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04/26/2016

How can a company turn a SAM tool investment into a real long-term asset?

BSA Software Alliance1 evaluated in 2013 the global piracy rate at 43%, and the software vendors’ loss at around 62.7 billion dollars. This situation led them to increase the frequency of compliance audits and Gartner revealed in a 2012 survey that 65% of the responding companies had been audited within the past year. Therefore, companies have been improving their Software Asset Management practices and equipping themselves with a tool to manage their licenses, check their compliance status and implement optimization plans.
A recent statement by Gartner confirms this phenomenon. In 2014 Gartner estimated that “By 2017, 20% of organizations will have implemented an SLOE (Software License Optimization and Entitlement Tool) up from >5% in 2014”
Ten years ago, Excel was still the most widely used tool to manage licenses. Today, with increasing pressure from vendors’ audits and more complex license metrics, the adoption of SAM solutions has become a must. However, selecting the right SAM tool that fits processes perfectly, addresses the specific needs and applications scope is no bed of roses. In addition, the estimation of costs and benefits, also based on qualitative criteria, can be a complex exercise.

How to estimate the Return on Investment of a SAM tool?

It is commonly advised to perform an assessment of current processes and available resources before deciding whether to invest in a SAM software solution. First of all, take your time to ponder carefully vendors’ promises without blindly trusting them in absence of evidence. In fact, the solutions they offer usually come at a high price and require deep organizational changes and the actual savings could be lower than expected.

Total costs of a SAM project may vary considerably from one company to another, based on the software scope to be managed and the size and complexity of the organization. As a reference, Sia Partners undertook a benchmark analysis in 2015 regarding large companies (average annual software budget of 30 million euros) and the cost of SAM projects turned out to fluctuate from 100,000 euros to over 1 million euros depending on their level of maturity. The most mature and efficient companies in terms of SAM practices (half of the companies in the benchmark) already implemented a SAM tool which represented an average 25% of the global project costs; the rest was allocated to internal manpower (on average 7.5 FTE involved in SAM operations) and service fees for implementation, set up and change management activities. These figures tell us that it is necessary to consider the global picture of the project and not only the licenses cost when implementing a SAM tool.

Different options are available when it comes to choosing SAM tools that accurately reflect your needs: do you want a software vendor’s best of breed or an open source tool? Do you need a tool to perform specialized SAM analysis and operations or a more generalist ITAM/ITSM solution that will predominantly help you discover your assets? In any case, it is necessary to check all the features available, verifying the alignment to your needs and specific context.

Vendors often advertise the short time to implement their solution, usually a few days depending on the tool and the required customizations. While these promises strongly depend on the tool selected and the complexity of the organization, this does not mean that you will have “ready-to-use” analysis and reports from day 1. Implementing a SAM tool is more a continuous process than a one-time shot project, and to get the best of it, it has to be regularly fed with clean data, contracts and purchase orders to obtain the historical view of the different license agreements. Be aware that in the beginning it might take you weeks to gather all the contractual documents covering the previous years, upload them, enter purchased quantities, configure settings and keep the records updated. In addition, you will probably have to plan additional man-days to integrate the SAM tool with existing applications or environments (such as ERP, CMDB, Active Directory, configuration manager, …) based on your technological landscape. According to Sia Partners, the estimated duration of implementing a functioning SAM process supported by a SAM tool is between 1 to 3 years, depending on the organization size, complexity, goals, software scope, data completeness and availability, etc. A gradual approach is recommended, focusing on the most critical software vendors first, and extending the scope once the SAM organization has proven concrete and successful results.

When selecting a SAM tool, not only the purchase price matters. To calculate the ROI, a variety of parameters has to be considered, such as:

Taking into account all these factors, it is key to understand the potential value and related advantages of implementing a SAM tool compared to deal manually with data collection and inventory keeping busy internal resources or external consultants.

In addition, costs are much easier to calculate than benefits. Being “audit ready” and confident about the software situation provide CIOs with a stronger position of power while negotiating with vendors. SAM tools may then prevent not only audit fees but also signing unfavorable long-term deals often offered to companies as a decent way to close an audit instead of paying penalties.

A tool brings added value by industrializing and automatizing SAM processes

Today the implementation of a SAM tool is a common topic of concern on the CIOs’ desk of many companies.

As previously stated, tools do not work by themselves and they need resources and processes in order to create added value. The key to success relies mostly on three key factors: 1/ the commitment of the top management, 2/ the capability and expertise of the core SAM team and 3/ the coordination and engagement with key internal stakeholders (Sourcing, Procurement, IT Infrastructure, Finance, Legal, etc.).

Involving people from different backgrounds by setting an efficient SAM process and dedicate the right number of resources is essential for any company that decides to implement a SAM tool. The cooperation of different departments is key. Once a SAM process is defined, it is important to ensure effective and regular training and communications with other important stakeholders within the company. In many firms SAM Managers are required to speak “all languages”, which means to be able to coordinate and cooperate with Sourcing, Finance, Legal, IT (and software vendors) at the same time. This is even more important for international firms whose subsidiaries can have a certain degree of autonomy and a lower level of awareness on Software Asset Management practices.

The SAM tool supports organizations to run recurring and automated operations and controls which, together with a consistent SAM process, will help companies to proactively manage software licenses and take the right decisions such as buying additional licenses or uninstall unused software. However, even the more advanced SAM tool will need “human intelligence” because only people in charge of SAM process can deeply understand the impact of complex licensing rules, take decisions in terms of contractual framework, decide to replace an obsolete application, implement corrective actions and prevent compliance issues. A tool produces outputs that still need to be analyzed and consolidated by skilled people who are entitled to translate the information gathered into valuable decisions and successful optimization plans. In other words, with the increasing adoption of SAM tools, the role and importance of SAM Managers become even more critical and indispensable in the company.

 


 

Maxime Jond - Consultant -
Karène Zencker - Manager -

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