UK Government budget highlights need for SAM
Today in the UK is ‘Budget Day’, the day when the Chancellor
of the Exchequer announces the Governments’ spending, borrowing and taxation
plans for the next financial period. It’s a day many managers within the UK
public sector will be dreading – with leaks already suggesting that the
Chancellor is going to announce the need to make £2.5 billion (US $3.8bn) in
departmental spending savings in order to protect and boost spending in other
The £2.5bn figure equates to a further 2% reduction of
departmental spending across the UK public sector (on top of 3% already
announced). This news has led many public sector employees in the UK to
walking out on their jobs today, in protest at pay and conditions.
This news reminded us at License Dashboard of a project we
were involved in back in mid-2011, run by the Cabinet Office and called the
Innovation Launch Pad initiative. As part of this program, we estimated
that the UK Government could save around £50 million by implementing at
Government-wide Software Asset Management (SAM) program.
OK, that’s not quite £2.5bn, but wouldn’t most of us prefer
our Governments save money through spending more wisely than cutting pay and
benefits to workers in the public sector? And it’s not like the UK
Government would lose out in any way. After all, the £50m reduction comes
from eliminating unnecessary over-spend!
Analyst firms like Gartner estimate that most organizations
over-spend on around 65% of their software estate, and that SAM and ITAM
initiatives can save as much as 30% of the overall IT budget in year one, with
ongoing annual savings of 5-10%.
This isn’t to say that public sector organizations in the UK
are blind to the issue. Many individual departments, NHS Trusts, local
councils etc. have made steps to better manage their software – but in most
cases this is being done on a micro scale, rather than a macro level.
That’s why we believe that the savings that are being realized by these
smaller-scale projects are just the tip of the software cost-reduction iceberg.
There’s no doubt that finding £2.5bn in spending savings is
going to be a tough and unpopular challenge – but the UK Government could do
far worse than putting efforts into a proven cost-saving program that, when
executed on a national scale – could deliver savings without affecting the
livelihoods of those working in the public sector.
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