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Software Asset Management by Susan Avery

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There is more to SAM than tracking software

Ability to respond rapidly to changes in technology and business strategy is one of the benefits of having in place a good asset management program for software. Another is improved service and support from the organization's help desk. Still, many companies don't talk much about managing software assets, says Ditka Reiner, president, Reiner & Associates, San Rafael, Calif. "If they do have an IT asset management program in place, generally it's for computer hardware." In her post, Reiner consults with IT acquisition professionals involved in negotiating contracts for software and other technology purchases.

As a panelist at a recent GartnerGroup conference on IT asset management, Reiner says a quick poll of attendees found that fewer than 50% were doing any sort of asset management. And those who indicated that they are managing IT assets have programs for computer hardware, not software. That's because managing computer hardware as an asset is relatively easy, says Reiner. Large companies are aware of what they spend on hardware and are likely to track the purchase for accounting purposes. Hardware is a capital purchase that can be depreciated. This isn't the case for software: Many companies aren't sure of what they have.

Even so, many companies that say they have an asset management program in place for hardware are using old and antiquated systems and may be simply counting the number of desktop and notebook PCs their employees are using, verifying the data with information gathered the previous year. An annual survey, Reiner says, isn't asset management.

"While there are a number of tools available to help companies manage their IT assets, many still don't have a high-quality program in place," says Reiner. Real asset management, she says, is a centralized project.

Getting Started

A good IT asset management program is based on development of a set of standards for a company's purchases of computer hardware (desktops, notebooks, as well as handhelds) and software (desktop, application). Then, those with responsibility for the program can manage the standards set by the organization.

One of the benefits of having standards for computer hardware and software is a reduction in maverick, or off-contract, buying. This helps to reduce the organization's costs. "Companies will see economies of scale through the acquisition process," says Reiner. "They will be able to leverage purchases."

Another key benefit is an improvement in service levels. When a company standardizes and is aware of which software packages its employees are using, there can be tremendous improvements in customer service. With fewer products and standardized platforms, fewer skills are needed for internal support. Data accuracy is improved. Better reporting and analysis means better decision-making. Companies will experience a higher quality of service from both internal and external help desks. "It also helps to reduce training expenses," says Reiner. "Training, support, and repair and replacement are areas that really understand the need for centralized asset management."

What's more, in today's fast-paced world, "the ability to make changes to the enterprise and respond rapidly can help a company be competitive," says Reiner. "A company that manages its desktop and application software assets can do this through accurate analysis of the impact of such changes."

Equally important, there are risks to not having an asset management program. "It's what you don't see that gets you," says Reiner. Maintenance fees account for many of the costs surrounding the software purchase. Much of what a company pays in maintenance fees goes unused. (Software maintenance typically allows a buying organization access to the latest software revisions, bug fixes and product support.)

Without accurate information, a company may inadvertently purchase redundant software packages. It may not be taking advantage of its buying leverage. It may have to pay penalties for lapsed service. Or, it may be out of compliance and have to pay fines. What software buyers have to remember is that they are managing the supplier and not the other way around. Buyers have got to have information.

Plus, a cohesive organization runs smoother. Reiner cites results of a survey conducted recently by one company that provides tools to help manage IT assets. Twenty-two percent of the companies surveyed have more assets to support than they thought. "No wonder," she says, "the help desk is buried."

SAM Needs a Champion

Reiner concedes that software asset management can be a tough sell internally: Most people think of it as simply counting PCs. "

IT managers may not see the impact on the bottom line," says Reiner. "They may understand the reasoning for having an asset management program, but not have the information to communicate it to others in the organization. A program needs a champion."

In starting an asset management program, a "best practice" company needs first to review its current systems. That is, its purchasing process as well as the process of deployment through disposal of hardware and software. To do this, Reiner suggests companies, for instance, take a sampling of phone calls/e-mails to computer help desks with questions from employees on current systems. "Look at the ways records are kept," she says, "and the contracts. Look closely at the process you are trying to fix." She recommends that the function responsible for acquisition (procurement)-and the legal department-keep copies of the company's contracts for hardware and software.

Key managers of these departments, finance, and those responsible for maintaining the technical platform need to be involved in the review of the process. It is important that each of these managers have an understanding of the process. She points out also that a company not neglect the shipping & receiving department in an asset management program. How this operation interacts with other functions within the company is important. Deployment of assets is critical.

With implementation of a centralized process to manage IT assets comes capability to better manage total cost of ownership (TCO). Still, the system is only as good as its upkeep. That's why asset management needs to be more than taking a survey once a year. "Companies need a method for keeping the program updated. Support throughout the company needs to be there."

Updating an asset management program can be a problem. Defining "updating" for departments involved in asset management is different; each has its own concerns. Each department involved has its own ideas of how to meet goals and objectives of an asset management program. Centralized buy-in helps address this. "A company needs to create a single vision," says Reiner.