WHITEPAPER | March | 2014 www.beroeinc.com
Effective and Efficient SAM execution to
manage software Spend and Compliance
Abstract
Yes, Software is a critical asset for any type of industries which plays a vital role in determine the enterprise IT investments. Software asset management (SAM) was one of the critical factors that were hit frequently in an enterprise level discussion to manage these software’s. SAM was a well-established “concept” and exists among organizations for a long period of time, since the era of automation and innovation evolved through multiple software applications. The reason why we quoted a term “Concept”, because it is still exists as a concept rather than an effective practice with in many organizations. This white paper is significantly important for IT/SAM mangers who faces multiple challenges during audit and cost saving objectives, even though the enterprises have a SAM best practices in place with in organizations. We also cover an important component the “GAP” that stops the enterprises to implement an effective SAM and the efficient ways to overcome the gaps and their level of criticality.
Problem Statement & Solution:
In general, Enterprises runs hundreds of applications for multiple different operations and departments with various license terms which always a challenging task for the SAM managers which can end up in unexpected risks and cost challenges. Many organizations believe deploying a SAM software tools available in the market can bring compliance and asset management capabilities. But I would say it is not a reliable statement?
SAM tools can be capable of identify the potential waste and
noncompliance, but they are not mandated to prevent the SAM challenges and criticality.
Organizations also face challenges in recognizing the software’s such as
accumulating all the date environments which can end up in incomplete reporting and connecting of multiple environments such as virtualization etc.
SAM tools also face problems in bundling software products. In multiple
scenarios, bundling deals in terms of contract specific aspects which perform outside of the tool capabilities.
Recent times, increased in adoption of Bring Your Own Device (BYOD) and
cloud can make the organizations SAM process more challenging even without their knowledge
Organizations which do not have an effective Software Asset Management
(SAM) strategy typically may over spend on software contracts & licensing by around 20%
The organizations requires an in depth understanding of their business models, functionalities, organization requirements in terms of their software utilization such as software’s product knowledge which includes licensing & integrating SAM with other systems and business functionalities such as financing and procurement, nevertheless the
appropriate best practices and the right SAM software tools. Many a times, the organizations under estimate the procedures for achieving the successful SAM. The solution is completely focused on the “Current” SAM problems and the possible mitigations in the existing SAM system, rather than talking about the SAM industry best practices, where most organizations are aware of it.
The solution for “Why Large Enterprises still struggle to implement Effective and Efficient SAM in place” can be addressed by the following approach,
The whitepaper also talks about the possible gaps in existing current SAM system, a detailed approach to overcome the gaps in the existing SAM best practices and nevertheless, it is also equally important for the organizations to analyze the pulse of the software vendors to avoid non-compliance and penalties. So the understanding on what basis the software vendors will perform a software audit is also a major factor that the organizations should be aware of.
How current software asset management works?
The possibility of identifying the SAM gaps can be done under three categories such as people, process and technology. Let’s discuss these three parts of SAM in detail and can explore on the major risk and gaps within these three categories.
Know the people value in SAM Execution:
For achieving successful software asset management requires a skill based resource which is also very limited in market. Without “people” accumulating enormous amount of SAM data alone cannot produce effective SAM process. So the organizations are ready to outsource their SAM operations to third parties for ensuring the complete reliability, experience and skill set in handling decision making and licensing.
The issues with the SAM process are missing the link and not realizing the dependability of multiple functionalities of the organization with SAM process such as Business unit and procurement team. The below representation indicates the critical sections and the dependability of people with in organizations in achieving the effective SAM.
Never underestimate your SAM process:
A basic & successful SAM initiative is not based on generic best practices, but instead on very basic documentation & process management techniques.
The errors of our ways are the assumption that SAM can bring License Management; by design it can't. BUT License Management (can you say audit?) can be inflection point that brings about effective and supported SAM!
The process of SAM was a matured concept and the awareness and importance was very much realized by the large enterprises. At this point, we need to concentrate on our missing areas in our SAM strategy which ultimately will leave a gap in achieving effective SAM. The following factors should be considered to overcome SAM gaps in process,
License & Compliance Standpoint
Software Vendor Vs Software Audit Standpoint
Software Vendor Standpoint
End of the day the SAM – License and Compliance Management required tackling the software vendor audits to avoid penalties. Let’s see the SV perspective and findings which they found during their software audit, since it is equally important for the enterprise to empathize themselves.
The top ISV expects to involve in software auditing are Microsoft, Adobe, Autodesk, Oracle, and SAP. “Revenue” is the factor driving the software vendors to audit
ISV considers the organization size as a major factor in choosing the organizations for software auditing. Apart from these factors ISV consider inconsistency in purchasing
patterns, non-satisfactory of previous compliance audit, Recent mergers and acquisitions, global presence for software audit
ISV found that the enterprises are struggling in audit due to non-understanding and
interpreting the license agreements, IT environment & contract complexity and Purchase Vs Usage, Lack of concentration during M&A.
Software Vendor Standpoint is important and critical for the organizations to understand and be ready for the software audit, because many enterprises fail in software audit even though they have a SAM in place.
In performing software inventory, the enterprise should be capable of establishing the
certain protocol to inventorying the data by individual machine, Active Directory organization, or through aggregate by software publisher. As mentioned above in managing people in SAM the software inventory should have an extensive communication between requirement and licenses ordering which can also overcome the lack of control the purchase. The inventory should be automated to make the process more centralized such as information on product title and version, Type of manufacturer, number of licenses purchased, date of purchase, and Purchase order or invoice number rather than handing over to multiple business unit or procurement team.
Software metering should be capable of prioritizing the usage such as what level of the
particular software is utilized and what types of employees are using it and how frequently it is used? The organizations typically might require thirty to forty days to monitor the usage patterns (by employee/department/frequency) but the time consumed for metering may vary based on the type and level of the software applications. By determining the product usage rights, license and renewal dates the organization should be considered for software metering which require product license start and expiry date which should also consider the updates and up gradations made between these times
Software metering records (product usage rights, license and renewal dates) should be compared with inventory products which can give a clear picture on purchased licenses whether it is over ruled the compliance or increase in spending.
Continuous monitoring required for an effective SAM deployment. Many organizations will lose their tracking on licensing and upgrading the license at the right time, since they are subjected to change, so the centralized and automated approach can be able to solve this change management activity.
Technology – Do SAM tools is enough for executing SAM in Enterprises?
Software Asset Management tools exist in the market is a vital factor in supporting the enterprise SAM process. But completely relying on these tools seems to be not a good approach. Here it is why your software asset management tools may not perform better than you expect?
Specific license management requirements such as MS Core/PROC/CAL SQL Licenses, IBM PVU license, Adobe upgrade logic, concurrent usage rights or Software Assurance limitations etc. are not covered in major SAM/ITIL framework. But the truth is they really cannot be covered, since licenses are similar to moving targets.
There are standard procedures and SAM tools to optimize license management. The major part is to ensure that the SAM tool really has the smartness to perform license reconciliation to do license management.
The common failure points in executing the SAM are,
Organizations are trying to find an inventory/SAM tool that can inventory “everything” (versus taking a federated approach and using multiple 'tools' that enterprises probably already have)
Executing “how” to match software inventory & licenses owned by understanding the specific rules/algorithms that the vendor declares for license requirements
Most of the tools are Window-centric and so they leave big gaps in Linux/Unix. More significantly, they try to do compliance by adding up all licenses on one side and a count of instances on the other and if instances < licenses, then they say it is compliant!
Two problems here: First, license metrics like PVUs or Core Factors make plain counts virtually meaningless. But second, even with a tool that comes up with a PVU calculation, for the instance, if entitlements are not tracked to specific boxes then enterprise can't be certain about their SAM processes are accurate. It is analogous to showing similar balances in enterprise checking account and their check register, but not knowing specifically which checks have cleared. Even If the processes are flawed, enterprise may get lucky on compliance from time to time, but organization can't be confident about it.
By demanding the right requirement and understanding the major gaps that can occur in SAM tools based on above points, the organizations can bring down their failure rate, where 90 % of the of enterprises who initiated to address Software Asset Management using a SAM tool in 2012 risked failing in a license audit before 2014.
Conclusion:
By running through the words of Peter Drucker once said, “What gets measured, gets
managed.
The key for a successful SAM implementation requires effective and efficient people, process and technology management which can bring 5-30% savings through license and maintenance costs
By improving the efficiency in current SAM process (Inventory management and license management) expected to save 30% cost savings in the first year and between 5-10% annually with an effective continuation of software Asset Management (SAM) programme In organizations, attitude of many managers/executives and their level of disconnect becomes wider. It's only when we can minimize the power silo issues & bring together a multi-functional team of skilled personnel who have the visible backing of management, that can begin to progress forward toward effective asset management.
Organizations should need to closely monitor & control on their own documentation, distribution, and utilization frameworks. SAMs need to expect clear documentation as part of the supplier relationship, but they also must recognize that compliance is the ultimate responsibility of the enterprise that owns the systems. Software usage metering can be quick and easy to implement and will ensure that they buy the amount of software they actually need rather than what the vendors think they need. Relying on the suppliers to provide this data, while helpful, can create a false sense of security. It is better to refine enterprise internal controls.
