What is Software Asset Management?

Getting Started with Software Asset Management

Software asset management (SAM) is a business practice that involves managing and optimizing the purchase, deployment, maintenance, utilization, and retirement of software applications within an organization. It helps organizations maximize their return on investment in software by ensuring that they are using the right software for the right purpose at the right time.

Organizations can also use SAM tools to identify opportunities for cost savings by eliminating unused licenses or negotiating better terms with vendors. Additionally, these tools can be used to monitor security threats related to outdated versions of software applications and ensure that all systems are up-to-date with the latest patches.

Getting Started with Software Asset Management

Factors that Influence Software Asset Management

Software is essential to the success of any business. However, successful software adoption and licensing can be complex – but with a carefully developed strategy for Software Asset Management (SAM) this challenge can become much more manageable. SAM provides businesses with the insight they need to make smarter decisions surrounding their software investments that will ultimately boost productivity while also reducing costs.

3 Essential Areas for Successful SAM Implementation

License Management: The Foundation of SAM

Managing software licenses is a fundamental aspect of SAM. Each license comes with specific terms and conditions dictating how the software can be installed and utilized. As a user, it is crucial to ensure your organization remains compliant with these license agreements.

Compliance serves as the cornerstone of SAM. Software vendors aim to ensure that their products are used strictly within the licensed parameters. While SAM encompasses more than just compliance, effectively managing licenses becomes a vital part of your overall business strategy. It is often the primary objective for companies embarking on their SAM journey.

Audits: Assessing Licensing Health

To verify compliance, software vendors may conduct software compliance audits to assess the utilization, configuration, and coverage of their software within your organization. The outcome of an audit can either confirm compliance or identify areas of non-compliance.

Non-compliance can result in unexpected fees that, if not handled carefully, can lead to significant financial implications. Audits also disrupt regular business operations and can be time-consuming if there is no license management technology in place to support the process.

Optimization: Streamlining Licensing Strategies

Many businesses tend to over-comply by acquiring more licenses than necessary, aiming to mitigate the risk of failing an audit. However, this approach can lead to long-term financial consequences. While the immediate impact may not be apparent, over time, the costs of being over-licensed outweigh the potential consequences of audit failures.

Failing an audit typically requires purchasing just enough licenses to close the gap, often accompanied by demands for back-maintenance payments from vendors. Although costly, this problem represents a one-time expense that can be reduced or eliminated through effective SAM strategies.

SAM - A Vital Component of an Integrated ITAM or ITSM Strategy

Effective central IT planning poses a significant challenge in today’s dynamic business landscape. Many large organizations choose to decentralize their operations, granting individual business units the flexibility required to remain competitive. While decentralization benefits business units, it can result in unnecessary IT expenses. To address this, companies employ IT Asset Management (ITAM) and IT Service Management (ITSM) strategies to manage IT assets and services effectively. Software Asset Management (SAM) plays a crucial role within the broader ITAM or ITSM framework.

Even in a decentralized environment, with the implementation of comprehensive discovery and SAM solutions, central IT can effectively control software expenses. By monitoring software installations, usage patterns, and configurations, central IT gains valuable insights for making informed purchasing and license allocation decisions. A robust SAM solution simplifies the management of decentralized spending decisions without compromising essential operational flexibilities.

Given that central IT operates within a decentralized business environment, SAM tools must possess the capability to handle the associated organizational complexity. A highly flexible roles and permissions feature becomes indispensable in this context.

SAM Savings in Action: A Simple Use Case

Consider a scenario where Business Unit 1 (BU1) requires a word processing program for 25 employees. Before purchasing new licenses for Word, BU1 consults with central IT. Leveraging their SAM solution, central IT discovers that Business Unit 2 (BU2) possesses 45 licenses for Word, but they are only using 32.

Employing an automated process, central IT reallocates the 13 unused licenses from BU2 to BU1, satisfying BU1’s requirement. Subsequently, central IT procures the remaining 12 licenses needed by BU1. Through SAM implementation, central IT successfully avoids the expense of purchasing 13 additional licenses and incurs no additional maintenance costs. Extrapolating this example to a company with thousands of employees and multiple software products showcases the substantial savings achievable through effective SAM practices.

Is Software Asset Management Worth the Investment of Time and Effort?

Absolutely! While it’s common for businesses to initiate their Software Asset Management (SAM) programs when they encounter audits or realize they are overspending on contracts, the benefits of implementing SAM far outweigh the initial time and effort invested. At Dalos, we are here to support you throughout your SAM journey and help you unlock its potential.