Senior Writer: Rahul Jade
Every sector of the global economy relies on software to communicate, make products, offer services and manage operations. Keeping track of software assets can be a challenge, especially for large organizations. More divisions, more teams, and more projects mean more software.
Software Asset Management is the business strategy organizations use to protect themselves from software risks. It works by proactively controlling and automating procurement, usage, and deploying software licenses.
This blog covers all the nuances of SAM. Let us get started if you are ready to optimize technology costs and streamline business operations.
Why Is It Important To Manage Software Assets?
Businesses from nearly all industries continue to invest in Software as a Service (SaaS) and the numbers increase consistently.
Modern enterprises permit any user or department to acquire a software app. So, its visibility, price, and legal implications are difficult to monitor. Software asset management tools can reduce these risks.
Besides, preventing SaaS wastage is something that haunts nearly every company. Companies have SaaS applications that are charged monthly but remain unused. It is more common in enterprises with thousands of employees using several applications. The underutilized SaaS apps silently burn your budget and impact revenue.
Thus, you need a Software Asset Management platform to manage the use of your SaaS applications.
Challenges Involved In Managing Software Apps
You must be cautious when procuring and managing software licenses. It is tedious to track expired software licenses (if you still use on-premise software) and renews them from time to time.
The regulatory bodies monitor expired licenses closely and can hold you accountable for non-compliance. It will cost you hefty penalties and lawsuits.
It is common for companies to use spreadsheets for maintaining SaaS data. But spreadsheets increase your workload instead of reducing it. You need to update them every time a new software app enters your SaaS landscape. If you miss even one update, you will have inaccurate data in the spreadsheets.
Bad Relationship With Vendors
Maintaining a healthy relationship is crucial to the success of your business. SaaS vendor management is a complex process, and you cannot afford to change vendors often. Here is a snapshot of a SaaS vendor lifecycle.
The best asset management software will ensure transparency between you and the vendor. You can let the vendor know whether the app is operating at its maximum capacity or lying unused. Such software usage data can also help you negotiate with your vendors for better pricing during contract renewals.
Ineligibility For Technical Support Or Product Upgrades
Unlicensed software makes you ineligible for technical support from the software publisher. You are responsible for troubleshooting all technical issues in the unlicensed version. Also, you cannot access product upgrades for the respective software.
Software Asset Management (SAM) In Business Strategy
Modern IT organizations approach software asset management as an untapped opportunity to mitigate risks, cut costs, and add value to the business.
An effective SAM business strategy can enable CIOs to handle software portfolio life cycles. They can help the central IT team identify and properly manage risks that are usually ignored. It also helps manage complex contracts, extensive software licensing options, and changing usage rights.
The managed services approach is popular in a SAM business strategy. It lets IT enterprises follow a more disciplined approach using leading SAM technology platforms. They can access a global network of specialists in various software license subjects. And ultimately, they can deliver predictable outcomes to their end-users.
Like every business strategy, SAM consists of key components that make it successful. We will dive deeper into them and also discuss ITAM and ITSM in the upcoming sections of the blog.
03 Key Components Of A Successful Software Asset Management Strategy
Licenses are assets you should manage systematically. Each license contains specific terms and conditions regarding the installation and usage of the software product. Your job as a user is to ensure your company complies with the terms and conditions of the license agreement. Compliance is the backbone of SAM.
Investing in a SaaS license management tool as part of your SAM strategy can help you. It optimizes SaaS spending and reduces your SaaS wastage.
The vendors can conduct independent or third-party audits to check your compliance with the license agreement. They will check the software usage, its configuration, and other details.
Non-compliance can cost your organization unexpected fees. An audit also disrupts your business operations and can take months to complete. SAM tools simplify the audit process and ensure you stay compliant throughout the agreement.
There are many compliance standards, and ISO (International Organization for Standardization) is the most popular. Let us understand it briefly.
The ISO provides auditors with a set of guidelines to manage software assets. There are three sets of ISO SAM standards that you should be aware of:
It relates to a framework of processes that ensures an organization performs software asset management to an acceptable standard. It offers them a tool to ensure compliance with governance standards.
It is about software identification tags that identify the software instances (versions) installed at an organization. These tags can identify licensable software. ISO 19770-2 is popular among vendors as it helps in quick, easy, and accurate identification of the software.
It is about software entitlement tagging. ISO 19770-3 helps in identifying the applications having software licensing rights. This standard also helps in the daily management of SAM projects by automatically identifying the license metrics for applications having entitlement tags attached to them.
Some businesses are over-compliant because they have more licenses than they need. They want to over-pay upfront to reduce the audit risk. But they do not realize that they are losing money slowly.
You buy enough licenses to close the gap when you fail an audit, and vendors often tell you to pay back maintenance for the expired software licenses. It gets more expensive depending on the number of expired software licenses. You can eliminate such costs permanently using software management services.
Where Does SAM Fit In Your IT Business Strategy? (ITAM and ITSM)
We discussed earlier in the blog that it is not easy to keep track of software expenses in large organizations. Such a decentralized process leads to unnecessary IT spending.
IT Asset Management (ITAM) and IT Service Management (ITSM) are the two essential strategies for handling IT assets and services for a business. SAM is the soul of ITAM and ITSM.
Some organizations make the mistake of considering ITAM and ITSM as separate processes. But they are codependent on each other to ensure the success of your organization.
A centralized IT department can cut the expenses and monitor them using SAM and SaaS tools . It also helps make important decisions about IT sales and license allocations.
Benefits And Roles of SAM
Spend Management & Cost Savings
It is crucial to manage SaaS spend for long-term success. SAM can help you eliminate unused and underutilized apps. The best IT asset management software can save you millions of dollars in clearing unnecessary applications from your SaaS stack. Other perks of SAM include SaaS inventory management, rapid SaaS deployment, optimized SaaS usage, and patch management.
Cost Savings Through SAM: A Simple Use Case
Business Unit 1 wants software for 25 of its employees, but they check in with central IT before purchasing new licenses. Central IT uses a SAM tool to discover that Business Unit 2 has 45 software licenses, but they are using only 32 of them.
The central IT allocates the 13 unused licenses to Business Unit 1 and purchases only 12 new software licenses. Thus, SAM saved the cost of 13 additional software licenses and the maintenance costs. The following image explains the use case well.
How To Measure The Success Of Your SAM Strategy?
We know the competition is tough in the tech world. So it is not enough to implement SAM and forget it. We need KPIs (Key Performance Indicators) to understand if SAM is truly bringing success and value to your business. Let us go through the different metrics and their ways of measurement.
Input Data Metrics
Input data metrics help you assess the reliability of asset data. They eliminate the useless data and identify gaps for remediation.
A software license optimization tool depends on the input data of the IT tools like software and hardware assets present in your company. It stores data from multiple sources in a central asset management database.
Here are some examples of input data metrics:
- The number of activated devices in the current software and hardware inventory.
- The number of legitimate IT assets within a network.
- The number of active devices with duplicate or blank serial numbers.
These metrics measure the performance of software licensing models and the effectiveness of optimization programs.
- The number of commercial applications that do not have a license.
- The percentage of unused applications without a software license.
They measure the outcome of SAM and license optimization programs regarding their ROI.
- The number of unnecessary software removed proactively.
- The number of maintenance contracts not renewed.
- The number of software requests completed using the existing resources.
How To Get Started With Software Asset Management?
Document Procurement Process
Before implementing a SAM tool at your organization, you should understand how it helps you buy software licenses. Set up a standardized process and guidelines to procure and store software licenses and certificates.
Clean Up license Inventory
Create a centralized license database and move all your license and software agreements to the inventory. The database should let you access your licensing documents whenever you wish to. You may also appoint a dedicated license manager to take care of the inventory.
Catalog Software (System Of Record)
Use SAM’s discovery tools to enlist the software installed in your environment. Standardize software titles to match them with their respective licenses.
Determine The SaaS Usage
A Software Asset Management platform helps you understand the utilization of your software assets. You can use the data to reduce and eliminate shadow IT from your organization.
Manage licenses Efficiently
SAM tools ensure data transparency, and you can see whether you are under-licensed or over licensed. Such insights help you save money on newly-procured software licenses and reduce the audit risks.
Summing It Up
We can say that software asset management is a synonym for automation. You have our complete guide on using SAM tools to your advantage. We will summarize and end the blog with the benefits of software asset management:
- Alerts you to over usage of IT assets and non-compliance to license agreement.
- Simulation of your data center architecture and the resulting licensing costs.
- It informs you about high-risk configurations and lapses in the system.
- Suggests optimization options depending on your SaaS usage.
- SAM fills software requests with existing licenses.