Forrester: Control over your software assets has become a must

Despite the rising importance of software asset management, there is a lack of sufficient attention and funding being devoted to it.

The rising costs and potential risks associated with software purchase and use are a corporate concern.

As a result, enterprises should consider software asset management (SAM) capabilities as a “must-have” rather than a “nice-to-have” to gain control over their extensive and complex software assets.

To understand the state of SAM and the direction it will take, Forrester surveyed 200 IT infrastructure and operations decision-makers in partnership with the ITAM Review – an independent provider of IT asset management (ITAM) news and good practices.

Here is what we found: Despite increased corporate interest in SAM, driven by the need to reduce IT costs, the traditional barriers to adoption still hold true even though many organisations with formal SAM programmes cite financial benefits and mitigation of potential risks.

It is hard to think of a business process that is not wholly, or partly, dependent on technology, especially software. But as spend on software licences and software-as-a-service (SaaS) subscriptions increases, so do the costs and risks associated with software use.

Despite this, only 39% of all surveyed organisations have invested sufficient attention and resources on SAM. Consequently, many businesses have little insight into whether they are compliant or spending too much on software.

Since the early 2000s, risk-focused IT executives have voiced their concern over software compliance and the potential for supplier audits, large financial fines, damage to corporate reputation and even the imprisonment of company directors. But these concerns were not shared by the rest of the organisation, which viewed the technology available as too difficult and complex to justify. As a result, SAM was low priority on the IT management to-do list.

But this is starting to change as IT organisations realise their software estates and procurement and provisioning processes are in a state of under-management, if not mismanagement. This is particularly acute for IT executives responsible for software procurement, provisioning and operations from the datacentre to users.

As a result, these organisations are wasting a significant amount of their IT funding each year on licence procurement when they do not need to – typically on maintenance agreement costs for more licences than they actually use and supporting and hosting software that should have been decommissioned. All of this wasted time and money is caused by IT organisations not knowing what software they have paid for and what it is ultimately used for.

But it is important to realise that investing in SAM technology does not guarantee you will reduce your software spend. For example, if you are under-licensed, you will need to pay more for software to achieve a compliant state. If you combine compliance and optimisation, you have the opportunity to remove software wastage and avoid future software licence and maintenance spending.

While cost reduction drives SAM adoption, remember that software compliance is a legal imperative and the economic downturn has prompted software suppliers to step up audit programmes.

Overcoming the challenges

While the drivers for adopting SAM are clear — better risk and cost management — the issues or challenges associated with commencing SAM initiatives are not always as apparent. With 39% of organisations having implemented SAM and another 52% currently implementing – or planning to – within 12 months, now is the time to overcome known challenges.

Cloud now adds an extra degree of complexity. To date, SAM programmes are not keeping pace with technology change

Creating the business case for SAM and the necessary investment in people, processes and technology can be difficult – especially if the organisation has already undertaken ad hoc SAM work, using existing resources to cherry-pick SAM-related savings.

While most SAM suppliers offer a proof-of-concept and will help develop your business case during the sales process, in Forrester’s experience, the business case for additional resources is difficult, even in more stable economic conditions. The key is to tie your SAM vision into business goals to show how SAM will positively affect the business through lower cost and risk, not counting software installs.

SAM professionals are a scarce resource, but having the right people in SAM roles is critical to your success. While most software suppliers or third-party consultancy organisations provide organisations with fit-for-purpose SAM processes, recruiting or reskilling suitable employees can be problematic.

Moreover, SAM cannot be done by a part-time employee with other operational responsibilities — at best you will end up with a suboptimal SAM programme; at worst you will have an expensive SAM tool full of data that is rarely used. For many organisations, outsourcing SAM operations to benefit from third-party people, availability, skills and experience is an increasingly viable option.

As with most software solutions, one size does not fit all — so focus on what you actually need and avoid being enticed by cool capabilities that you may never use. Unfortunately, the temptation is often too great. Forrester has found that only 24% of organisations are happy with their SAM tool; yet only 12% of buyers plan to change their SAM solution in the next two years.

Not only does your new, or existing, SAM tool set need to reflect this ongoing change from discovery to optimisation, your SAM personnel will require sufficient knowledge of licensing models and entitlements to make informed decisions. This goes beyond sourcing fit-for-purpose people and into the realms of continuing training and education.

For example, virtualisation brought with it the dual issues of increasingly complex licensing and entitlement models, as well as increased difficulty in understanding what software is being used where. Cloud now adds an extra degree of complexity. To date, SAM programmes are not keeping pace with technology change.

Choosing the right tools

As IT departments increase their SAM maturity — usually where they have achieved some semblance of licence compliance — there is a desire to move from a state of quick wins and licence compliance to one of licence optimisation. To do this, organisations need tools that can gather inventory, perform application recognition, match inventory and purchase data and determine licence compliance. Tools must also provide capabilities to optimise licensing and manage application usage, software management (including automated provisioning and software metering) and robust reporting and audit facilities to make software-related decisions.

The unsanctioned use of personal devices in the workplace — from laptops and ultrabooks to tablets and smartphones — and the rise of corporate bring-your-own-device (BYOD) schemes come with their own software risks. If an employee uses a noncompliant device on corporate premises for corporate purposes — especially when scanned on the corporate network by inventory tools — then do not be surprised if a software supplier views the employer as having a liability for the licensing of the software on such devices.

To date, organisations have been slow to address the licensing implication of employee-sourced devices, with only 16% of 172 respondents saying their organisation does so.

Trying to accomplish too much too early, or everything at once, can be fatal. Start small and focus on specific areas, such as the workforce computing estate and mobile devices or datacentre assets and virtualised environments. Position your software asset management as a business opportunity, not IT, as you then have a much higher chance to gain a business buy-in.

And last, but not least, do not forget to measure where you started from to show your gain in maturity levels in your SAM programme. 

Eveline Oehrlich is vice-president and research director of infrastructure and operations at Forrester Research. This is an excerpt from the Forrester report: The state and direction of software asset management: 2012 to 2013 (March 2013)

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