HOW ENTERPRISES CAN SAVE MONEY ON SOFTWARE LICENSE INVESTMENT

Software license rationalisation strategies and software license auditing as part of your SAM (Software Asset Management) policies

Effective software license managment and auditing for your business

Shrinkwrapped software licenses are usually the area of biggest software license wastage in large organisations. While enterprise licenses and site and community software licenses might be rigorously asset managed and tracked, these ad hoc pay-as-you-go licenses tend to be much less stringently managed. Shrinkwrap-licensed software applications are least likely to be deployed consistently across the network, and more likely to be manual rather than automated installs and as such they often require micro management in order to bring them under SAM control. Consequently, shrinkwrapped license management is often the licensing area where the biggest wastage of investment occurs. With this in mind it is the intention of this article to suggest SAM strategies for making effective and substantial cost savings here, as well as outlining some of the basics of software application and license control procedures.

The first task should be to identify your areas of biggest spend for shrink wrapped licenses and then look for license usage wastage and license expenditure wastage. It may require a discrete, formally managed project to undertake this task, if you do not have a software installation ordering, deployment, metering or tracking system that is comprehensive, up-to-date and upon which you can perform queries. However, the end result in software license savings will probably be well worth the trouble.

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In order to improve your software license management and auditing efficiency, you now need to ask the following questions:

1. What are the biggest areas of shrinkwrapped license expenditure? If you can identify the top few of these, then start with these and aim to tackle areas where you can make the biggest software license savings and efficiency impacts first. This is the same SAM principle as bringing your enterprise licenses into order before your shrinkwrapped ones. Set off by addressing your biggest areas of single spend on software licensing, and work your way down in a granular fashion. There are some suggestions on common suspects for high shrinkwrap license spend below
   
   
2. Can unused software licenses be re-deployed to cover new software installation or deployment requests? If you have software license monitoring and software asset tracking facilities, then it is wise to make use of them to identify dormant licenses that can be redeployed across your business and migrated between users, departments, sites or business areas, rather than buying more. For enterprises and large organisations it is often the case that they over-purchase on software licenses rather than under-purchase, due to fear of covering themselves for software license compliancy. If this isn't stringently monitored and controlled, five and even six figure sums per annum could be leaking out of your organisation through many different holes in your SAM policy.
   
   
3. Is an enterprise license available that would reduce over all license expenditure? If you are already buying shrinkwrapped licenses in large quantities for a software application, it is wise to check whether the vendor offers an enterprise, site or community license which would work out cheaper for you.
   
   
4. What is the cost comparison of a license against a competitor's product? There may be a cheaper, or even extremely cheaper open source alterative out there that does the same job. If, when this application is installed, it is usually the users' first experience of the software, then there may be little impact in switching over to another software vendor. You can even offer choice at the point of order, between your usual application and a lower cost alternative. If business areas have control of their own software license budget then they have an incentive to give the cheaper alternative a try and see if it works for them.
   

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Deploy better value applications or offer alternative software packages:

Here are some common areas of high-volume purchase spend on high-cost shrink-wrapped software licenses for stand alone applications where software licensing costs could be reduced significantly.

1. Adobe Photoshop - a high end graphic design tool
2. Microsoft Visio - a diagramming tool often used in projects for product breakdown srtructures and product flow diagrams.
3. Microsoft Project - project management administration tool
4. Adobe Acrobat Standard or Professional - PDF creation and programming

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Notice that several of the above mentioned software applications come with a certain degree of kudos and status, that may cloud the user's view about the neccessity for having them. For instance, getting a copy of Photoshop carries an understanding on some level that the user has now made it in the world of graphic design and that there is something cool about that. In fact, many professional graphic designers use Photoshop for less than 10% of their work, and it also takes months even years of experience to use the package proficiently. Just dumping it on someone's computer, because they have requested it is often not a good idea, and there are many cheaper alternatives out there that may well be fit for purpose and more straightforward for unseasoned graphics designers to master.

Much the same could be said of Adobe Acrobat. It should be checked first what the user wants the software for and that Acrobat is in fact fit-for-purpose and not software expenditure and utility overkill. If the user intends to create pdfs from multiple sources, design pdf forms, or undertake pdf programming in sql and javascript, then Acrobat is the right package. If they simply want to be able to create pdfs from single files, then there are numerous cheaper and even free software alternatives on the market that will do the job.

Again, Microsoft Project is often as much of a status symbol as it is a useful project tool. It is sometimes a considerable ego massage for a member of staff when MS Project is installed on their desktop computer for the first time, as this makes them feel that they have now arrived in the prestigious world of projects. This, as for the above software applications, is largely due to good marketing on the part of the software vendors. All these peices of software have a certain buzz about them, that make users want them on their desk top. This is why it is especially important to challenge users at point-of-order about exactly what they intend to use the software for. In the case of MS Project, many successful project managers working on six and seven-figure projects actually use nothing but Microsoft Excel. It is also the case that MS Project is often concieved of as THE PROJECT, when in fact, the PEOPLE are the project, and many a project has failed regardless of whether or not MS Project was the project management tool of choice.

Where Microsoft Visio is concerned, Visio is often considered to be the industry standard package for projects diagramming. It is fairly common practice to rollout Visio to project teams as a matter of course. However, it should be properly checked which project team members will actually need diagramming facilities and to what level. It is not commonly known that Microsoft Word comes with diagramming facilities that are suitable for a lot of diagramming tasks. And, where more complicated tasks are concerned there are much cheaper and even free alternatives that should be considered as well.

Software and IT training Programmes

This may sound obvious, but it is actually pointless installing many applications for your users if they don't know how to use them. For new or uncommon software installations these should be backed up with some level of software training to complement your SAM strategy. Until this happens, the software will probably be pretty much dormant and the utility and functionality you paid for unharnessed. This represents a largely unmeasurable wastage in your software expenditure outlay, but it nonetheless needs managing.

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Software Application and License Control Procedures.

The key to enterprise level software license management is centralisation. There are numerous components in the software license and asset management lifecycle and centralisation is of fundamental importance to each of them. These are given below:

Establishing Software Asset Management (SAM) baseline

Before deploying a software asset or license tracking system it makes sense to establish a baseline of control and compliancy beforehand. This way, you have some idea of where you are starting off from and upon what benchmark you are improving. This will give you measurables, and enable you to chart your acheivements. Without centralised processes to control your software, however, establishing such a baseline will be difficult.

Cenralised software license procurement

Large companies often procure their software through several different channels, such as internal procurement, specialist third-party software procurement providers and third-party IT support providers. Ideally, these multiple channels should be joined up in terms of consistent processes and procedures, administration and record-keeping. This should be at least to the extent that centralised and standardised record keeping is implemented so that expenditure, numbers of licenses and types of license are straightforward to track and query. This can be done using something as simple as a spreadsheet on a shared network drive, or on an integrated business-to-business (B2B) CRM or ERP system.

Centralised software installation ordering

All orders from separate departments and business areas should ideally be directed to the same place or conducted on the same IT ordering system as part of your SAM strategy.

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A formal software ordering approval procedure

An effective software order and installation approval procedure is essential to keeping down unneccessary software licensing spend. Approvers should ideally have good knowledge of the software used in their department or business area, awareness of any alternatives available, an understanding of the competency of users to work with the packages they order, and be able to make approval decisions based on a business case.

A new software certification procedure

For all software introduced to the business, it should undergo a certification procedure on all the relevant pc builds within the company before it is cleared for deployment. This will provide risk management against unforseen incompatibilities, dependancies, and system requirements and so forth.

Centralised license asset tracking and license auditing

If your new license and asset tracking system is to be distributed across a LAN network, always remember to check load balancing tolerances and impact upon network performance prior to deployment. This turns out to be the stumbling block for many deployments. These systems entail a hefty outlay so, if possible, ask to run the system in a test environment before paying out any cash.

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Centralised software deployment across the LAN

There are countless systems on the market offering to provide this service. Some of them are well-established big names such as HP's Tivoli suite or Microsoft's SMS. Remedy/Smart is another useful system to consider implementing since it has both software asset tracking functionality as well as IT helpdesk facilities, making it ideal for centralised software controls to be implemented. Many other smaller vendors provide good solutions too, so with all this choice it is wise to make a list of exactly what functionality you require before you go shopping

Some key functionality in such a license and asset tracking system might be

1. Capable of installing incremental updates as needed
2. Capable of rolling back versions where required
3. Capable of uninstalling as well as installing across a network
4. Provides reports on software usage levels and dormancy
5. Provides reports on numbers of deployments of each software package
6. Provides statistics which include prices, and where figures remain accurate even when software license prices change over time

Chris Boswell, Leeds, June 2007

(You are free to reproduce any of the information in this article or part thereof, so long as the byline remains intact and a link is provided back to this page)

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