March 2010
Focus Your SAM Efforts on Business Objectives and Not Software Discounts
Lately, a lot has been written about how ITAM and SAM usage measuring tools can help enterprises reduce software costs. No one wants to pay more than they have to for their software, but simply looking at the cost of software is only part of what you need to consider. No company is in business to buy software, so simply using usage management software to reduce software costs is not looking at the big picture nor asking the more important question, "How can I more effectively invest in software and infrastructure to support the objectives of the business?".
I recently heard about one CIO who benchmarked his software discounts against others in the industry as a way to measure the effectiveness of his group's acumen. However, what the usage information pointed to was that the company had a lot of shelf-ware - in essence software that was purchased but which was not being used to help the business achieve any goals.
I also had an experience several years ago which drove this point home. An IT group in a large semiconductor buys design automation software (from their "EDA" tool supplier) that the engineers in the semiconductor company use to design their products, the next generation of computer chips. The goal of the IT group was to create an initiative to have the EDA tool supplier provide a pay-per-use license model. The goal of the semiconductor company was to find a way to reduce costs by ensuring that the software was being used more efficiently. Their rationale was that the semiconductor company only had to pay for software that was actually being used.
Guess what happened? The usage of the electronic design software went through the roof and the cost of the software increased. Was this a failure? No, in fact it was a huge success. With an abundance of electronic design software at their disposal, the engineers found new ways to do their design (as opposed to just designing "more efficiently"), which resulted in an increase in the usage of software. But more importantly, the consumption of more software reduced the time it took for the engineers to go to market with their new computer chip. This results in accelerated revenue for the semiconductor company.
So as you look to improve your SAM and ITAM efforts, or look for new license models from your ISVs, focus first on the business objectives, and then see how your effort can truly support the business.
Some examples include:
- Do you buy software for projects that require expense budget vs capital budget? Consider asking for a subscription license model (which tends to fit expense budget processes better).
- Do you have enough storage management software to support your business continuity needs?
- Do you have enough Microsoft Word, but not enough MS-Project to help your project managers mange projects?
- Do you have a pricing module with your CRM package to ensure that your pricing goals are being met?
- Do you have other stories that you would like to share about how your software SAM/ITAM efforts results in improvements to the business?
