The Risks and Reasons Behind Software Asset Management

October 10, 2017
Quincy Johnson

Author

Quincy Johnson

Digital Marketing Specialist

Software Asset Management (SAM) is a complex process. However, with the right people, processes and tools your organization can be at the forefront of this important management process. Software Asset Management has multiple components to it and each are important in their own way. Things like procurement costs, software compliance and software maintenance all contribute to the overall health of your software portfolio.

Let’s go through some of the main aspects of this crucial organizational initiative.

What is Software Asset Management?

Software Asset Management (SAM) is the business practice of managing and optimizing software applications within an organization. Management may include the procurement, deployment, maintenance, and even disposal of software.

What are the risks associated with not having a Software Asset Management program?  

It was estimated that in 2017 the world would spend $2.4 trillion on technology and software, up 2.4% from 2016.

It was estimated that in 2017 the world would spend $2.4 trillion on technology and software, up 2.4% from 2016. This is a significant increase in IT spend. With technology and software spending on the rise, businesses without a SAM program are taking risks that could impact both their reputation and bottom line. Some of these risks include:

Noncompliance

One of the first risks often associated with not having a SAM program is noncompliance. Gartner estimates that 68% of enterprises get audited at least once a year. Most organizations don’t realize how often software audits happen and if the organization is in violation of the software usage agreement, they can be hit with hefty fines for that violation.

In 2013, the software firm Apptricity won a lawsuit against the U.S. Army for software noncompliance. Apptricity claimed that the Army was using their software on far more military bases than they claimed. The U.S. Army was found to be noncompliant with their license agreement and ordered to pay $50 million.

Management programs help protect companies from costly mistakes by doing the following:

  • Identifying under or over used software licenses
  • Determining what licenses you currently have versus the ones you actually need
  • Acquiring the licenses you need to stay compliant
  • Avoiding spend on software when paid-for software already exists on the shelf, known as software re-harvesting (according to one report, 37% of software deployed is unused – not having been used in 90 days)

 Extra Costs

Another risk is simply wasting money on software procurement that isn’t needed. In fact, over the course of a four year study, it was estimated that the U.S. wasted more than $30 billion on unused software.

When multiple departments within an organization are allowed to purchase the software they feel they need, then it’s likely that many software purchases will overlap within the company. A centralized management program ensures that the software being used is unique and doesn’t overlap.

Software Non-use

IT budgets are often wasted on software that isn’t used, something that can be avoided with proper Software Asset Management. Many companies find that employees aren’t using the software they’ve spent thousands of dollars on simply because they don’t need it or worse, don’t know how to use it.

Why do you need Software Asset Management?

SAM might not be a priority to your organization but it should be. An organization without proper asset management takes unnecessary risks and having the right management program in place ensures the following things:

Management & Security

Security is a topic that has been top of mind for years, and is only becoming more important as companies move applications and data to the cloud. It’s important to have all IT systems recorded for the purpose of management and security. Each device that might be using software also needs to be maintained to eliminate security risks. SAM assists in the security and maintenance of software by:

  • Preventing cyber-attacks that could leak customer information or other sensitive materials, thus damaging the company’s reputation and costing them more money
  • Preventing unauthorized/rogue software from being installed on devices
  • Maintaining a catalog of authorized software

Cost

A management program impacts your bottom line as well. Improper management will ultimately cost you more money because no one is managing what software is being used regularly and what software you can eliminate. You might find that a costly software you have a license to isn’t being used at all, meaning this is a cost that can be avoided.

Support

Some software vendors provide ongoing software support to your IT department, which usually includes assistance for technical issues or for general questions about the software itself. Often, support services are able to keep your software up to date and even troubleshoot problems.

Why Software Asset Management should go beyond a one-time audit defense

A one-time audit defense is what happens when companies are only concerned about being audited. They base their entire software management program around defending themselves against an audit.

Audits are certainly something to be concerned about when it comes to SAM. Keeping yourself safe from these costly investigations into your company is very serious. However, what’s often overlooked is the importance of an organizational system when it comes to SAM. Your company should know what software it has licenses to, who is using it, what devices are using it, and how much money your company is spending on it.

You have many things to be concerned about when running a company and software assets should certainly be in the top 10. A management program is a great way to ensure that your organization is getting the most out of its software as well as maintaining compliance.

Final Thoughts

Software Asset Management is an area that should be a top priority for any organization. Next to your employees, software is one of the biggest assets your company can invest in. Addressing software compliance issues and choosing the right software to procure all while saving money is what a great management program can do.

For organizations looking to accelerate the value of their SAM practice, Software Asset Management as a managed service may make the most sense. Learn more about our SAMSimple offering to find out how we can work together to help enhance your SAM practice.

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