KPMG: Compelling Events That Bolster The Business Case for SAM

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KPMG: Compelling Events That Bolster The Business Case for SAM

This article has been contributed by Phil Gillett, Senior Manager in the Software Licensing and Asset Management team at KPMG.

How do you spot compelling events within an organization that might lead to a business case for SAM, asks Phil Gillett, KPMG?

Getting or maintaining funding for a Software Asset Management (‘SAM’) projects is a much debated topic, but one which is still very much worthy of discussion.

Like most IT or technical disciplines, the business case for SAM is most successfully built around business objectives, and the more specific these business objectives, the more “air-time” SAM will get with senior decision makers and budget holders.

Piggyback on Key Business Initiatives

This article proposes a list of compelling events, projects and external triggers for which SAM can provide business value.  The approach which is advocated is that SAM teams should not try solely to justify their existence with generic benefits, but should look to align the benefits of SAM to other projects or initiatives which are of specific current interest to the organization.

Essentially, the SAM team should look to see which projects are getting funding and/or board level attention within their organization and then see if they can justify carving out some budget for themselves, this might be through:

1. M&A activity (where organizations divest or acquire new business units). In these situations, there is often a need to novate or transfer licenses and usually put in place new license agreements with vendors.
2. New regulatory commitments.  For example “Living Wills” regulations in the financial sector. Financial institutions are being required by regulators to prepare for the orderly separation of businesses in the event of a potential collapse.  The SAM team should keep abreast of forthcoming regulation and look to see how SAM will be able to assist and organization’s compliance
3. Vendor software audits. These often expose under licensing but they can also highlight over-spend on software.
4. Technology rationalization or data centre consolidation projects:  The obvious point to be made here is that you can’t begin to rationalize or consolidate hardware or software without first understanding what that footprint is.  Organizations that do not have accurate detailed records of the technology and the applications that it supports will often need to acquire inventory tools and/or application dependency mapping tools in order to get a “snapshot” of the technology which needs to be consolidated.  The SAM team should look to see if the technology that is deployed for such projects could be used for wider software asset management objectives.
5. Software vendor agreement renewals:  The renewal of multi-year software licensing and support contracts represents a particularly good opportunity for the SAM team at justifying their value to an organization.  An ideal scenario (from a SAM perspective) is the one where a company is coming to the end of an “all-you-can-eat” type of agreement on which it has over-indulged.  The vendor will be keen on achieving a renewal with a price increase that will be difficult to argue if the company has become more dependent on the software.  The SAM team can use this opportunity to justify a business case to implement more robust “demand management” controls and to gather more accurate information on actual usage of product so that at the next renewal, the organization can robustly argue for a reduction in licensing and support fees where appropriate
6. Internal audits:  Most managers normally make it their goal not to get on internal audit’s radar and certainly wish to avoid being flagged as a risk in an internal audit report.  On the plus side, this will give the issue higher level exposure within the organization and normally means that resource will be provided to implement what is necessary to get the point off internal audit’s risk register.
7. IT cost allocation projects:  In the current economic climate there is an increased emphasis on recharging out central costs, including the costs of IT functions.  One of the benefits of a good SAM implementation is that it will provide detailed information on the usage of IT assets that can be used as a basis of internal cost recharging.  Transparency of allocation methodology will reduce internal arguments and the granularity of detail that a SAM team can provide can help business units really challenge what they need.
8. Security/data loss incidents/projects:  A rather straightforward and obvious point to ask those tasked with securing the corporate infrastructure is how can you know that you have secured everything if you don’t know what you have?  IT asset management and SAM can help improve IT security by identifying assets and the level of security software on them.  Some SAM tools also have application dependency mapping capabilities that can help map out communications between systems at a port/protocol level, which can further provide information that may be helpful in identifying potential data leakage.

To conclude, SAM projects often have the best chance at starting and continuing within organizations if they are linked with a current business need: the more urgent the better.  This will be the case until SAM becomes more established as a discipline and it begins to feature higher up the agendas of both the CIO and IT Director.

This article has been contributed by Phil Gillett, Senior Manager in the Software Licensing and Asset Management team at KPMG.

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