January 27, 2009, 11:41 AM — Times are tough for IT departments. With the recession taking hold fast, CEOs must attempt to maximize revenue while reducing outgoings and often the IT department is the first to suffer cutbacks.
This approach creates two areas of risk for the IT function. First, that the harsh economic conditions will lead more vendors to audit end users for software compliance – and therefore the organization may face a cost to overcome any under-licensing of applications and operating systems. Second, the organization call ill-afford to spend more on software than it absolutely has to.
While it is easy to focus primarily on the threat of a fine for software non-compliance, the truth is that nearly every organization buys software – or pays for maintenance – that it simply doesn’t need. This can create a major over-spend that, when addressed, could present major savings to the IT budget.
It may sound straightforward but in truth, managing licenses is somewhat more demanding. Software Asset Management (SAM) offers the key to minimizing the risks associated with under-licensing as well as eliminating wasted software purchases or renewal of unfavourable maintenance contracts.
Starting SAM with a focus on discovery and license management requires four basic steps:
• Inventory of installed software assets
• Capture of license records
• Identification and Validation of records against vendor records
• Reconciliation of software installations against license entitlement
An organization’s first step into SAM should be to perform a baseline software inventory. This will determine what software is in use across the organization and whether installed applications are actually being used.
Inventorying all the assets on the network is the basic function of discovery and fortunately there are automated tools, which simplify this process and generate a quick, efficient and accurate record.
Once the inventory is complete, the next step is to capture all license records into a centralised license management system. This is much more effective than manual filing when it comes to producing compliance reports and deriving ‘business intelligence’ about current and future licensing needs. An automated solution will also minimise the chance for human error, as well as the time and resources needed to build and maintain the data repository.
Identification and Validation
Next, the organization must understand how the information they have collected relates to what they thought they had and what the software vendors think they have. Often there will be discrepancies between original invoices, installed software and future audits. There are solutions available which can aid this process by automatically comparing the collected information with vendor product catalogues.
Given the dynamic nature of most IT networks, software usage and license entitlements change on a near-daily basis. As such, it is critical that any reconciliation between software and licenses not only uses the latest information, but also has some built-in intelligence to understand and benefit from different licensing models.
In most cases, it is likely that both under and over-licensing of software will be identified. However, one major benefit of a proactive approach to SAM is that any under-licensing can be addressed before a vendor or licensing watchdog comes knocking on the door demanding recompense.
It is important not to underestimate the total value of managing new license procurement and maintenance contracts. One company in the utilities sector recently saved more than $45,000 a month on ad-hoc software purchases alone – just by identifying all new software installations and checking that they had gone through the correct licensing and procurement processes.
In a time of uncertainty, having full visibility of the software on the network not only gives IT professionals the peace of mind that they know what is happening, it can also deliver much-needed cost savings that can be used to fund high-priority initiatives.