Software Asset Management (SAM) is quite a simple concept. It revolves around management and optimization of software assets through their life cycle, from purchase to disposal. However, not paying heed to this critical activity, can have dire consequences in the form of bad publicity and monetary implications.
There are several examples of challenges faced by organizations on account of weak SAM processes. As reported in 2016 by Business Insider, the US Navy was slapped with a US$600 million lawsuit for software piracy. Allegedly, the Navy had plans to roll-out 550,000 deployments of a data visualisation software, each license of which was worth more than US$1,000. The Navy was entitled to deploy a meagre 38. Needless to say, the consequences of this event can, and will only be negative for one of the most prestigious bodies of the United States Armed Forces. If avoiding such a situation is not enough to convince you of its importance, here are just some of the reasons that your organization needs good SAM practices:
Minimize your risks
Software licensing can involve multiple complexities. Clauses and metric definitions in software license agreements can be vague and terms of usage may often require analysis of intricacies. People often tend to ignore the fine print and a lack of knowledge and understanding of these terms causes organizations to deploy software that leads to non-compliance, irrespective of the intention. Implementing effective SAM practices, involves having a complete understanding of what the purchase of licenses actually entitles you to while monitoring usage. When you are aware of your software compliance position, contractual risks and in turn financial, reputational and security risks are accounted for and eliminated.
Optimize your usage, reduce your costs
Over-deployment of licenses is no doubt likely to set off alarms during an audit by a software vendor. On the other hand, not using the licenses that you are currently entitled to, optimally, implies wastage – your organization is spending more than it needs to. Effective SAM involves efficient usage of licenses and reduces costs incurred on licenses, thereby, increasing the Return on Investment (RoI) on procured software.
Invest wisely for future procurement
When effective SAM practices are in place, should the need arise to procure software in the future (and it invariably will), you will be able to make an informed decision about this investment. There will be no ambiguity surrounding the supply, demand or the terms and conditions of the actual commodity. This enables seamless growth and better control of an organization’s IT infrastructure.
Effective SAM benefits an organization as a whole. The Procurement team has a clear understanding of what is required, which puts them in a better position to negotiate a feasible deal. The CIO is better prepared for any potential audits, and can operate from a position of strength when dealing with software vendors. The management can accurately project the investment required for software. Last but not least, the IT team’s procedures are considerably simplified by the knowledge obtained through effective SAM.