Retaining control in challenging times

Findings from the government’s Operational Efficiency Programme, a year-long programme examining operational spending in the public sector, recently claimed that better management information, benchmarking and governance of IT-enabled change programmes could achieve £4 billion of savings a year on back office operations as well as £3.2 billion of savings a year on IT spending.

At the recent Public Sector Engage Forum (www.numarasoftware.co.uk/engage/blog/) which featured FAST Ltd, David Tidey, assistant chief executive for Royal Borough of Kensington and Chelsea suggested local council IT directors are typically confronted by a landscape that demands a 15 per cent reduction in management costs across councils.

Yet the options for delivering that target aren’t very appealing and they include outsourcing, no longer the panacea it was once considered to be; a ‘strategic partnership’ where doubts exist over getting good value; or a ‘slash and burn’ culture driven from the chief executive’s office, taking millions off the budget, but getting rid of half the staff in the process.

Efficient spending
So, there’s no doubt that in the current market conditions, the CIO who runs a tight ship has more impact and relevance to an organisation than any one particular project or technology. The operation has to run reliably every day, and that means wasting nothing, allocating scarce funds with due care and attention and ruthlessly tracking budget spend, including money spent on software licences. Yet 41 per cent of businesses are currently over-licensed. One public sector organisation with an estate of 3,000 desktops and 300 servers found it had a £600,000 overspend on software licences!

Preventing such occurrences means taking a cold, hard look at doing the essentials such as Software Asset Management (SAM) in a more efficient way, and undertaking some IT circuit-training followed by the equivalent of a cold shower.

Challenging times for users mean challenging times for vendors too. The recession has meant organisations having to revisit their budget plans, with a consequent knock-on effect on software vendors. For example, in 2009, the Gartner research group had expected IT budgets to grow 3.3 per cent. Now the most likely case is IT budget growth of 0-2.3 per cent, with financial services customers, the public sector, retail and manufacturing all likely to curb spending.

That means if users aren’t buying new programs, then software vendors must turn to their existing customers to maintain their licence revenues. And that means an increased risk for companies of unwelcome vendor-inspired software audits to check on licensing. Indeed, according to recent research carried out by IDC, 52 per cent of all companies have been subject to a vendor audit or review in the past 12 months, whilst 23 per cent have been subject to three or more audits or review during this timeframe, suggesting that software audits are on the increase. It seems that software publishers are leaving nothing to chance and taking every opportunity to try and recover any money they consider to be theirs. This has prompted a rise in the number of FAST customers approaching FAST Ltd for advice, notably on how to cope with SAM reviews from Microsoft or other reviews from Tier One publishers.

Make no mistake, a software audit for which an organisation is unprepared can be a catastrophic event, which can cost money, reputations, even careers. At one prominent company, the unexpected receipt of a compliance letter created havoc which tied up IT management for weeks chasing software assets and proof of licensing, necessitating the use of a FAST consultant to help the company reconcile its licensing position, cleansing and interpreting data from licence management tools to help the company regain control.

Cost Awareness
The costs involved in such an occurrence can be significant. There is the opportunity cost of key staff or management’s time which could be put to better use, but which has had to be pulled off other IT and business projects to solve the software licensing headache. Then there is the cost of additional consultants, and finally the cost of true-ing up licences, which can run to thousands, even millions of pounds.

Think it can’t happen to you? Think again. With the recession already leading to the loss of thousands of jobs, companies whose software assets are not up to date risk finding disaffected employees with nothing to lose and everything to gain tipping off software vendors that their ‘old’ company is extensively running unlicensed software.

On the other side of the balance-sheet, there can be a silver lining to the changes organisations are undergoing in terms of headcount because although organisations usually follow specific leaver policies and procedures from a security perspective, they often forget to pay attention to the implications for their software estate. The firm may be paying for software licensed on specific projects for users that are no longer with the organisation.

The reality is that organisations that fail to keep on top of their software assets often find themselves paying over and over again for software licences they already had and didn’t need to buy. But because they had no idea what they’d bought, what their software usage is or what they had available in a licence ‘pool’, they ended paying out again. In troubled times when every penny counts, that’s not such a smart move.

A compliant IT structure
Faced with these challenges, what action can organisations take to ensure they are not caught short by a software-licensing problem?

FAST Ltd’s Professional Services and Consulting team provides dedicated expertise to UK organisations that want to benefit from smarter IT and SAM strategies, and that want to have a legally compliant IT infrastructure.

Among the services we provide to customers are a licence health check that determines whether companies are able to provide proof of entitlement and purchase records to satisfy an enforcement body, vendor or SAM partner; licence cataloguing and reconciliation, reconciling the software installed against the software licences purchased; audit tool selection, helping companies establish with audit tools suits a particular environment; providing a managed audit service, from pilot auditing projects to full enterprise-wide implementations; for organisations that value SAM but don’t have the resources in-house to introduce and or maintain a SAM program, FAST can provide a range of managed SAM services. Understanding the data that has been collected by an audit tool may seem daunting, but FAST can undertake this activity using its FileCruncher service methodology that provides a range of data management services that can save organisations precious time.

Are you convinced yet about the need to regain control? Don’t take my word for it. Here are the views of one public sector organisation, West Sussex County Council, which used the FAST Programme as a key way of quickly accessing expertise and best practice.

“One of the main benefits of embarking on the FAST Programme is cost avoidance, which right now is probably a key driver for many organisations. Getting a better handle on asset management and in particular, licence management, will be a great help in cutting costs now and in the future,” says Roland Medullas, the council’s IT policy and planning manager. In today’s challenging market and uncertain times, organisations are looking for certainty and cost control. FAST Compliance Manager, a tool recently introduced as a benefit of the FAST compliance programme exclusively for FAST customers can help companies ascertain their software compliance position to ensure firstly that there is no overspend on software licensing and secondly, that the risks of licensing shortfalls is mitigated, preventing any budgetary shocks. That’s good for companies, reputations and careers."

Five top tips for more effective software asset control

1. Perform a Software Inventory
Begin by taking a software inventory survey of all installed software on your organisation’s computers, workstations, servers, and other devices, and collect the information in a report.

2. Match Software with Licences
Match your software licence entitlement documentation to your software. See if you are over-licensed or under-licensed from your report. The right tools will help you do this.

3. Review Policies and Procedures

Review and/or write policies and procedures that employees can use to ensure proper software asset management. Considerable cost savings can be made by paying close attention to applications which may be expensive to licence and which could be licensable in read, rather than write form. Microsoft Project and Microsoft  Visio software are often expensively over-licensed by organisations.

4. Develop a SAM Plan
Stay the course and establish an ongoing plan, construct a library for your software media, and keep your organisation’s data up-to-date.

5. Don’t Stop

Consider SAM to be an ongoing journey of continuous improvement. Once you have taken the right steps to get yourself software licence compliant, ensure you establish the right policies, procedures and processes to keep it that way.

The real acid test for software compliance is whether your organisation is able to create an accurate picture of all your software entitlement and usage rights reconciled against all software installed in-house. Making this happen can be challenging and time-consuming, especially without the right processes in place, the right tools to automate those processes, and the right external, specialist support to know how to manage them.

When it comes to managing your software assets, are you in control? Or crossing your fingers?

For more information
Visit www.fastcorporateservices.com

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