The Value of a Software Asset Management Team: Don’t Let an Expensive Software Audit Catch You Off Guard

In this blog post, we'll explore the similarities between pest control and software asset management (SAM) through the eyes of Al Strait, a Senior Consultant for Software Sourcing and Portfolio Management at SoftwareOne. With experience in pest control and SAM, the author draws comparisons between these seemingly disparate fields to highlight their shared principles and challenges.

My first job out of college was with a commercial pest control company specializing in servicing the food industry. After a couple of years, I left and entered the information technology (IT) field, believing that I had left the pest control world behind and would have no further use for the knowledge I had accrued.

However, pest control and software asset management have far more similarities than I had realized.

Both involve detecting, monitoring, and managing risks. If left unchecked, risks can spread through your environment and cause an economic impact on your IT and business operations. These risks can go undetected for an extended period, resulting in significant adverse effects when finally discovered.

There is also a similarity between managing pests and software. They both require specialized knowledge. Eventually, once risks are mitigated, monitored, and managed, the program's financial value can become less apparent, leading to calls for its reduction or cancellation.

Pest Control Case Study: The Consequences of Cost Reduction

During my first year in pest control, a long-time client canceled us without any explanation. We assumed that they had changed providers, which was uncommon. However, this same client contacted us the following year requesting a pest control service proposal. During the pre-bid inspection, multiple infestations of various pests were found, and we were told they had been without preventive services since ours had been terminated.

It turned out that because they were not having any pest control issues, the decision was made to cancel the service as part of a cost reduction initiative. This led to an explosion of pest populations that we were again brought into control.

In the long term, it ended up being advantageous for us as a company because not only did we gain additional business in the form of intensive clean-up services, but we also took the opportunity to increase the annual pricing for our preventative services. For our client, there were short-term savings during the one year without any services. However, it was more costly for them in the long term than just maintaining a preventative offering.

SAM Case Study: The Challenges of Demonstrating Value

A similar scenario can play out in the software asset management world. For example, your SAM team may implement a process to reclaim unused software for considerable savings or globalize the management of a local application for a considerable volume discount.

However, after the initial year’s savings, there may no longer be reduced spend for both of these initiatives in the following years. In the case of the reclamation process, ongoing reclamation may be offset by new requests. You may have negotiated such a considerable discount for the globally managed software that the publisher is unwilling to come down any further. In both cases, you may no longer be achieving hard savings, which can lead to questions as to the value of the program.

Being proactive is generally valued over being reactive – a phrase I’ve heard mentioned hundreds of times in various trainings and countless meetings. A pest control team can create an environment free of mice and insects through proactive measures. Similarly, a SAM team can minimize software waste and risk through proactive measures, such as governance, reclamations, forecasting, and negotiations.

Yet ironically, hard savings, which by its very nature is reactive, is generally more highly valued than cost avoidance, which is proactive. The challenge then becomes demonstrating the value of being proactive when its metric is less than reactive behavior.

This challenge is not unique to SAM. It will depend upon each specific situation, corporate culture, and individual.

However, some things that have been helpful in the past are:

• Measure software request rejections and reclamation - even if it doesn’t result in hard license savings - it can help put a dollar value on cost avoidance.
• Document retail pricing/initial quotes and compare them with the final negotiated price. There may be value in engaging outside services to help with this for large, complex, and expensive vendors.
• Quantify the business value of software for which the SAM team provides a support role. Some software may not have significant financial spend, but the SAM team may provide a service critical to the procurement/maintenance of the software, such as managing license keys.
• Maintain a record of past audits and track any trends over time.
• Track trends. Whether it be in spend, reclamations, software requests, etc., it may help tell the story of what an unmanaged environment might look like.