Quantifying the Value of Software Asset Management

Executive Summary

Over the past few decades, employees have come to rely more and more heavily on software solutions to automate and enhance a variety of core business activities – from sales order entry and inventory tracking to payroll processing and financial reporting. As a result, companies of all sizes and across all industries now find themselves struggling to control the growing number of software applications installed on their servers and desktops. Studies show that the average employee PC has close to 150 software titles installed, including fixes, drivers, and service packs.

Software Asset Management (“SAM”) systems combine processes and technologies to improve the way software applications are utilized, tracked, and managed throughout all phases of their lifecycle. There are many advantages that can be achieved through the use of SAM. Improved application performance and increased productivity of both IT staff and end users are chief among them.

SAM offers significant financial benefits, lowering the total cost of software ownership and accelerating the return on software investment. According to Christopher Germann, senior research analyst at Gartner Group, “organizations can realize cost savings of between 5 percent and 35 percent by implementing focused software asset management practices."

This paper provides an overview of software asset management and its key benefits. Additionally, it highlights the areas where an SAM solution can deliver the most tangible, quantifiable cost savings to an organization. Readers will also learn how to calculate the potential return on investment (ROI) on SAM in order to present senior management with a compelling business case for the solution.

What is Software Asset Management?

Software applications have become a vital asset for today’s businesses, providing the foundation for employee productivity and output, and supporting mission-critical processes that drive operational efficiency and profitability. Companies spend more today on software than ever before. In fact, while tough economic times are impacting most other industries, software vendors are actually seeing their markets increase. Forrester Research predicts that global spending on software will reach $341 billion in 2008, a 9 percent increase over 2007.

As more and more software is purchased, companies must find better ways to justify and optimize their investments. Additionally, software is unique from other technology solutions, like hardware, because it is intangible, making it much harder to monitor, control, and manage.

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