The kindest cut of all

The heavy snows and freezing winds of recent weeks will reflect the mood of many in the country, who shiver as they wait for the coalition’s cuts to bite.

Osborne’s axe has scythed through every sphere of government spending, from legal aid to housing benefit; council funding to the arts. Although it’s possible to disagree with the extent and rapidity of the cuts, there are few who deny that savings must urgently be made.

But slashing services is not the only method of curbing costs: kinder cuts can also be made by achieving efficiencies in government processes, procurement and management; a fact highlighted in successive reviews by Sir Peter Gershon and Sir Philip Green.

While both these reviews outlined common sense proposals for cutting waste, neither of the noble knights identified one of the simplest, quickest and most effective methods for achieving efficiency savings: the proper management of software assets.

Software alone accounts for around 35 per cent of all public sector IT spend, so its vital that By ensuring that software is effectively acquired, deployed, used, managed and retired. If , organisations do this, they can achieve immediate efficiencies, as well as realising significant cost savings over the software lifecycle. By the same token, those that fail to manage their software effectively will inevitably incur significant and unnecessary overspend which, in the current belt-tightening climate, is simply unacceptable.

While this is true of almost all organisations that deploy licensed software, it is all the more pertinent for government. A department or ministry may employ many thousands of computers in an array of centralised and remote locations, each running numerous versions of operating systems and applications, which themselves reside in multiple data centres or distributed arrays.

The good news is that the need for effective software management is actually recognised by public sector managers themselves. In recent research conducted on behalf of the Software Industry Research Board, 60 per cent of ‘non-board’ (i.e. IT and financial) managers cited ‘reduced software procurement costs’ as the single most effective way of saving money. The bad news is that less than a third of board-level respondents – the ultimate decision makers – agreed. Why, then, are boards reluctant to agree with their IT and financial experts?

A major reason seems to be a perception that software asset management is a costly and complex process that consumes vast amounts of time and requires highly-specialist technical knowledge. In reality, this is far from the truth.

An effective software asset management (SAM) system can comprise just two elements. First, an automated discovery tool that establishes what software is installed on the network and creates up-to-date inventories which help flag licence renewals; second, a licence management tool, which provides information by seat, named user, server and client access for optimum decisions-making.

These tools enable organisations to implement a set of processes, policies and procedures, making it easy for them to see what software they have installed across every computer and premise. What’s more, it helps them to apply the terms of their existing licence agreements and establish discrepancies between what they are entitled to and what they actually have installed.

This information enables organisations to avoid the risks of being under-licensed (and thus of incurring substantial fines); by the same token, it also prevents managers from being over-licensed. Applications that are no longer in use can either be re-allocated or retired, thus eliminating unnecessary overspend on software.

But SAM is about more than just a compliance tool. The centralisation of information about software applications that follows the outlines of SAM enables organisations to monitor and control the cost of their software assets in effect improving application performance and optimisation across the workforce.

SAM should not be seen as a “nice to have”: it’s actually a key mechanism for transforming software from a cost centre to a strategic asset.

Of course, an effective SAM programme requires that staff understand and adhere to all processes, policies and procedures; yet the small investment needed to educate employees is repaid many times over by increased efficiencies, lowered costs and avoided risks.

Far from being a drain on resources, a software asset management programme has the potential to reduce IT costs by up to 30 more than 20 per cent, while a typical return on investment can be reaped back within the first year. This level of efficiency increase reflects immensely favourably with Osborne’s cuts, which average 19 per cent across all departments.

It’s not just the public sector that stands to gain from taking a rational approach to their software assets. Almost any business can effect the same degree of efficiency, visibility and compliance from their software by implementing a simple SAM programme. After all, the mood among businesses is barely more sanguine than in the Treasury.

Many private sector organisations are matching the mood of austerity and cutting their cloth to the current economic conditions; postponing investment and expansion in fear that a second recession will follow hot on the heels of the last. Taking a proactive approach to software asset management should be a high priority of any business owner seeking efficiencies in these uncertain times.

“We are all in this together,” the chancellor claims; while in David Cameron’s ‘Big Society’ everybody in the public and private sectors need to do their bit. If that is the case, then there is no reason why IT should be exempt.

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Matt Fisher is a director of the ITAM division at FrontRange Solutions and is the current chairman of the Software Industry Research Board (SIRB), a group of software vendors and practitioners dedicated to promoting better software management practices in the UK. Matt has been closely involved with the IT asset management arena for more than six years, championing the benefits that organisations can realise through Software Asset Management (SAM).