Saving £50 million across Government through better software management?

In 2011, License Dashboard presented the Cabinet Office with a proposal to save £50 million across UK Government through better software management.  It’s an impressive figure, but what’s behind it and how can organisations in the public sector really make substantial savings on their software expenditure?Only seeing half the picture
Public sector organisations are rightly concerned with the issue of software license compliance – ensuring that the organisation is not using more software than it is legally entitled to.  It goes without saying that Government bodies are expected to lead the way in practising good IT Governance and meeting legal obligations surrounding software installations and licensing.
But focusing purely on compliance risks not addressing several areas of proactive license management where money can actually be saved, thus helping organisations achieve targeted budget cuts or freeing up funds to be invested in other projects.
So where do these savings come from?  According to research conducted by License Dashboard (which has conducted hundreds of software license reviews), the average organisation typically over-spends on software by 20 per cent each year.  This overspend is a result of a variety of missed opportunities: failing to re-harvest unused applications on the network; buying outside of best-deal volume licensing agreements, unauthorised purchasing outside of central procurement, failing to review support agreements prior to renewal, and more.
Analyst firms agree;  Gartner states that an organisation investing in an IT Asset Management system (of which software license management is a critical component) can expect to save up to 35 per cent of their overall IT spend in the first 12 months.
In terms of proactive license management, the main cause for the failures outlined above is simple: lack of visibility.   If you don’t know there are applications sat on PCs but not being used; how can you re-claim them?  If you don’t know what volume licensing agreements are in place or on offer; how can you take advantage of them? If you don’t know what your current usage of a particular application is; how can you be sure next year’s support and maintenance contract is accurate?  You get the picture.
A tale of two data sets
Answering the questions above requires the combination of two data sets. First is an accurate inventory of all the software in use across the network.  There is no shortage of inventory (sometimes called ‘Discovery’) solutions on the market, but some are better than others.
Ideally, an inventory solution should be capable of monitoring software usage as well as installation information, as the usage information can be put to good use when it comes to re-harvesting licenses or identifying where applications should be uninstalled.  It is not uncommon to need more than one inventory solution – using one solution for the Windows estate and another specialist tool for other platforms or to track high-value complex environments such as Oracle and IBM.
The second data set is a comprehensive and accurate repository of all the software licenses held by the organisation.  Ideally, this should not be a ‘dumb’ database, but an intelligent license management application that supports all different license metrics, automatically validates licenses against a catalogue of vendor products, automatically applies upgrade and downgrade rights and more.  Solutions like License Manager 5 from License Dashboard are designed to automate up to 80 per cent of license management tasks, not only dramatically speeding up the process but also minimising the risks of human error while simultaneously optimising the value of each and every license.
These two data sets then need to be reconciled to establish an Effective Licensing Position (ELP), which shows exactly where the organisation has risk (i.e. might be under-licensed) and where the organisation has opportunities to save money as outlined in the examples above.  Normally this kind of number-crunching might take a skilled license auditor days or weeks to achieve.  With solutions like License Manager 5 from License Dashboard, this can be done in a matter of hours, reducing the cost of creating the ELP and further increasing the return on investment realised through better software license management.
The tip of the iceberg
Creating an ELP is vital; but for organisations that really want to reap the benefits of full Software Asset Management (SAM), it’s the first step.
In any organisation, there is typically a disconnect between those that want access to software, those that control the deployment of applications, and those that procure/pay for software licenses.  This inevitably leads to cost-inefficiencies and over-spend, as departments fail to re-deploy the software entitlements they already have, to substantiate a legitimate need for the software being requested and getting the best price once it has actually been decided that a new software license is indeed required.
To address these issues, License Dashboard created SAM Portal, a new concept that gives all the stakeholders involved in managing the software lifecycle a single platform to work from.
Users can request software deployments, software managers can approve or deny the requests, desktop support can initiate the deployment of applications and procurement can be sure that they are not buying new software licenses when existing ones can be re-harvested.
Analysts Gartner suggests that the majority of organisations are over-subscribed on as much as 60 per cent of their software portfolio.  Add to that the McKinsey research that states that organisations now spend over 30 per cent of their total IT budget on software and it’s not difficult to see where the License Dashboard proposed saving of £50m for improved license management comes from.
About License Dashboard
License Dashboard is a developer of license management and software asset management solutions. For more information, please visit www.licensedashboard.com