When it comes to Software Asset Management are we living in a world of contradiction?
The beginning of the year brings with it a wave of new software mandates or best practice policies from IT research and advisory organizations such as Gartner and Forrester. It also brings factual industry spending forecasts based on market intelligence and trend analysis by financial and procurement analysts from corporations such as IDC.
Reading the reports individually, you would probably be comfortable with the message each document was written to convey, but take a step back to compare the key messages and they provoke a little more discussion.
Of course, when comparing such different entities as SAM best practice and financial market trends, we have to be mindful that at some stage you may be comparing apples and oranges. Therefore, it’s important to note that this review has been taken from a purely Software Asset Management (SAM) perspective and so will resonate with any SAM owner, software budget manager or customer facing solution specialist.
Discrepancies in Software Asset Management articles
IDC claims that IT spending will exceed a mind boggling $2.8tn in three years with the main contributor being the growth in acquiring software and investment being made in key areas such as network and analytics and delivery applications software.
On the other hand is Gartner’s “U.S. Federal Information Technology Acquisition Reform Act (FITARA) Compliance Requires a New Approach to Software Asset Management”. In this document the key recommendations align more to the traditional challenges and objectives of managing software.
According to the Gartner article, nothing has changed in terms of securing SAM sponsorship, and success still seems to come from persuading the correct level of authority, regardless of SAM being classified as governance or an operational activity. Clarifying authority and accountability over IT investments will enable the management of IT Assets throughout their lifecycle. In turn this will develop and improve management information (MI) to support accurate cost assignment, demand forecasting, asset consumption and optimization, therefore reducing or avoiding additional software costs.
The frustration begins
Here we begin to see the discrepancies. On one hand we have data to suggest that software investment will continue and actually increase, yet on the other we hear the primary objectives when implementing SAM include providing return on investment and drastically reducing spend. Both reside at polar opposites of the software investment spectrum with the SAM angle insinuating cash for additional software investment is limited.
One size does not fit all when it comes to comparing industries or sectors. Software budgets differ significantly between, say, a global pharmaceutical company and a local government authority. It’s fair to say however, that for many organizations the key objective when it comes to software spend in the current market is optimization of current investment – that is, they look to rationalize and avoid further costs, and save money short- and long-term across their software portfolio. Organizations that haven’t tasked their IT commercial or procurement teams to deliver cost saving initiatives in the coming financial year(s) are few and far between.
Controlling software investment to safeguard future spend
For those who respond to RFIs, wouldn’t it be refreshing if, in alliance with IDC’s spend forecast, organizations started to
go out to tender for SAM services based on how technology can recognize and control future software investment as well as the current software landscape?
When comparing SAM and software investment, what is the percentage of predicted software spend that is either unbudgeted or compulsory i.e. software spend based on non-compliance or as a result of a software vendor initiating its right to audit. What data forms the basis of these calculations? The
unbudgeted spend figure would be of most interest in terms of SAM due to the industry hitting an all-time audit high – there’s currently a 68% chance of a software vendor issuing an audit within a 12 month period according to Gartner.
What’s the actual impact on Software Asset Management?
Despite the conflicting messages, both the IDC and the Gartner articles will likely have a positive impact on software asset management. They simply refer to different stages
of the software lifecycle.
The predicted surge in software spend over the next three years implies that software is becoming the primary asset. Hardware inventory, due to its tangible nature, h
as traditionally been the focus of any ITAM’s program, but as organizations’ software portfolios constantly grow in size, value and complexity, the return on investment to track and manage software assets now dominates. There is still a clear dependency on tracking both asset types – due to capacity software license metrics the link between hardware and software is more prevalent than ever – but finally software in its numerous guises has surpassed its host.
This constant growth in an organization’s software portfolio will naturally raise questions around optimizing the investment and tracking and controlling the software. Exactly when these questions arise will depend on an organization’s SAM maturity level, but they will arrive. According to the Gartner article, this aligns with the current challenges the SAM industry is experiencing. Organizations must understand their existing IT Asset estate and drive value by having the ability to share trustworthy data on a regular basis. As a result, commercial stakeholders and IT Security are assisted in making strategic decisions. Nothing ground-breaking, but something that every organization with an interest in delivering proactive SAM strives for.
At what stage should SAM influence software spend?
In an ideal world, data revealed by effective software asset management would influence the purchase of any new software. That way, the SAM Team becomes an integral part of the software investment strategy working closely with the primary stakeholder such as the Procurement/Commercial Team, Enterprise Software Architect Teams and senior management. Together the departments work to decide whether or not the organization will be contributing to that predicted $2.8tn IT spend.Tags: SAM, Software Asset Management, Software Investment