Table of Contents
What is Software Asset Management?
Software asset management is a software-related process that involves the whole life cycle of software assets. This includes everything from planning, procurement, and operations to maintenance and monitoring.
Among other tasks, it involves returning broken apps to life, monitoring system performance, and ensuring everything is up to date. The goal of SAM is to ensure that your applications and their data are always secure and protected.
Benefits of Software Asset Management
Software Asset Management (SAM) helps organizations identify software assets and usage patterns. It also helps in monitoring software compliance and expenses. Moreover, it enables organizations to monitor and manage upgrades and replacements, which reduces costs and risks. It’s an essential part of IT Asset Management. To learn more about SAM, read on.
SAM is an excellent tool for companies who want to maximize the value of their IT assets. It helps identify software requirements and their renewal time, which can help reduce costs.
It also regulates spending policies, allowing teams to reuse and recycle software that’s no longer used. Organizations can gain a competitive advantage and enhance profits by tracking and managing software.
SAM helps organizations identify risks associated with their IT assets, including faulty and unsupported software. It can also reduce the risk of IT compliance and legal liability. SAM also helps companies identify trends based on their past usage.
It also facilitates better planning and forecasting. Software Asset Management also enables enterprises to take advantage of opportunities to improve IT governance practices.
An effective software asset management program protects an organization against overpaying for software licenses and helps ensure an influential license position. By doing this, organizations are less likely to fall victim to shadow IT, which is the practice of purchasing software without corporate approval. Furthermore, an effective software asset management program can help manage the application sprawl and reduce costs.
Another advantage of SAM is that it can make organizations audit-ready. This is especially important if your organization’s software licenses have expired. It can also save a company from making costly mistakes by staying up to date with license requirements and updating software. Additionally, companies that use outdated software are vulnerable to cyber-attacks. Consequently, delays in processing requests for software assets can increase the risk of a cyber attack.
SAM can also help organizations monitor their software licenses and usage. It can identify the number of unsold seats and unused software. This information can help organizations negotiate and change license contracts accordingly.
This approach can maximize the return on investment in software assets. Whether an organization needs a software license for a particular project or is undergoing a digital transformation, SAM can help them make the best decision.
Another vital benefit of SAM is the reduction of IT costs. To keep IT costs low, proactive SLM can help direct IT efforts. It can also enhance a company’s ability to respond to ever-changing business conditions. This technology is fast-evolving and requires constant monitoring and management.
By making it easier to identify and track software licenses, a software asset management tool can make an organization more efficient and cost-efficient. It can also help reduce license wastage by determining what software to procure and when. Moreover, tracking software usage can help organizations reduce the risk of purchasing software that doesn’t work for the company.
Legal & Financial Risks
Effective software asset management is critical to maintaining compliance and preventing financial and legal risks. In the event of an audit, your organization will need to prove that all licensed software is being used, or it will face expensive fines.
It can also reduce the overall cost of using the software. Software asset management also helps you avoid wasting money on outdated licenses.
A software asset manager also coordinates the purchase of new software and negotiates software license agreements. It must also handle the life cycle of the software, assigning licenses as necessary and adjusting licenses when employees change. All these tasks are very time-consuming, and a software asset manager must be up to the task.
Software asset management helps companies maximize the value of software assets while minimizing risks. This involves inventorying, auditing, and redeployment. In addition to minimizing financial and legal risks, it also allows an organization to reap the rewards of software asset management in the long run.
It protects the company against financial and legal liabilities if a software asset is lost or stolen. A good software asset manager will ensure that all software assets are correctly licensed.
Proper software asset management is vital for the health of a business. With the number of SaaS apps growing daily, the need for software asset management is more significant than ever. Many IT and finance departments are unaware of the scope of the software sprawl they’re facing. The average company wastes 38% of its enterprise software. Further, the risk of an audit is 68% higher than it was two years ago.
Setting up a SAM program is significant and can take considerable resources. A strategic approach is often required, especially when the stakes are high. As always, seek professional advice if you are considering implementing a SAM program. So you can minimize legal and financial risks and improve business performance.
SAM is an essential step in a company’s IT infrastructure. It helps to increase the productivity of employees and reduce costs. It also helps to keep your business compliant with licensing requirements. Ultimately, it protects your business from fines resulting from software license non-compliance.
Managing your software assets through a software asset management program allows you to identify business risks and establish business processes. It can help you comply with government regulations, minimize financial and legal risks, and protect your reputation. You can make informed decisions regarding IT budgets by keeping track of installed software.
Costs of Not Investing in SAM
Software Asset Management (SAM) is a critical process for managing and controlling software costs. Without it, an organization may find itself financially exposed. An effective SAM plan helps organizations control costs, standardize software licensing programs, and provide better IT forecasting and budgeting. The process can also help organizations take advantage of software depreciation tax benefits.
With an active SAM program, an organization can conduct regular reporting and internal audits to ensure compliance with vendor software license agreements. Without this, organizations may end up underusing and overusing their software licenses, leading to unnecessary expenses and security risks. A good SAM program can also reduce the cost of audits and significantly shorten audit timelines.
Moreover, an effective SAM program can also give organizations insight into future software needs and provide a scalable foundation for growth. It allows companies to decide on what software they need today and plan for future needs. The data from SAM can help them make informed decisions that will maximize return on investment.
While it is essential to manage software assets to maximize their value, some organizations choose not to invest in SAM. Many think they will save money by not using SAM. However, this is not the case. The cost of not using SAM will be much higher than its cost.
Lack of proper software asset management is a significant cause of excessive costs. Without a centralized, efficient solution, an organization may be forced to pay unnecessary reinstatement fees for software licenses that expire.
An effective SAM solution can help manage costs by monitoring software licenses and alerting IT departments about impending renewal dates. It also provides information to help negotiate better with software vendors.
In addition to lower software licensing costs, SAM also improves relationships with software vendors, which gives companies an edge in future negotiations. Furthermore, an effective SAM plan provides a comprehensive understanding of licenses, their deployment, and usage and provides insights to make effective decisions. Further, SAM can help organizations increase their relationships with software resellers.
An organization can save eight percent of its software budget by implementing a SAM program. In one study, Flexera analyzed the practices of medium and large organizations that employed SAM.
These organizations had an average software spend of $74 million. This represented an 8.64 percent cost reduction, which equated to $6.4 million in annual savings. Moreover, the savings resulting from a SAM program could be used to fund growth initiatives and improve the digital experience for customers.
A Software Asset Management program offers a 360-degree view of the organization’s IT assets. With such an overview, IT professionals can better understand users’ needs and the software they need to run their operations. A SAM solution also helps identify and eliminate software licenses no longer needed. A SAM solution can also save the business money by automating the processes necessary for managing software.