Is managing your software assets becoming a pain?
March 11, 2020
March 11, 2020
It’s time for a better approach to software asset management. Companies spend a lot on the software they use to conduct business—typically from 35% to 55% of their IT budget. For many, though, managing those software assets effectively can be compared to patients going to a doctor for treatment of pain. They know they’re in pain; they know where the pain is coming from; but they don’t know what is causing it nor exactly how to fix it.
So, consider a few software-related pain diagnostics:
These can be big problems for companies, and the stakes in effective software asset management can be high. Complex contracts, extensive software licensing options and changing usage rights, combined with a growing range of software titles and vendors, make it extremely difficult for an organization to stay compliant and optimized.
Improper use of software or failure to comply with license use rights can penalize the business, undermine its reputation and result in millions of dollars in penalties. Companies need to do a better job of controlling software costs, eliminating compliance risks, and optimizing their software licensing portfolio to meet business needs. Fortunately, industry-leading software asset methodologies and multiple tooling options now exist that enable companies to achieve optimized licensing agreements.
Phases in the journey
In Accenture’s experience, one way to begin is to pick one contract that is causing pain, then analyze and optimize that using leading analytic tools, supported by experts with extensive licensing knowledge and years of industry experience who understand the complexities of software asset management. In addition to the immediate benefits of the optimization, it’s a way to demonstrate value to corporate leadership. Consider a single contract costing, on average, $20 million per year. Taking two or three million off that is likely to get the C-suite’s attention. The savings can then also fuel additional software optimization activities.
With that momentum, companies can begin the next phase, which is to introduce more mature processes as well as automation and a software analytics program. Companies can also look at their infrastructure from a licensing standpoint as they migrate to a cloud platform.
Benefits of optimized software asset management
Benefits of a stronger and more comprehensive approach to software asset management include:
A Middle Eastern bank was able to realize several of these benefits through better software asset management. Working with Accenture, they identified millions in cost savings in less than six weeks by running full reconciliation of their licenses against inventory, eliminating unused and under-used licenses, and consolidating and bundling products. These actions resulted in a substantial reduction of the contract cost, allowing the bank to realize a 10X ROI on their investment.
Conclusion: Easing the pain of software asset management
Ongoing innovations will continue to revolutionize software asset management. Blockchain technology, for example, can simplify the traceability of licenses, and, therefore, the auditing function so all can see where each license is assigned. This has the potential to save organizations millions of dollars per year in the management of their software license portfolios. All in all, the methods and tools available to companies both now and in the future will go a long way toward easing the pain of software asset management.