7 Best Practices for Software Asset Management
The global software asset management market, according to a study, has been projected to grow up to USD 2.32 Billion in 2022. However, Gartner says, “budget constraints and a general lack of awareness among small and medium-sized enterprises are expected to be one of the major restraining factors for the adoption of software asset management solutions and practices”. In this blog, we’ll take a broad look at how to implement the above-mentioned software asset management best practices, which can help you save potentially millions of dollars in IT spendings.
Please note that software asset management is not to be confused with configuration management/inventory management as there is a widespread misconception that asset management and CMDB are one and the same, which has resulted in these two terms being used interchangeably. Our blog here helps clear the air and explains why it’s wrong to think they’re the same.
Why do you need Software Asset Management?
As organizations scale, their internal software asset estate grows exponentially and becomes complex to manage. The assets become highly dependent on each other and need a set of rigid processes for their governance. This demands the development of a well-crafted Software Asset Management (SAM) program — a core functional area of IT asset management, which focuses on minimizing IT costs, manual overhead and optimizing the usage of software assets in your organization.
SAM is a quintessential part of IT asset management and IT service management practices in enterprises. A typical software asset management program includes mitigating risks associated with software licenses and establishing a software inventory across devices, data centers, and the cloud. It also involves the evaluation and optimization of complex software license agreements and contracts and ensuring compliance.
Let’s say you already have a carefully crafted SAM program in place. Now how do you get the most out of your organization’s SAM strategy?
Best Practices for Software Asset Management
The following list of best practices can act as fundamental guidelines for your organization’s SAM strategy.
- Support from senior management
- Building the right SAM team
- Choosing the right SAM tool
- Measuring SAM success
- Categorizing software assets
- Recycling software licenses
- Being audit-ready
Let us now dive deeper into the 7 best practices for software asset management and how to implement them in your organization.
Support from senior management
In simple words, the senior-most leader of your software asset management program should be a C-level executive. This ensures that the stakeholders and key influencers in the decision-making processes of your organization are well-informed of your software asset management strategy. In most cases, these stakeholders lie outside your department and might not necessarily understand the importance of piloting a separate program for SAM (read: leaders from various IT departments, finance, and procurement). Gaining executive buy-in and endorsement can go a long way in implementing the SAM strategy in your organization. Engage with them in the early stages of the process, build a strong business case while highlighting cost savings, and communicate why a SAM strategy is necessary for achieving an optimal total cost of ownership.
Choosing the right tool
There are numerous tools in the market that tend to the software asset management needs of organizations of all sizes. Finding one that fits your unique needs in itself can be a tedious process. Before the selection process, ensure you ask yourself these basic questions:
Flexibility: Is the tool customizable? Does it offer integrations with the existing applications in your IT and business ecosystems?
Scalability: Does the tool allow for flawless service and support as the organization scales? Is it robust enough to operate across multi-cloud environments?
Software discovery: Does the SAM tool possess a powerful asset discovery tool that detects even virtual and mobile instances of software, and how easy is it to deploy in your environment?
License Management: How sophisticated are the software license management features in the tool? Does it cover license optimization, recycling, reminders for contract expiries, and managing vendor audit requests?
Measurement and Reporting: Can the tool measure the operational and financial metrics of your SAM program and present them? It should help SAM leaders derive insights and make informed business decisions.
If you’re interested, here are 5 simple tips to pick the right ITSM tool vendor.
Building the right SAM team
Great tech isn’t going to solve people problems. You might have invested hundreds of thousands of dollars on expensive cloud tools to manage your organization’s assets. But not having the right people at the right places, working towards the right objectives is the perfect recipe for an organizational black hole.
The primary goal of an effective SAM program is to minimize IT spends and mitigate risks. This demands a team of highly-skilled and experienced members especially when it comes to verifying licensing models and software entitlements, as they cannot be automated. An ideal software asset management team would consist of positions like Software Asset Administrator, SAM Analyst, Software Asset Manager, SAM Consultant, SAM Specialist, Director of SAM — some of which could be either permanent or contracted, depending on your organization’s limitations.
Software procurement entails different departments like IT, legal, finance, and procurement. Collaboration between teams, hierarchies, and partnerships is crucial when it comes to effective software asset management. SAM leaders should align themselves with their organization’s SAM goals, encourage and motivate their teams to perform at their full potential with a strong emphasis on collaboration, and ensure they all speak the common language.
Measuring SAM success
Set up initial KPIs to measure the success of your SAM strategy. This helps you communicate your key software asset management successes to stakeholders and the entire organization. Here are a few metrics that you can track:
- Software utilization rate: The percentage of software products currently in use by the business.
- The ratio of the total number of software licenses and the number of unused licenses.
- The percentage and monetary value of licenses that the SAM team recycles periodically.
Categorizing software assets
Use the discovery/probe and inventory features of your software asset management tool to build a list of all the existing software assets in your organization—open source, licensed, and customized software alike. Sometimes, the creation of virtual machines in your IT environment may create duplicate instances of software. Note that it’s easy to miss software programs like these. Once you’ve inventoried all the software assets, you can then categorize them into three major buckets.
- High priority – Software assets with the highest business implications, license costs, or compliance risks.
- Low priority – This includes (license) free software programs that do not impact IT costs.
- Blacklisted – Malware and software programs that are prohibited.
This categorization will help you gain a clear idea of what software assets you own and how much of it is being utilized efficiently.
Recycling software licenses
Recycling software licenses essentially prevents your procurement team from purchasing new licenses, thereby cutting down software spends and supporting maintenance costs. For example, when an employee leaves the company, their existing software licenses can be recycled and assigned to a new employee, instead of releasing the license. In other cases, a user may have a software program installed but never actually use it. Recycling software licenses is quite common in high maturity IT organizations where there are rigid process controls. But even organizations with low maturity levels can slash their IT spends significantly through license optimization processes.
Software audits are on the rise. Bad audits can not only attract hefty fines but also tarnish a company’s reputation. It is important to note that there is no such thing as too small a software for an audit. Hence, your SAM program should always stay on top and ensure that your organization is always audit-ready. As preparation, you can perform the following analyses:
- Gap analysis – To identify the software assets currently in use within your organization, and those without licenses.
- Compliance analysis – To list out the over-licensed and under-licensed software
This comprehensive gap and compliance analyses also ensure that your organization’s software asset management program complies with SAM ISO 19770-1, ISO 19770-2, and ISO 19770-3 standards. Performing these analyses from your end will give you insights into how software assets in your company are configured and utilized. Using this data, you can avoid over and under-licensing your purchases, thereby optimizing the configurations for your software assets and being audit-ready.
Organizations that can efficiently manage their software assets can have a significant cost advantage over their counterparts. But for this goal to attain fruition, a non-ambiguous and well planned SAM program that clearly defines roles and responsibilities should be implemented and managed by a team of experts. The 7 software asset management best practices described in this blog post should give you a clear idea of how to extract the maximum benefits from your existing SAM strategy, or even fine-tune a few processes. While the adoption of these software asset management best practices might not happen overnight, they can still be realized pretty quickly, provided you have the right people with the right skill set, and an org-wide mindset to adapt to a major cultural shift.
Freshservice, a cloud ITSM solution developed by Freshworks, helps businesses successfully implement software asset management best practices in their organizations that are tailor-made to their IT environment. Drop me an email here and I’d be glad to help you understand how we do it.
Blog cover by Swetha Kanithi
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