Software Asset Management

What is software asset management?

Software Asset Management is a big part of an organization’s business technology strategy. The process involves taking ownership of a company’s software usage by managing and optimizing the spend, deployment, software licenses, license compliance, utilization, and disposal of software applications across all software business functions. 

Software Asset Management (SAM) is a subset of the wider IT asset management (ITAM) practice, which makes sure all IT assets are managed and maintained.

SAM is particularly important for big organizations because it primarily deals with the redistribution of software licensing. SAM assists in managing the legal risks associated with software ownership and expiration. This is especially important if you use SaaS software.

For businesses that want to align software assets to their business capabilities, SaaS management and application portfolio management are the key steps to take at the same time.

SAM strategic goals and benefits

With software playing such a central role in the day-to-day functions and growth of any modern organization, SAM has many benefits to help companies achieve strategic goals and keep their software running smoothly. 

Reduce costs

Software asset management aims to reduce costs by negotiating or renegotiating contract agreements and eliminating or relocating underutilized software licenses. SAM benefits businesses by documenting, reducing, and managing the various costs associated with software applications. This makes sure that all software is being used as intended.

Ensure compliance

Without a good handle on licensing agreements, legal problems or security risks may occur. SAM enforces compliance through corporate security policies, renewal date monitoring, updated hardware standards, etc. Software companies want to manage how much of their product is being used and by whom, so SAM keeps businesses compliant with the specifics of the service.

Improve employee productivity

By making sure licensing and software services continue to be managed through automated SAM tools, workers will know exactly how they are supposed to use the program and for what. This makes sure employees spend less time tackling potential problems that could arise somewhere down the line. SAM also helps businesses track which employees are using what software and how much, so they can have an idea of where to add or remove resources based on that data to improve employee productivity.

Increase IT efficiency

The same goes for IT efficiency. Both SAM and ITAM allow businesses to increase the usage they receive out of the hardware and software they invest in and use. IT asset management does this by limiting the overhead associated with managing and supporting all IT processes. In software asset management this means streamlining and automating regular processes to make them much more efficient. 

Establish vendor lifecycle policies

SAM can help establish ongoing policies surrounding software and software vendor life cycles, which helps establish the long-term benefits of software asset management. This includes the documentation, deployment, usage, and retirement of a certain software over time as the business grows.

3 focus areas of SAM

Software asset management is focused on three key areas:

• Software licensing: At its core, the SAM strategy is implemented to ensure all software is compliant through managing and updating terms and conditions, renewal policies, installed software, and product usage throughout a company. Most software vendors are very rigorous with their licensing agreements, so businesses want to make sure they are not violating any of the terms of service. 
  
  
• Software audits: If a vendor suspects a company may not be complying with their terms of service, they may perform a software license audit. An audit will track whether a business is misusing software or not, which can be incredibly costly if found to be doing so – as well as to interrupt the flow of your everyday business operations. It can also incur future legal issues. In the case of an audit, SAM can assist the process and make it less expensive. 
  
  
• Software optimization: Software asset management can optimize spending and reduce costs associated with unused software. Businesses without a SAM strategy can end up paying for licenses they don’t use or maintenance they don’t need. This is important for software such as SaaS which tends to come with countless functions that may become less relevant to your business over time. Knowing exactly what a business is using regularly, what it can do without, and making sure it’s passing its audits will provide efficient use of funds. 

Core processes

There are several core processes that form the DNA of software asset management. The seven below are the core processes a SAM project needs to be built around.

1. Software usage
   This process/policy outlines what users are allowed to do with any installed software. This helps vendors identify any misuse of their service and keeps it business compliant.
   
   
2.  Software purchasing
   This process assists companies in software procurement. It helps decide what is needed, who will be using it, and for what in the correct way.
   
   
3. Software implementation
   SAM processes assist in the correct deployment and approval of new software requests. This also helps to streamline applications and software. 
   
   
4. Employee movement
   If a new employee starts, moves to a new department or leaves the company, then the software they use needs to be tracked and managed so it’s reallocated and used efficiently. 
   
   
5. Disaster recovery
   Disasters can happen at any time. Software asset management processes help maintain critical IT and software services until the disaster is resolved.
   
   
6. Recycling
   When employees leave a company, software recycling ensures that the redistribution of software assets is done efficiently, follows the right methods, and doesn’t incur any hidden costs or fees. This may also be the case during an internal software license review. 
   
   
7. License compliance
   And most importantly, SAM processes uphold license compliance so companies can pass software audits and ensure any issues are addressed efficiently. 

Position within the company

When senior management is considering implementing a SAM strategy, there are a handful of positions within the discipline to consider based on the company’s needs and specifications. SAM positions include Software Asset Management Administrators, Analysts, Managers, Consultants, and Specialists.

Each member of the SAM team will have different responsibilities depending on what’s needed; for example, analysts will conduct internal audits and analyze license usage, while consultants may be brought on temporarily if expert guidance is needed. 

As a company matures, so does the role SAM plays. A use case example would be the SaaS Center of Excellence (SCoE) employing a SAM manager to streamline SaaS discovery and management, reporting, user lifecycles, rationalizing and rightsizing, and reporting on engagement and utilization.

This is established as the company builds its application portfolio and needs to carefully monitor and uphold license agreements in parallel with orchestrating a multidisciplinary, agile, and integrated IT environment. 

Sub-Pillars of SAM

Within software asset management there are three sub-pillars that make the benefits of SAM possible. These are software license management, software vendor management, and software spend management.

Together these three pillars provide the foundation of the SAM strategy and form the basis for ongoing improvement.   

Software license management

With some organizations running hundreds of different software applications at once, the job of documenting, reducing, and managing them all is what makes SAM such an asset. SAM tools make it possible to keep on top of multiple complex software licensing agreements at the same time.

Furthermore, with various software applications being either SaaS, cloud-based, or on-premise, managing various different licenses is time-consuming and complicated, especially if the software has been purchased without company knowledge (known as shadow IT). In this case, SaaS management solutions are leveraged.

Software vendor management

Making sure businesses are able to work closely and efficiently with SaaS and other vendors to achieve company goals is another pillar of software asset management. Similar to SaaS vendor management, once new software has been researched, purchased, and implemented, it’s important that a company remains compliant with the vendor's terms of service.

Failing audits can result in hefty fees so rather than waiting for a negative outcome, SAM assists in running internal audits to preemptively uncover any compliance breaches or potential risks. 

Software spend management

The third sub-pillar of SAM is concerned with software spend. Internal IT audits will help a company understand where software is currently being used and where it isn’t. From here, businesses can budget for the future based on current software licenses and upcoming renewals.

Software spend management solutions that specifically focus on SaaS, for example, will set up standards for how SaaS is purchased going forward. Doing this will prevent shadow IT and any security issues associated with it.

It also prevents any unnecessary costs associated with unapproved licenses and makes sure businesses aren’t spending budget on applications they aren’t using or don’t need.

Implementing software asset management

When planning and implementing a software asset management strategy, SAM best practices explained in full detail will form a framework for tackling what may seem like a daunting task.

SAM tools will help management evaluate their software landscape, implement new software solutions where needed, and manage the various licenses associated with software purchasing.

Here is how to implement software asset management:

1. Assess your SAM maturity level
   Determine where you already are in the process and map out a plan for where you wish to end up.
   
   
2. Build stakeholder's buy-in and a team
   Engage stakeholders in the SAM process because it involves hiring dedicated SAM personnel to guide the process.
   
   
3. Evaluate and implement SAM solution
   The first two steps will help you decide what SAM solution is best for your needs. Create a software vendor evaluation matrix during your research to compare different features of your vendors.
   
   
4. Discover all software assets
   During this SAM core process, you need to discover all software assets, including SaaS, and shadow IT. These are vital to understand and document before you can move into the following steps of the SAM process.
   
   
5. Categorize software licenses and analyze usage
   Demystify software licenses and analyze where software is being used (and how often). This will help you organize licenses based on department and find areas of underused software.
   
   
6. Recycle and optimize software licenses
   Use the usage and license data gathered in the previous step to determine whether an organization is receiving value from SaaS and other software investments. Optimize software spend and decide how you wish to recycle, relocate, or optimize licenses to get the best ROI from these agreements.
   
   
7. Implement software procurement policies
   Through completion of the previous steps, your SAM teams will be able to pinpoint where policies are needed and who needs to be involved. This comes in handy with all existing renewals that require a special standardized strategy.
   
   
8. Create and forecast software budget
   Money wasted on unused software assets is a big problem for a lot of organizations, so once a comprehensive SAM process has been established, areas of improvement in usage and spend history will become apparent. based on your findings it will become easier to make more accurate forecasting of software budgets.

Conclusion

Software asset management is a big undertaking for any organization, but without it, businesses could find themselves wading through difficult compliance issues and hugely wasteful software spending.

The next step once the main drivers for SAM have been established is to follow the best practices and find the best-fit software or Application Portfolio Management to accomplish strategic business technology goals.