What is Software Asset Management (SAM), and why is it important for all size businesses? SAM is the framework for managing the acquisition, deployment and retirement of software in order to fully leverage your company’s software investment. SAM is not just software licensing.
While software is traditionally the jurisdiction of the technology department, SAM is a company-wide responsibility. From the end-user who uses the software to the CEO responsible for ensuring growth plans include funding allocations to ensure users have the tools to do their jobs, every level of a company is responsible for and impacted by SAM.
I think everyone knows the heavy risks associated with being out of compliance with software licensing (and not simply the fines for copyright infringement). What is not as well known are the benefits that come from implementing SAM and being appropriately licensed.
The financial rewards for implementing SAM are dependent upon your company’s software purchasing practices. If your company makes it a practice to remain fully licensed, then the financial rewards can easily be 15% of your software costs. If your company does not purchase software to be compliant with licensing then it will cost you money, but it could easily be 20-30% less than if you simply attempted to become compliant without an assessment.
The benefits of SAM extend far beyond financial savings. Businesses that employ SAM can realize tremendous benefits through improved security, faster rollouts, better negotiating capabilities, better supported operations, and enhanced planning and forecasting capabilities -- not to mention the comfort of knowing that your company is appropriately licensed on all your software.
The first step to implementing SAM is to complete a SAM assessment to obtain a baseline and a plan for improvements.
A SAM assessment is typically comprised of: (a) a review of past purchases to identify the investment made and identify purchasing habits; (b) an inventory of what is installed on each machine; (c) a review of existing policies to ensure the company is protecting itself as well as educating its users appropriately; (d) a process review to identify the current process and any process improvements; (e) a gap analysis to determine a baseline between what is owned and what is deployed; and (f) a purchasing plan taking into consideration the company’s future planned growth or changes.
Generally, there are two different ways to perform a SAM assessment: in-house or outsourced. An in-house assessment typically completes only the inventory and a portion of the gap analysis. The primary reasons for this partial in-house assessment is lack of time and lack of knowledge. Outsourced solutions will depend upon the outsource partner. If the outsource partner is your re-seller, they will typically focus on the inventory, gap analysis and purchasing plan. However, businesses need to keep in mind that your re-seller is in the business of selling software. The other option for outsourcing is to use a firm that does not resell software and has an actual SAM practice. Using this type of firm will result in a full assessment being completed by an independent third party.
Cynthia Farren is the president of Cynthia Farren Consulting (CFC), an IT Consulting firm specializing in Software Asset Management. CFC is headquartered in California with offices in Colorado and Georgia. (www.cynthiafarren.com)
Friday, November 03, 2006
Saturday, September 16, 2006
Software Licensing - Is there someone to help?
It was over 12 years ago that I made the transition from Finance to IT. I was to take on the responsibility for managing the use and licensing of all software for a 1,200 person international firm.
Coming from a financial background, one of the things that first hit me was that we appeared to be purchasing our software in a very inefficient and expensive fashion. Taking on the challenge of resolving that problem led to a very interesting career choice.
During my explorations into managing our software licensing, several things became very apparent: (1) licensing and product use rights were very challenging topics to understand and there are far too many interpretations; (2) there are very few educational resources available from independent sources; and (3) there is a lot of money wasted by companies each year due to #1 and #2!
1) Licensing and Product Use Rights - I remember once a very basic product use rights I read for a little known piece of software...it basically said, "You have the right to install this on a single computer and use it for the purpose it was intended. You may not use it for any other purposes". I should have framed it, the pure simplicity was beautiful.
However; I also understand where the software publishers are coming from...we get more and more creative in the use of technology and it opens up more and more loopholes for someone to use software "technically" under the product use rights but definitely not within the intent of the product use rights. Therefore, we end up with pages of technicalities. Take away some of these technicalities and you will also take away some of our options - let me keep my options...I'll instead read all the small print.
2) Lack of independent educational resources - if you think about it, where did you get your knowledge about software licensing? Probably from a reseller or the software publisher. These are generally the same people telling us how to "save money" on managing our software. In general, I feel they do a pretty good job...but at the end of the day we have to remember that they are in the business of selling us software. Can I really rely on them to tell me how to save money and buy less? I think I can rely on them to tell me the basics, and to answer my questions truthfully...but I can't expect them to help me in a fashion that will cut into their profits. They are "for profit" organizations afterall.
Over the past several years there has been an increase in independent sources such as industry organizations and services consultants (a really good one is www.cynthiafarren.com - yes, that's a flagrant plug for my firm Cynthia Farren Consulting). Additionally, some of the discovery tools providers are now providing advice on asset management. The main thing to realize here is that a tool is not the full solution - albeit a much needed component.
Many of the frameworks now provide guidance, ITIL and COBIT (TM) and a new ISO standard are all available to help.
3) A lot of money is wasted each year - I've helped hundreds of companies implement software asset management plans. The one thing that is consistent across the board is that they were all spending too much money (per unit) on their software licensing. This equates to hundreds of thousands of dollars being wasted by an organization, and to no value. Software publishers will not buy back software you over purchased, resellers will not credit you back for software purchased under the wrong purchasing program, and you haven't bought a new business solution that will improve your business...you've simply paid too much for your general desktop software.
Most software publishers have volume licensing agreements. In general, these agreements do not have difficult restrictions - they simply require you to purchase a certain volume of software. In most cases this volume can be purchased over several years. What they do require is that you be in a position to know how much software you need.
If you're looking for help with your software licensing, you're in luck - compared to when I started there are many more sources of help. You might start off by first getting a history of what you've purchased over the past 3 years and then talk to your reseller about what volume agreements exist for the software you've bought in the past. Just remember, while they can be a great source of information, you might want to refine your knowledge with an independent source prior to making a commitment.
Do you have any stories or experiences of challenges you faced with software licensing? Please share them with me...
Coming from a financial background, one of the things that first hit me was that we appeared to be purchasing our software in a very inefficient and expensive fashion. Taking on the challenge of resolving that problem led to a very interesting career choice.
During my explorations into managing our software licensing, several things became very apparent: (1) licensing and product use rights were very challenging topics to understand and there are far too many interpretations; (2) there are very few educational resources available from independent sources; and (3) there is a lot of money wasted by companies each year due to #1 and #2!
1) Licensing and Product Use Rights - I remember once a very basic product use rights I read for a little known piece of software...it basically said, "You have the right to install this on a single computer and use it for the purpose it was intended. You may not use it for any other purposes". I should have framed it, the pure simplicity was beautiful.
However; I also understand where the software publishers are coming from...we get more and more creative in the use of technology and it opens up more and more loopholes for someone to use software "technically" under the product use rights but definitely not within the intent of the product use rights. Therefore, we end up with pages of technicalities. Take away some of these technicalities and you will also take away some of our options - let me keep my options...I'll instead read all the small print.
2) Lack of independent educational resources - if you think about it, where did you get your knowledge about software licensing? Probably from a reseller or the software publisher. These are generally the same people telling us how to "save money" on managing our software. In general, I feel they do a pretty good job...but at the end of the day we have to remember that they are in the business of selling us software. Can I really rely on them to tell me how to save money and buy less? I think I can rely on them to tell me the basics, and to answer my questions truthfully...but I can't expect them to help me in a fashion that will cut into their profits. They are "for profit" organizations afterall.
Over the past several years there has been an increase in independent sources such as industry organizations and services consultants (a really good one is www.cynthiafarren.com - yes, that's a flagrant plug for my firm Cynthia Farren Consulting). Additionally, some of the discovery tools providers are now providing advice on asset management. The main thing to realize here is that a tool is not the full solution - albeit a much needed component.
Many of the frameworks now provide guidance, ITIL and COBIT (TM) and a new ISO standard are all available to help.
3) A lot of money is wasted each year - I've helped hundreds of companies implement software asset management plans. The one thing that is consistent across the board is that they were all spending too much money (per unit) on their software licensing. This equates to hundreds of thousands of dollars being wasted by an organization, and to no value. Software publishers will not buy back software you over purchased, resellers will not credit you back for software purchased under the wrong purchasing program, and you haven't bought a new business solution that will improve your business...you've simply paid too much for your general desktop software.
Most software publishers have volume licensing agreements. In general, these agreements do not have difficult restrictions - they simply require you to purchase a certain volume of software. In most cases this volume can be purchased over several years. What they do require is that you be in a position to know how much software you need.
If you're looking for help with your software licensing, you're in luck - compared to when I started there are many more sources of help. You might start off by first getting a history of what you've purchased over the past 3 years and then talk to your reseller about what volume agreements exist for the software you've bought in the past. Just remember, while they can be a great source of information, you might want to refine your knowledge with an independent source prior to making a commitment.
Do you have any stories or experiences of challenges you faced with software licensing? Please share them with me...
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