Why Managing Software Spend is Important

Sep 26, 2016

How can you manage software spend? What makes it important?


With the worldwide spend on software expected to hit $356 billion in 2017 (according to Gartner), the need to properly control and manage this cost is paramount. In the past IT departments have typically focussed on managing hardware as this has been a much bigger proportion of their annual spend than software. Now, the pendulum has swung the other way with software to overtake hardware by 2020. Managing software spend is vital as the software on a desktop or laptop device is now usually worth much more than the device itself.

For a lot of organizations managing their software is a new experience and many will follow the same path. Firstly, they set about understanding what they have got installed on their estate manually – after all if you can’t measure it, you can’t manage it. But, they soon discover that this is a laborious and time consuming task that will, in all likelihood, require information being collected from all over the organization. In fact it has been estimated that this can take up to 70% of the time.

But what are the challenges organizations face with managing software spend?


Licensing Information is Immediately Out of Date

Collecting information from across the organization will likely give you many different sources of the truth and make it a complex task to analyze and reconcile this information in order to produce a base line and an Effective License Position (ELP). In many cases this will take months to complete and unfortunately, will be immediately out of date.

However the information will enable you to establish whether you are in compliance with a particular software vendor (at that date) and so avoid the nasty surprises that one of their ever-increasing audits will spring on you. Congratulations, you now have to repeat this process for your other major software vendors!


Poor Procurement and Re-harvesting Processes increase costs and makes managing software spend harder

How can poor procurement and license re-harvesting processes increase costs and make managing software spend harder?

In an attempt to speed up the process and establish control, many organizations will reappraise their license procurement and deployment processes. What is discovered in a lot of cases is that software is being procured by multiple people and business units across the organization. This not only leads to problems in managing it, but is also not cost-effective. This is because consolidating all your purchasing requirements will put you in a much stronger position with the vendor when you come to negotiate your agreement renewal, compared to buying everything separately.

Software deployment also causes problems in this distributed world. Although it will in many cases be automated and could even be carried out by a central service desk; once a license is installed control over its management will be quickly lost. For example, how do you know it is actually being used? And, if it isn’t, wouldn’t it make sense to reclaim such unused licenses for use by other people, so avoiding unnecessary additional cost?


What is the Answer to Managing Software Spend?

The whole process of software license procurement, distribution and management can be improved with automation. From a self-service corporate app store with built-in approval, distribution and license reclaiming coupled with a tool to discover, inventory, measure usage and store entitlement details will help to give you the necessary control to better manage your software assets.

This will not only enable you to produce an ELP for all vendors much more quickly, but also provide a platform for you to go onto the next step and optimize your software licensing. Allowing you to enjoy the 30% cost savings that Gartner forecasts SAM will give you.

If you would like to find out more about how Certero’s technology and self-service app store, Certero App-Centre can help you gain control of managing software spend on licensing, please get in touch.

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