Software Asset Management for the Digital Business

We live in a digital world. Both personally and professionally, our lives are made easier by the incredible technology available at our fingertips. It’s hard to fathom that 10 years ago the first iPhone was announced by Steve Jobs, and the impact this single device has had on the world is mind blowing.

The possibilities are truly endless for where technology will take us, and the opportunities for individuals to be successful in this world has never been greater. A great example is mobile apps, which are encouraging start-ups (e.g. Uber and Airbnb), and even turning teenagers in multi-millionaires! It’s exciting times right now, and even more so for the future!

“Digital transformation is the change associated with the application of digital technology across all aspects of human society. … The transformation stage means that digital usages inherently enable new types of innovation and creativity in a particular domain, rather than simply enhance and support traditional methods.” ^[1]

To compete in this highly competitive, digital future, businesses need to be more efficient than ever before. Ensuring there is no wasted budget, optimised operational capability to drive up revenues and market share will ultimately position them as the leaders in their market.

To keep pace with the disruption businesses are going to face in the near future, they need to have their people focussed on the things that matter and the things that are going to position them ahead of their competitors. As a result, businesses will need to start shifting their focus from operational activities being performed in-house, to Managed Services and Automation, which will define the new world outsourcing.

Why is this so critical?

I think the Global Centre for Digital Business Transformation do a great job of articulating why being ready for this industry shift is so critical.

“40% of companies are at risk of being displaced because they’re not equipped for the digital future. We can be certain that one of the only constants will be change. Since first appearing on corporate radars five years ago, the art and science of digital transformation has matured significantly across all key pillars – from strategy, to people, process and technology.

Today, each pillar involves vastly new approaches when compared to business as usual. Organisations are working with new strategies that convert linear value-chains into multi-dimensional value-networks, new skills such as digital service management, new processes that place greater emphasis on the ‘front-end’ and ‘back-end’ of the innovation lifecycle, and new technologies such as the internet of things (IoT), intelligent automation, wearables and augmented reality applications.”^[2]

Applying the Software Asset Management (SAM) Lens

With all the great new technologies comes new licensing constructs, models and terms of use. If we think about how difficult it is to keep on top of today’s licensing terms and conditions, I can just imagine how much more convoluted it will get in the future. It’s likely that it will become even harder to actually track some of the technologies businesses will be paying for.

As workforces embrace mobility as a direct response to these industry shifts, keeping track of the businesses assets will require sophisticated technologies. Technologies which not only offer multiple ways of discovering and inventorying technology, but have the intelligence to digest all the information it collects, and present it in a human consumable format.

Furthermore, making the intelligence dynamic offers users the ability to leverage real-time insights and to configure personalised dashboards on the things that matter most.
As an industry, we can see some of the major SAM tool vendors are already building their solutions around these requirements, but as time goes on, they will need to remain top of their game to keep up with the volatility of the industry, as change will be quicker than ever before.

So, it begs the following questions…

1. How will your people track and manage compliance in this digital age?
2. How will you implement processes to optimise spend on software and prevent budget blow outs that impact the bottom line and ultimately the business’ competitive capability due to wasted spend on poorly managed software?
3. How will you know what you’re actually using against your contracts without the use of sophisticated technology to support your business?
   In my opinion, signing up for software that you can’t track is like signing up for a home loan that you can’t afford to repay. It will not end well and you will continually be at the mercy of the software vendor.

Why you can’t afford to be unprepared

Today, every business that is audited by a software vendor will on average expend 129 man-days of effort in responding to that audit^[3]. Using a conservative blended hourly rate across all those who would be involved (CxO, Managers and Specialists) of $90p/h (AUD), the average audit costs businesses today $92,880.00 (AUD) in lost productivity, which can be directly correlated to impacted customers, possible breaches in SLA’s and supporting revenue generation.

Imagine if this time could be reduced to only a matter of hours or days, which were focussed on smart negotiating to maximise value for the business, rather than trying to manually establish a position and blindly negotiating without understood facts or figures.

Aside from taking IT teams off task to respond to these painful audits, from an unbudgeted spend perspective, the risks have never been higher. According to Navicle Consulting, in 700+ audits they have conducted, the average Oracle shortfall from an LMS audit is $1.8M (AUD).^[4]

SAP have also committed to audit every one of their customers within Australia before 2020. With the recent £40 Million (GPB) Court Case against Diageo, and the pending $814M (USD) case against Anheuser-Busch, IT leaders simply can’t risk not managing these valuable business assets. Picture yourself standing in front of the Board of Directors asking for $814M in CAPEX to spend on poorly managed software. Money that could have been invested into supporting the businesses readiness for change in the challenging times still to come.

In Closing

To be successful in the future, businesses will need to consider new perspectives when building out their strategic plans. 2018 will force many businesses to realise digital transformation is very real. It’s an imperative in today’s market. Disruption will continue to be an increasingly common occurrence in the next few years, and companies unable or unprepared for those changes will quickly fall behind.

Businesses will need to fully leverage the possibilities and opportunities of new technologies and their impact for faster, better and in more innovative ways to do things in the future.

“A digital transformation journey needs a staged approach with a clear roadmap, involving a variety of stakeholders, beyond silos and internal/external limitations. This roadmap takes into account that end goals will continue to move as digital transformation de facto is an ongoing journey, as is change and digital innovation.” ^[5]

Software Asset Management stands to support business transformation goals by ensuring they are maximising existing investments, proactively reducing waste, and ultimately saving time and money. Software Asset Management has a role in this turbulent future, and it’s quite an important one!

[1] What is Digital Transformation: https://enterprisersproject.com/what-is-digital-transformation#q1)
[2] Disrupting digital business in 2017: http://www.bcs.org/content/conWebDoc/57289
[3] Crayon warns of ‘black hole of risk’ in software audits: http://www.computerweekly.com/blog/CW-Developer-Network/Crayon-warns-of-black-hole-of-risk-in-software-audits
[4] Navicle: https://www.navicle.com/
[5] Digital transformation: online guide to digital business transformation: https://www.i-scoop.eu/digital-transformation/