are plenty of other assets outside the IT area to manage. That’s why it’s important to have easy access to information and transparent overview of your software assets and that’s where SAM comes in.
10. Better Budget Planning
By providing detailed information about software usage and spending, SAM can help organizations plan their IT budgets more effectively and ensure that they are allocating resources to the areas of greatest need.
Software is ever growing position in company’s budget. To keep it under control and avoid situations like “We’re renewing this agreement, because it has always been here.” SAM is there to help. Even so seemingly obvious things like distribution of renewals throughout the year or splitting payments can have big impact on your baseline as e.g. you can invest money throughout the year before you will need to pay next instalment of the software contract.
11. Environmental Benefits
SAM can help organizations reduce their environmental impact by reducing the amount of energy and resources required to manage and maintain software assets, and by ensuring that software is properly disposed of at the end of its life cycle.
Although it may not be obvious at a first glance, software also leaves carbon footprint. All underutilized or unused systems which consume energy in datacentres are wasting precious energy. Also, even though shrink-wrapped versions are old days, still there are areas or countries where they are still used and need to be utilized properly.
12. Improved Collaboration
SAM can help organizations improve collaboration between different teams and departments by ensuring that they have access to the same software applications and versions, reducing compatibility issues and facilitating better communication.
What can be more annoying if not finding out that you’ve spent money on software which is duplicating what you already have or finding out that something is not working because two instances have different versions of software which are not compatible. You can avoid it by thorough asset management and keeping track of your software portfolio in the company.
13. Better Risk Management
SAM can help organizations manage the risks associated with software usage, such as security vulnerabilities and data breaches, by ensuring that software is properly configured and up-to-date, and that employees are trained on best practices for software usage and security.
Everyone aims to have up-to-date software; however, it’s impossible to achieve if you don’t know what and where you have it. Additionally, there are cases when you must use outdated or older versions of software due to government, customer or technical dependencies. In such cases it’s crucial to know and control such exceptions.
14. Increased Flexibility
SAM can help organizations increase their flexibility by enabling them to easily adapt to changing business needs and technology trends, such as the shift to cloud-based software and subscription-based licensing models.
Continuous management of software assets enables you to actively adjust contracts and work with vendors on licensing models. Imagine being in a position where your strategy is blocked because you are limited by multiyear contract on crucial software and vendor does not want to negotiate due to terms on which you’ve agreed when signing the agreement.
15. Improved Customer Satisfaction
SAM can help organizations improve customer satisfaction by ensuring that software is properly licensed and configured, reducing downtime and other issues that can negatively impact the customer experience.
There are multiple cases of simple license mishandling like it happened in one of refineries where it was fully shut down due to expired license key on crucial server. All that was needed to avoid such disaster was to properly configure license server, so it would renew automatically.
16. Better Control and Governance
SAM can help organizations improve control and governance over their software assets by establishing policies and procedures for software procurement, usage, and disposal, and by providing centralized oversight and reporting.
As the complexity grows, need for transparency and governance grows as well. You need to have process based solutions to act proactively and not reactively as soon you’ll be overwhelmed with amount of work, exceptions handling and chaos.
17. Enhanced Transparency
SAM can help organizations increase transparency around their software usage and spending, providing stakeholders with detailed information about software assets, licenses, and usage patterns.
Simply put “Money talks.” and you need to be able to show who is spending, how much and on what to enable educated decisions and enable the organisation to be able to actively optimise their software usage or spent.
18. Better Asset Utilization
SAM can help organizations better utilize their software assets by identifying unused or underutilized licenses, enabling them to reallocate resources to other areas of the business where they are needed.
Proactive management of licenses not only will save you money as you won’t have to buy more licenses, but will also reduce manhours spent on waiting to get access to software, negotiating additional licenses or processing purchases.
19. Reduced Maintenance Costs
SAM can help organizations reduce the costs associated with software maintenance and support by ensuring that software is properly licensed and configured, reducing the risk of downtime and other issues that can increase support costs.
Do you know where is the best money for the software manufacturers? In maintenance contracts. Often they’re not matching company’s needs and are underutilized. However, there is also savings waiting in maintenance done by your organisation. Less incidents and automated delivery of software will also save you a lot of manhours.
20. Improved Disaster Recovery
SAM can help organizations improve their disaster recovery capabilities by ensuring that software is properly backed up and that licenses and entitlements are properly documented and tracked.
A nightmare scenario is when there was a disaster and when you start to bring back the system, you find out that there are no installation files or license keys at hand. Everyone start to run around and figure out how to get them. That’s where SAM comes in by managing all licenses, entitlements and installation files.
Summary
Overall, Software Asset Management provides a wide range of benefits that can help organizations optimize their software usage, reduce costs, and manage risks. By implementing a SAM program, organizations can achieve greater efficiency, control, and transparency over their software assets, while also improving compliance, security, and vendor relationships.
Next step is to find out how to do Software Asset Management and where to start.
