SlideShare ist ein Scribd-Unternehmen logo
1 von 8
1   Quantifying the Value of Software Asset Management
    Quantifying the Value of Software Asset Management




    Executive Summary
    Over the past few decades, employees have come to rely more and more heavily on
    software solutions to automate and enhance a variety of core business activities – from
    sales order entry and inventory tracking to payroll processing and financial reporting. As
    a result, companies of all sizes and across all industries now find themselves struggling
    to control the growing number of software applications installed on their servers and
    desktops. Studies show that the average employee PC has close to 150 software titles
    installed, including fixes, drivers, and service packs.

    Software Asset Management (“SAM”) systems combine processes and technologies to
    improve the way software applications are utilized, tracked, and managed throughout
    all phases of their lifecycle. There are many advantages that can be achieved through
    the use of SAM. Improved application performance and increased productivity of both
    IT staff and end users are chief among them.

    SAM offers significant financial benefits, lowering the total cost of software ownership
    and accelerating the return on software investment. According to Christopher
    Germann, senior research analyst at Gartner Group, “organizations can realize cost
    savings of between 5 percent and 35 percent by implementing focused software asset
    management practices."

    This paper provides an overview of software asset management and its key benefits.
    Additionally, it highlights the areas where an SAM solution can deliver the most
    tangible, quantifiable cost savings to an organization. Readers will also learn how to
    calculate the potential return on investment (ROI) on SAM in order to present senior
    management with a compelling business case for the solution.

    What is Software Asset Management?
    Software applications have become a vital asset for today’s businesses, providing the
    foundation for employee productivity and output, and supporting mission-critical
    processes that drive operational efficiency and profitability. Companies spend more
    today on software than ever before. In fact, while tough economic times are impacting
    most other industries, software vendors are actually seeing their markets increase.
    Forrester Research predicts that global spending on software will reach $341 billion in
    2008, a 9 percent increase over 2007.

    As more and more software is purchased, companies must find better ways to justify
    and optimize their investments. Additionally, software is unique from other technology
2   Quantifying the Value of Software Asset Management


    solutions, like hardware, because it is intangible, making it much harder to monitor,
    control, and manage.

    Software asset management is a crucial business practice that combines policies,
    processes, and supporting technologies to improve software budgeting, purchasing,
    utilization, management, control, and security across an entire enterprise. Software
    asset management is not a one-time project. Because technology environments change
    so rapidly, SAM must be viewed as an ongoing process in order to ensure continuous
    compliance, performance, and value.

    SAM empowers businesses to improve all facets of software acquisition, use, and
    administration. As a result, the value and impact of software solutions is dramatically
    improved throughout all phases of their lifecycle.

    Today’s most popular SAM applications include fully integrated auditing and tracking
    tools, a centralized information repository, advanced monitoring and analysis, and other
    robust features to enhance the following software-related functions:
        Budgeting and acquisition
        Installation and deployment
        Inventory management
        Logging and tracking of settings and configurations
        Usage measurement
        Monitoring of security solutions, such as anti-virus software
        Performance optimization

    Why You Need an SAM Solution
    The need for SAM is driven by many factors, including the rising cost of enterprise
    software and the growing portions of IT budgets allocated towards software purchases
    and subscriptions. Also adding to the urgency is the growing reliance of end-users on
    software applications in order to execute their day-to-day activities, and the challenges
    faced by IT departments in supporting these increasingly complex systems.

    With SAM, businesses are able to:
        Establish and enforce formal procedures for budgeting, purchasing, deploying,
           and using software
        Enhance strategic technology planning and make more informed software
           purchasing decisions by obtaining complete visibility into existing inventories
        Increase employee efficiency by accelerating the deployment of mission-critical
           software solutions
        Ensure adherence to standards and security policies
        Reduce IT support costs by minimizing the number and length of helpdesk calls
        Streamline administration of software assets, including upgrades and routine
           maintenance. Administration currently accounts for close to 33 percent of
           software budget consumption, according to Forrester Research. And the
3   Quantifying the Value of Software Asset Management


           Information Technology Research Institute states that the cost of maintaining
           software throughout its lifetime can total as much as 90 percent of the initial
           purchase price.

    Leading industry analyst firm Gartner also cites reduced software total cost of
    ownership (TCO), greater economies of scale, improved efficiency and cost-
    effectiveness of support and help desk operations, and the ability to create knowledge
    bases and best practices around software management as some of the major benefits
    SAM can offer.

    Not less important than the benefits that companies can achieve through the
    implementation and use of SAM, tough, are the serious commercial, legal, operational,
    and financial risks they face if they don’t put in place the procedures and tools needed
    to effectively manage their software applications.

    A poll conducted recently by IDC shows that less than half of companies have formal
    SAM practices and procedures in place. , In a similar Gartner study, 38 percent of
    organizations admitted that they had little more than a basic understanding of their
    software licenses.

    This leaves these companies in a highly vulnerable state. For example, without SAM in
    place, these businesses are subject to:
         “Shelfware”, or software solutions that are purchased but never installed or
            utilized. Gartner estimates that approximately 20 percent of software owned by
            companies is never used. And, a report issued by Morgan Stanley and AMR
            Research indicates that almost half of all CRM licenses purchased are never
            allocated.
         Fines and penalties imposed due to non-compliance with licensing agreements.
         Significant staff downtime caused by extensive use of unauthorized software,
            such as IM-style programs or games. A 2007 study by independent market
            research company NewDiligence claims that 85% of corporate employees use
            IM, peer-to-peer collaboration or sharing, or anonymizers while at work.
         Increased threat from damage caused by hackers, viruses, spyware, malware,
            etc.

    Achieving ROI with SAM
    There are many ways in which companies can realize tangible, measurable return on
    their investment in software asset management. Some of the main areas that will
    provide the most significant hard-dollar savings include:

    Increased Efficiency of IT Support Staff
    Every day, corporate helpdesks receive numerous calls regarding software-related
    problems. In order to properly troubleshoot and repair these issues, support staff must
    collect data about the affected PCs configuration, so they can identify any settings that
4   Quantifying the Value of Software Asset Management


    may be impacting software performance. Additionally, they must know what version of
    software the user is running, and any patches or upgrades that have been installed.
    Without SAM in place, this information must be gathered through lengthy, error-prone
    “question and answer” sessions with the end-user. An SAM application puts this
    information instantly at the helpdesk representative’s fingertips, shortening the length
    of calls dramatically.

    Additionally, because SAM applications make it easy to determine which software
    packages are unlicensed or not “corporate-sanctioned”, support professionals can avoid
    spending time on issues related to unauthorized software.

    The potential annual savings achieved through increased IT support efficiency can be
    calculated as follows:

    Number of PCs   X   Average number of annual    X   Cost per ticket    X   % reduction in
                        support tickets per PC                                 average call length


    Many companies that utilize software asset management solutions cite average
    reductions in helpdesk call length of as much as 20 percent. For a company with 500
    PCs, averaging 4 helpdesk tickets per PC per year, and assuming a $40 cost per ticket,
    this can amount to annual savings of $16,000.

    Automated and Accelerated Software Audits
    Manual software inventory audits are a cumbersome, time-consuming endeavor for IT
    teams. Additionally, they are highly error-prone, and often require re-work when
    human mistakes are uncovered. An SAM application fully automates all activities
    related to software inventory tracking and auditing, reducing related expenses as
    follows:

    Number of PCs   X   Time required to   X    Hourly cost of     X      Number of audits
                        audit each PC          IT staff member            performed each year

    According to Salary.com, a leading provider of compensation management solutions and
    statistics, the average IT technicians makes approximately $33 an hour. Assume that
    manual audits take 15 minutes, and the average company performs audits bi-annually.
    Therefore, by automating and accelerating related tasks, SAM solutions can help a
    company with 500 PCs to reduce software audit costs by $8,250 each year.

    Improved Employee Productivity
    Companies of all types and sizes experience significant productivity losses due to the use
    of unauthorized software. In fact, polls conducted by leading US staffing firm Office
    Team demonstrate just how big the problem is – employees spend as much as 156
5   Quantifying the Value of Software Asset Management


    hours each year using IM and other chat programs, games, peer-to-peer file sharing
    packages, and other productivity-draining applications.

    SAM solutions identify illegal or unauthorized software packages on employee desktops,
    so IT staff can immediately remove them. This can significantly increase employee
    efficiency, resulting in dramatic cost savings:

    Total number    X        Est. hours spent     X   % of employees who      X   Average
    of employees            using un-authorized        experience downtime        hourly salary
                            software each year

    If we conservatively estimate that ten percent of any company’s employee base will
    experience negative impact to productivity and output as a result of unauthorized
    software, then an SAM solution can save a company with 500 staff members over
    $140,000 annually (based on an average salary of $18 per hour, according to the US
    Department of Labor).

    Ensured Licensing Compliance
    The Business Software Alliance (BSA) estimates that solution providers have lost more
    than $30 billion in revenues due to licensing non-compliance. As a result, more and
    more organizations are being subject to audits, and those found guilty of piracy or illegal
    use of software face tremendous financial penalties.

    Gartner estimates that as many as 70 percent of mid-sized businesses and larger
    enterprises have already faced an external software audit by the end of 2007.
    Additionally, studies show that non-compliant companies received average fines of
    about $30,000 for each piracy instance.

    By improving the speed and accuracy of the software auditing process, SAM solutions
    make it easier for IT departments to track existing and allocated licenses. With greater
    visibility into license compliance, issues can be identified and corrected before an audit
    takes place. As a result, companies can minimize their exposure and realize the
    following cost savings:

    Probability         X       Number            X    % of PCs with      X       fine per
    of audit                    of PCs                 unauthorized               unlicensed app
                                                       software

    The BSA believes that more than 30 percent of all software installed on corporate PCs is
    unauthorized. And, many industry pundits put the probability of any given company to
    face an annual vendor audit at around 15 percent. If we conservatively estimate that
    only 5% of employee desktops have at least one unlicensed software package running,
    then a software asset management system can save a 500-employee organization more
    than $112,000 in potential fines.
6   Quantifying the Value of Software Asset Management



    Over-Licensing
    Another issue affecting many companies is underutilization of software licenses. A
    March, 2007 article published in IT Week claims that every corporation has as much as
    $390 in unused software on each PC. Additionally, software licenses are often
    purchased, and never even installed. That means, a company with 500 PCs has over-
    licensed their various software applications by at least $195,000.

    SAM makes it easy to identify unused licenses and reallocated as needed, resulting is
    the following savings:

    Average # of unused    X   Average cost     X   Number of PCs
    licenses per PC            per license



    Enhanced Protection
    The level of exposure to threats like viruses or spyware will vary greatly from one
    company to the next. How much a company stands to lose from a security breach
    depends upon the type data it maintains, and the type of intellectual properly it keeps in
    digital format, among other factors. Therefore, it is hard to quantify exactly how much a
    software asset management solution can save a company in this area. However, SAM
    dramatically reduces related financial risks by helping companies to identify and correct
    security gaps such as missing patches or PCs without antivirus software

    Affordability and Return on Investment
    The potential financial savings outlined above are even more impressive when you
    consider the affordability of many software asset management packages. For example,
    hosted SAM solutions can be acquired for just $20 per PC per month – with absolutely
    no start-up costs, training fees, or other upfront expenses. For a company with 500 PCs,
    that amounts to just $10,000 each year, compared to annual cost savings that amount
    to hundreds of thousands of dollars.

    The chart below logically depicts the anticipated savings highlighted in this paper, as
    compared to the actual cost of a hosted SAM application. The previously mentioned
    industry standard numbers have used in these formulas.
7   Quantifying the Value of Software Asset Management



Investment                 Formula                                       Annual Costs

 Hosted SAM Software $20 (Annual fee per PC) X 500 PCs                   $10,000
                     Total Investment                                    $10,000

Return                     Formula                                       Annual Savings
   Increased Help Desk 500 PCs X 4 (Support tickets per PC each          $16,000
              Efficiency year) X $40 (Cost per ticket) X 20%
                         (Reduction in average call length)
         Automation of 500 PCs X 0.25 (Hours it takes to audit           $8,250
       Software Audits each PC) X $33 (Hourly pay rate for IT
                         staff) X 2 (# of annual audits)
     Reduced Employee 500 employees X 10% (Employees that                $140,400
             Downtime encounter productivity loss) X 156 (# of
                         hours per year spent using unauthorized
                         software) X $18 (Average hourly pay
                         rate)
      Improved License
          Management
        Reduced Risk of 15% (Probability of audit) X 500 PCs X
  Penalties due to Non- 5% (PCs with at least 1 unlicensed app) X        $112,500
            Compliance $30,000 (Fine per unlicensed app)
  Elimination of License Average # of unused licenses per PC X           $195,000
        Underutilization Average cost per license x 500 PCs
                         Total Annual Savings                            $472,150

Total Annual ROI


                           Savings ($472,150) / Costs ($10,000)          4721%



     Conclusion
     As companies continue to rely on software applications to support vital operations, the
     need to better manage these applications – from the time they are purchased, until they
     are removed or replaced – is becoming increasingly critical. Companies that do not
     implement SAM practices and tools are likely to face significant financial damages due
     to productivity losses, underutilization of licenses, and compliance issues. At the same
     time, the ROI that can be achieved with software asset management solutions is
     significant, with the financial savings far outweighing the costs.
8   Quantifying the Value of Software Asset Management


                             SAManage: On-Demand IT Asset Management Services
                             SAManage is a leading provider of robust on-demand IT Asset
                             Management services. The SAManage cutting-edge solutions empower
                             companies to gain complete visibility into their IT environments, so they
                             can more effectively manage their assets, minimize related risks,
                             facilitate compliance, and optimize utilization.

                             With SAManage, companies can:
                                 Easily deploy comprehensive IT Asset Management at multiple
                                   locations across the enterprise
                                 Achieve greater visibility into asset inventory and usage
                                 Proactively detect and prevent IT-related risks such as illegal
                                   software, security gaps, or missing patches
                                 Ensure compliance with software licensing agreements and
                                   regulatory guidelines
                                 Reduce technology costs and improve budget management
                                 Minimize the time and effort required to address helpdesk issues
                                   with instant access to asset configuration data
                                 Capture and organize IT contracts and software licenses in a
                                   centralized system
                                 Correlate assets to contracts and leases as well as their
                                   department and business units, users, and technical owners

                             Powerful and Secure On-Demand Solutions
                             The SAManage on-demand service completely eliminates the time and
                             expense associated with implementing an IT Asset Management solution.
                             There are no servers to manage, and no software to install. Enterprise-
                             wide deployments can be completed in just minutes, and new features
                             and enhancements are available immediately. SAManage offers a free
                             trial period that allows you to “try before you buy”. To find out more and
                             start your free trial, visit our Web site at www.SAManage.com.


SAManage

16541 Redmond Way,
Suite 416
Redmond, WA 98052


Tel: 888-250-8971
Fax: 425-940-7749
info@SAManage.com

Weitere ähnliche Inhalte

Mehr von Samanage

Samanage IT Asset Management Solution Decreases Time Spent Managing Hardware ...
Samanage IT Asset Management Solution Decreases Time Spent Managing Hardware ...Samanage IT Asset Management Solution Decreases Time Spent Managing Hardware ...
Samanage IT Asset Management Solution Decreases Time Spent Managing Hardware ...Samanage
 
College of the Holy Cross Simplifies IT Asset Management and Streamlines Work...
College of the Holy Cross Simplifies IT Asset Management and Streamlines Work...College of the Holy Cross Simplifies IT Asset Management and Streamlines Work...
College of the Holy Cross Simplifies IT Asset Management and Streamlines Work...Samanage
 
A New IT Service Management Solution Shifts Perception of IT at Medifit
A New IT Service Management Solution Shifts Perception of IT at MedifitA New IT Service Management Solution Shifts Perception of IT at Medifit
A New IT Service Management Solution Shifts Perception of IT at MedifitSamanage
 
Sheridan School District Simplifies Usability and IT Asset Management with Sa...
Sheridan School District Simplifies Usability and IT Asset Management with Sa...Sheridan School District Simplifies Usability and IT Asset Management with Sa...
Sheridan School District Simplifies Usability and IT Asset Management with Sa...Samanage
 
How The Riverside Company Got Control of Their IT Service Management
How The Riverside Company Got Control of Their IT Service ManagementHow The Riverside Company Got Control of Their IT Service Management
How The Riverside Company Got Control of Their IT Service ManagementSamanage
 
Let's Take IT Outside: Extending Your IT Service Catalog
Let's Take IT Outside: Extending Your IT Service CatalogLet's Take IT Outside: Extending Your IT Service Catalog
Let's Take IT Outside: Extending Your IT Service CatalogSamanage
 
From Zero to Hero: The Path to IT Service Excellence Webinar
From Zero to Hero:  The Path to IT Service Excellence WebinarFrom Zero to Hero:  The Path to IT Service Excellence Webinar
From Zero to Hero: The Path to IT Service Excellence WebinarSamanage
 
ITSM SaaS vs. On-Premise
ITSM SaaS vs. On-PremiseITSM SaaS vs. On-Premise
ITSM SaaS vs. On-PremiseSamanage
 
Business Case For IT Asset Management
Business Case For IT Asset ManagementBusiness Case For IT Asset Management
Business Case For IT Asset ManagementSamanage
 

Mehr von Samanage (9)

Samanage IT Asset Management Solution Decreases Time Spent Managing Hardware ...
Samanage IT Asset Management Solution Decreases Time Spent Managing Hardware ...Samanage IT Asset Management Solution Decreases Time Spent Managing Hardware ...
Samanage IT Asset Management Solution Decreases Time Spent Managing Hardware ...
 
College of the Holy Cross Simplifies IT Asset Management and Streamlines Work...
College of the Holy Cross Simplifies IT Asset Management and Streamlines Work...College of the Holy Cross Simplifies IT Asset Management and Streamlines Work...
College of the Holy Cross Simplifies IT Asset Management and Streamlines Work...
 
A New IT Service Management Solution Shifts Perception of IT at Medifit
A New IT Service Management Solution Shifts Perception of IT at MedifitA New IT Service Management Solution Shifts Perception of IT at Medifit
A New IT Service Management Solution Shifts Perception of IT at Medifit
 
Sheridan School District Simplifies Usability and IT Asset Management with Sa...
Sheridan School District Simplifies Usability and IT Asset Management with Sa...Sheridan School District Simplifies Usability and IT Asset Management with Sa...
Sheridan School District Simplifies Usability and IT Asset Management with Sa...
 
How The Riverside Company Got Control of Their IT Service Management
How The Riverside Company Got Control of Their IT Service ManagementHow The Riverside Company Got Control of Their IT Service Management
How The Riverside Company Got Control of Their IT Service Management
 
Let's Take IT Outside: Extending Your IT Service Catalog
Let's Take IT Outside: Extending Your IT Service CatalogLet's Take IT Outside: Extending Your IT Service Catalog
Let's Take IT Outside: Extending Your IT Service Catalog
 
From Zero to Hero: The Path to IT Service Excellence Webinar
From Zero to Hero:  The Path to IT Service Excellence WebinarFrom Zero to Hero:  The Path to IT Service Excellence Webinar
From Zero to Hero: The Path to IT Service Excellence Webinar
 
ITSM SaaS vs. On-Premise
ITSM SaaS vs. On-PremiseITSM SaaS vs. On-Premise
ITSM SaaS vs. On-Premise
 
Business Case For IT Asset Management
Business Case For IT Asset ManagementBusiness Case For IT Asset Management
Business Case For IT Asset Management
 

Kürzlich hochgeladen

UiPath Studio Web workshop series - Day 6
UiPath Studio Web workshop series - Day 6UiPath Studio Web workshop series - Day 6
UiPath Studio Web workshop series - Day 6DianaGray10
 
Empowering Africa's Next Generation: The AI Leadership Blueprint
Empowering Africa's Next Generation: The AI Leadership BlueprintEmpowering Africa's Next Generation: The AI Leadership Blueprint
Empowering Africa's Next Generation: The AI Leadership BlueprintMahmoud Rabie
 
AI Fame Rush Review – Virtual Influencer Creation In Just Minutes
AI Fame Rush Review – Virtual Influencer Creation In Just MinutesAI Fame Rush Review – Virtual Influencer Creation In Just Minutes
AI Fame Rush Review – Virtual Influencer Creation In Just MinutesMd Hossain Ali
 
Salesforce Miami User Group Event - 1st Quarter 2024
Salesforce Miami User Group Event - 1st Quarter 2024Salesforce Miami User Group Event - 1st Quarter 2024
Salesforce Miami User Group Event - 1st Quarter 2024SkyPlanner
 
COMPUTER 10: Lesson 7 - File Storage and Online Collaboration
COMPUTER 10: Lesson 7 - File Storage and Online CollaborationCOMPUTER 10: Lesson 7 - File Storage and Online Collaboration
COMPUTER 10: Lesson 7 - File Storage and Online Collaborationbruanjhuli
 
Meet the new FSP 3000 M-Flex800™
Meet the new FSP 3000 M-Flex800™Meet the new FSP 3000 M-Flex800™
Meet the new FSP 3000 M-Flex800™Adtran
 
Introduction to Matsuo Laboratory (ENG).pptx
Introduction to Matsuo Laboratory (ENG).pptxIntroduction to Matsuo Laboratory (ENG).pptx
Introduction to Matsuo Laboratory (ENG).pptxMatsuo Lab
 
Designing A Time bound resource download URL
Designing A Time bound resource download URLDesigning A Time bound resource download URL
Designing A Time bound resource download URLRuncy Oommen
 
Bird eye's view on Camunda open source ecosystem
Bird eye's view on Camunda open source ecosystemBird eye's view on Camunda open source ecosystem
Bird eye's view on Camunda open source ecosystemAsko Soukka
 
Basic Building Blocks of Internet of Things.
Basic Building Blocks of Internet of Things.Basic Building Blocks of Internet of Things.
Basic Building Blocks of Internet of Things.YounusS2
 
Machine Learning Model Validation (Aijun Zhang 2024).pdf
Machine Learning Model Validation (Aijun Zhang 2024).pdfMachine Learning Model Validation (Aijun Zhang 2024).pdf
Machine Learning Model Validation (Aijun Zhang 2024).pdfAijun Zhang
 
Anypoint Code Builder , Google Pub sub connector and MuleSoft RPA
Anypoint Code Builder , Google Pub sub connector and MuleSoft RPAAnypoint Code Builder , Google Pub sub connector and MuleSoft RPA
Anypoint Code Builder , Google Pub sub connector and MuleSoft RPAshyamraj55
 
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019IES VE
 
IaC & GitOps in a Nutshell - a FridayInANuthshell Episode.pdf
IaC & GitOps in a Nutshell - a FridayInANuthshell Episode.pdfIaC & GitOps in a Nutshell - a FridayInANuthshell Episode.pdf
IaC & GitOps in a Nutshell - a FridayInANuthshell Episode.pdfDaniel Santiago Silva Capera
 
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...UbiTrack UK
 
9 Steps For Building Winning Founding Team
9 Steps For Building Winning Founding Team9 Steps For Building Winning Founding Team
9 Steps For Building Winning Founding TeamAdam Moalla
 
Building Your Own AI Instance (TBLC AI )
Building Your Own AI Instance (TBLC AI )Building Your Own AI Instance (TBLC AI )
Building Your Own AI Instance (TBLC AI )Brian Pichman
 
COMPUTER 10 Lesson 8 - Building a Website
COMPUTER 10 Lesson 8 - Building a WebsiteCOMPUTER 10 Lesson 8 - Building a Website
COMPUTER 10 Lesson 8 - Building a Websitedgelyza
 
Computer 10: Lesson 10 - Online Crimes and Hazards
Computer 10: Lesson 10 - Online Crimes and HazardsComputer 10: Lesson 10 - Online Crimes and Hazards
Computer 10: Lesson 10 - Online Crimes and HazardsSeth Reyes
 

Kürzlich hochgeladen (20)

UiPath Studio Web workshop series - Day 6
UiPath Studio Web workshop series - Day 6UiPath Studio Web workshop series - Day 6
UiPath Studio Web workshop series - Day 6
 
Empowering Africa's Next Generation: The AI Leadership Blueprint
Empowering Africa's Next Generation: The AI Leadership BlueprintEmpowering Africa's Next Generation: The AI Leadership Blueprint
Empowering Africa's Next Generation: The AI Leadership Blueprint
 
AI Fame Rush Review – Virtual Influencer Creation In Just Minutes
AI Fame Rush Review – Virtual Influencer Creation In Just MinutesAI Fame Rush Review – Virtual Influencer Creation In Just Minutes
AI Fame Rush Review – Virtual Influencer Creation In Just Minutes
 
Salesforce Miami User Group Event - 1st Quarter 2024
Salesforce Miami User Group Event - 1st Quarter 2024Salesforce Miami User Group Event - 1st Quarter 2024
Salesforce Miami User Group Event - 1st Quarter 2024
 
COMPUTER 10: Lesson 7 - File Storage and Online Collaboration
COMPUTER 10: Lesson 7 - File Storage and Online CollaborationCOMPUTER 10: Lesson 7 - File Storage and Online Collaboration
COMPUTER 10: Lesson 7 - File Storage and Online Collaboration
 
Meet the new FSP 3000 M-Flex800™
Meet the new FSP 3000 M-Flex800™Meet the new FSP 3000 M-Flex800™
Meet the new FSP 3000 M-Flex800™
 
Introduction to Matsuo Laboratory (ENG).pptx
Introduction to Matsuo Laboratory (ENG).pptxIntroduction to Matsuo Laboratory (ENG).pptx
Introduction to Matsuo Laboratory (ENG).pptx
 
Designing A Time bound resource download URL
Designing A Time bound resource download URLDesigning A Time bound resource download URL
Designing A Time bound resource download URL
 
Bird eye's view on Camunda open source ecosystem
Bird eye's view on Camunda open source ecosystemBird eye's view on Camunda open source ecosystem
Bird eye's view on Camunda open source ecosystem
 
Basic Building Blocks of Internet of Things.
Basic Building Blocks of Internet of Things.Basic Building Blocks of Internet of Things.
Basic Building Blocks of Internet of Things.
 
Machine Learning Model Validation (Aijun Zhang 2024).pdf
Machine Learning Model Validation (Aijun Zhang 2024).pdfMachine Learning Model Validation (Aijun Zhang 2024).pdf
Machine Learning Model Validation (Aijun Zhang 2024).pdf
 
Anypoint Code Builder , Google Pub sub connector and MuleSoft RPA
Anypoint Code Builder , Google Pub sub connector and MuleSoft RPAAnypoint Code Builder , Google Pub sub connector and MuleSoft RPA
Anypoint Code Builder , Google Pub sub connector and MuleSoft RPA
 
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019
IESVE Software for Florida Code Compliance Using ASHRAE 90.1-2019
 
IaC & GitOps in a Nutshell - a FridayInANuthshell Episode.pdf
IaC & GitOps in a Nutshell - a FridayInANuthshell Episode.pdfIaC & GitOps in a Nutshell - a FridayInANuthshell Episode.pdf
IaC & GitOps in a Nutshell - a FridayInANuthshell Episode.pdf
 
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...
UWB Technology for Enhanced Indoor and Outdoor Positioning in Physiological M...
 
9 Steps For Building Winning Founding Team
9 Steps For Building Winning Founding Team9 Steps For Building Winning Founding Team
9 Steps For Building Winning Founding Team
 
201610817 - edge part1
201610817 - edge part1201610817 - edge part1
201610817 - edge part1
 
Building Your Own AI Instance (TBLC AI )
Building Your Own AI Instance (TBLC AI )Building Your Own AI Instance (TBLC AI )
Building Your Own AI Instance (TBLC AI )
 
COMPUTER 10 Lesson 8 - Building a Website
COMPUTER 10 Lesson 8 - Building a WebsiteCOMPUTER 10 Lesson 8 - Building a Website
COMPUTER 10 Lesson 8 - Building a Website
 
Computer 10: Lesson 10 - Online Crimes and Hazards
Computer 10: Lesson 10 - Online Crimes and HazardsComputer 10: Lesson 10 - Online Crimes and Hazards
Computer 10: Lesson 10 - Online Crimes and Hazards
 

Samanage Software Asset Management Roi White Paper

  • 1. 1 Quantifying the Value of Software Asset Management Quantifying the Value of Software Asset Management Executive Summary Over the past few decades, employees have come to rely more and more heavily on software solutions to automate and enhance a variety of core business activities – from sales order entry and inventory tracking to payroll processing and financial reporting. As a result, companies of all sizes and across all industries now find themselves struggling to control the growing number of software applications installed on their servers and desktops. Studies show that the average employee PC has close to 150 software titles installed, including fixes, drivers, and service packs. Software Asset Management (“SAM”) systems combine processes and technologies to improve the way software applications are utilized, tracked, and managed throughout all phases of their lifecycle. There are many advantages that can be achieved through the use of SAM. Improved application performance and increased productivity of both IT staff and end users are chief among them. SAM offers significant financial benefits, lowering the total cost of software ownership and accelerating the return on software investment. According to Christopher Germann, senior research analyst at Gartner Group, “organizations can realize cost savings of between 5 percent and 35 percent by implementing focused software asset management practices." This paper provides an overview of software asset management and its key benefits. Additionally, it highlights the areas where an SAM solution can deliver the most tangible, quantifiable cost savings to an organization. Readers will also learn how to calculate the potential return on investment (ROI) on SAM in order to present senior management with a compelling business case for the solution. What is Software Asset Management? Software applications have become a vital asset for today’s businesses, providing the foundation for employee productivity and output, and supporting mission-critical processes that drive operational efficiency and profitability. Companies spend more today on software than ever before. In fact, while tough economic times are impacting most other industries, software vendors are actually seeing their markets increase. Forrester Research predicts that global spending on software will reach $341 billion in 2008, a 9 percent increase over 2007. As more and more software is purchased, companies must find better ways to justify and optimize their investments. Additionally, software is unique from other technology
  • 2. 2 Quantifying the Value of Software Asset Management solutions, like hardware, because it is intangible, making it much harder to monitor, control, and manage. Software asset management is a crucial business practice that combines policies, processes, and supporting technologies to improve software budgeting, purchasing, utilization, management, control, and security across an entire enterprise. Software asset management is not a one-time project. Because technology environments change so rapidly, SAM must be viewed as an ongoing process in order to ensure continuous compliance, performance, and value. SAM empowers businesses to improve all facets of software acquisition, use, and administration. As a result, the value and impact of software solutions is dramatically improved throughout all phases of their lifecycle. Today’s most popular SAM applications include fully integrated auditing and tracking tools, a centralized information repository, advanced monitoring and analysis, and other robust features to enhance the following software-related functions:  Budgeting and acquisition  Installation and deployment  Inventory management  Logging and tracking of settings and configurations  Usage measurement  Monitoring of security solutions, such as anti-virus software  Performance optimization Why You Need an SAM Solution The need for SAM is driven by many factors, including the rising cost of enterprise software and the growing portions of IT budgets allocated towards software purchases and subscriptions. Also adding to the urgency is the growing reliance of end-users on software applications in order to execute their day-to-day activities, and the challenges faced by IT departments in supporting these increasingly complex systems. With SAM, businesses are able to:  Establish and enforce formal procedures for budgeting, purchasing, deploying, and using software  Enhance strategic technology planning and make more informed software purchasing decisions by obtaining complete visibility into existing inventories  Increase employee efficiency by accelerating the deployment of mission-critical software solutions  Ensure adherence to standards and security policies  Reduce IT support costs by minimizing the number and length of helpdesk calls  Streamline administration of software assets, including upgrades and routine maintenance. Administration currently accounts for close to 33 percent of software budget consumption, according to Forrester Research. And the
  • 3. 3 Quantifying the Value of Software Asset Management Information Technology Research Institute states that the cost of maintaining software throughout its lifetime can total as much as 90 percent of the initial purchase price. Leading industry analyst firm Gartner also cites reduced software total cost of ownership (TCO), greater economies of scale, improved efficiency and cost- effectiveness of support and help desk operations, and the ability to create knowledge bases and best practices around software management as some of the major benefits SAM can offer. Not less important than the benefits that companies can achieve through the implementation and use of SAM, tough, are the serious commercial, legal, operational, and financial risks they face if they don’t put in place the procedures and tools needed to effectively manage their software applications. A poll conducted recently by IDC shows that less than half of companies have formal SAM practices and procedures in place. , In a similar Gartner study, 38 percent of organizations admitted that they had little more than a basic understanding of their software licenses. This leaves these companies in a highly vulnerable state. For example, without SAM in place, these businesses are subject to:  “Shelfware”, or software solutions that are purchased but never installed or utilized. Gartner estimates that approximately 20 percent of software owned by companies is never used. And, a report issued by Morgan Stanley and AMR Research indicates that almost half of all CRM licenses purchased are never allocated.  Fines and penalties imposed due to non-compliance with licensing agreements.  Significant staff downtime caused by extensive use of unauthorized software, such as IM-style programs or games. A 2007 study by independent market research company NewDiligence claims that 85% of corporate employees use IM, peer-to-peer collaboration or sharing, or anonymizers while at work.  Increased threat from damage caused by hackers, viruses, spyware, malware, etc. Achieving ROI with SAM There are many ways in which companies can realize tangible, measurable return on their investment in software asset management. Some of the main areas that will provide the most significant hard-dollar savings include: Increased Efficiency of IT Support Staff Every day, corporate helpdesks receive numerous calls regarding software-related problems. In order to properly troubleshoot and repair these issues, support staff must collect data about the affected PCs configuration, so they can identify any settings that
  • 4. 4 Quantifying the Value of Software Asset Management may be impacting software performance. Additionally, they must know what version of software the user is running, and any patches or upgrades that have been installed. Without SAM in place, this information must be gathered through lengthy, error-prone “question and answer” sessions with the end-user. An SAM application puts this information instantly at the helpdesk representative’s fingertips, shortening the length of calls dramatically. Additionally, because SAM applications make it easy to determine which software packages are unlicensed or not “corporate-sanctioned”, support professionals can avoid spending time on issues related to unauthorized software. The potential annual savings achieved through increased IT support efficiency can be calculated as follows: Number of PCs X Average number of annual X Cost per ticket X % reduction in support tickets per PC average call length Many companies that utilize software asset management solutions cite average reductions in helpdesk call length of as much as 20 percent. For a company with 500 PCs, averaging 4 helpdesk tickets per PC per year, and assuming a $40 cost per ticket, this can amount to annual savings of $16,000. Automated and Accelerated Software Audits Manual software inventory audits are a cumbersome, time-consuming endeavor for IT teams. Additionally, they are highly error-prone, and often require re-work when human mistakes are uncovered. An SAM application fully automates all activities related to software inventory tracking and auditing, reducing related expenses as follows: Number of PCs X Time required to X Hourly cost of X Number of audits audit each PC IT staff member performed each year According to Salary.com, a leading provider of compensation management solutions and statistics, the average IT technicians makes approximately $33 an hour. Assume that manual audits take 15 minutes, and the average company performs audits bi-annually. Therefore, by automating and accelerating related tasks, SAM solutions can help a company with 500 PCs to reduce software audit costs by $8,250 each year. Improved Employee Productivity Companies of all types and sizes experience significant productivity losses due to the use of unauthorized software. In fact, polls conducted by leading US staffing firm Office Team demonstrate just how big the problem is – employees spend as much as 156
  • 5. 5 Quantifying the Value of Software Asset Management hours each year using IM and other chat programs, games, peer-to-peer file sharing packages, and other productivity-draining applications. SAM solutions identify illegal or unauthorized software packages on employee desktops, so IT staff can immediately remove them. This can significantly increase employee efficiency, resulting in dramatic cost savings: Total number X Est. hours spent X % of employees who X Average of employees using un-authorized experience downtime hourly salary software each year If we conservatively estimate that ten percent of any company’s employee base will experience negative impact to productivity and output as a result of unauthorized software, then an SAM solution can save a company with 500 staff members over $140,000 annually (based on an average salary of $18 per hour, according to the US Department of Labor). Ensured Licensing Compliance The Business Software Alliance (BSA) estimates that solution providers have lost more than $30 billion in revenues due to licensing non-compliance. As a result, more and more organizations are being subject to audits, and those found guilty of piracy or illegal use of software face tremendous financial penalties. Gartner estimates that as many as 70 percent of mid-sized businesses and larger enterprises have already faced an external software audit by the end of 2007. Additionally, studies show that non-compliant companies received average fines of about $30,000 for each piracy instance. By improving the speed and accuracy of the software auditing process, SAM solutions make it easier for IT departments to track existing and allocated licenses. With greater visibility into license compliance, issues can be identified and corrected before an audit takes place. As a result, companies can minimize their exposure and realize the following cost savings: Probability X Number X % of PCs with X fine per of audit of PCs unauthorized unlicensed app software The BSA believes that more than 30 percent of all software installed on corporate PCs is unauthorized. And, many industry pundits put the probability of any given company to face an annual vendor audit at around 15 percent. If we conservatively estimate that only 5% of employee desktops have at least one unlicensed software package running, then a software asset management system can save a 500-employee organization more than $112,000 in potential fines.
  • 6. 6 Quantifying the Value of Software Asset Management Over-Licensing Another issue affecting many companies is underutilization of software licenses. A March, 2007 article published in IT Week claims that every corporation has as much as $390 in unused software on each PC. Additionally, software licenses are often purchased, and never even installed. That means, a company with 500 PCs has over- licensed their various software applications by at least $195,000. SAM makes it easy to identify unused licenses and reallocated as needed, resulting is the following savings: Average # of unused X Average cost X Number of PCs licenses per PC per license Enhanced Protection The level of exposure to threats like viruses or spyware will vary greatly from one company to the next. How much a company stands to lose from a security breach depends upon the type data it maintains, and the type of intellectual properly it keeps in digital format, among other factors. Therefore, it is hard to quantify exactly how much a software asset management solution can save a company in this area. However, SAM dramatically reduces related financial risks by helping companies to identify and correct security gaps such as missing patches or PCs without antivirus software Affordability and Return on Investment The potential financial savings outlined above are even more impressive when you consider the affordability of many software asset management packages. For example, hosted SAM solutions can be acquired for just $20 per PC per month – with absolutely no start-up costs, training fees, or other upfront expenses. For a company with 500 PCs, that amounts to just $10,000 each year, compared to annual cost savings that amount to hundreds of thousands of dollars. The chart below logically depicts the anticipated savings highlighted in this paper, as compared to the actual cost of a hosted SAM application. The previously mentioned industry standard numbers have used in these formulas.
  • 7. 7 Quantifying the Value of Software Asset Management Investment Formula Annual Costs Hosted SAM Software $20 (Annual fee per PC) X 500 PCs $10,000 Total Investment $10,000 Return Formula Annual Savings Increased Help Desk 500 PCs X 4 (Support tickets per PC each $16,000 Efficiency year) X $40 (Cost per ticket) X 20% (Reduction in average call length) Automation of 500 PCs X 0.25 (Hours it takes to audit $8,250 Software Audits each PC) X $33 (Hourly pay rate for IT staff) X 2 (# of annual audits) Reduced Employee 500 employees X 10% (Employees that $140,400 Downtime encounter productivity loss) X 156 (# of hours per year spent using unauthorized software) X $18 (Average hourly pay rate) Improved License Management Reduced Risk of 15% (Probability of audit) X 500 PCs X Penalties due to Non- 5% (PCs with at least 1 unlicensed app) X $112,500 Compliance $30,000 (Fine per unlicensed app) Elimination of License Average # of unused licenses per PC X $195,000 Underutilization Average cost per license x 500 PCs Total Annual Savings $472,150 Total Annual ROI Savings ($472,150) / Costs ($10,000) 4721% Conclusion As companies continue to rely on software applications to support vital operations, the need to better manage these applications – from the time they are purchased, until they are removed or replaced – is becoming increasingly critical. Companies that do not implement SAM practices and tools are likely to face significant financial damages due to productivity losses, underutilization of licenses, and compliance issues. At the same time, the ROI that can be achieved with software asset management solutions is significant, with the financial savings far outweighing the costs.
  • 8. 8 Quantifying the Value of Software Asset Management SAManage: On-Demand IT Asset Management Services SAManage is a leading provider of robust on-demand IT Asset Management services. The SAManage cutting-edge solutions empower companies to gain complete visibility into their IT environments, so they can more effectively manage their assets, minimize related risks, facilitate compliance, and optimize utilization. With SAManage, companies can:  Easily deploy comprehensive IT Asset Management at multiple locations across the enterprise  Achieve greater visibility into asset inventory and usage  Proactively detect and prevent IT-related risks such as illegal software, security gaps, or missing patches  Ensure compliance with software licensing agreements and regulatory guidelines  Reduce technology costs and improve budget management  Minimize the time and effort required to address helpdesk issues with instant access to asset configuration data  Capture and organize IT contracts and software licenses in a centralized system  Correlate assets to contracts and leases as well as their department and business units, users, and technical owners Powerful and Secure On-Demand Solutions The SAManage on-demand service completely eliminates the time and expense associated with implementing an IT Asset Management solution. There are no servers to manage, and no software to install. Enterprise- wide deployments can be completed in just minutes, and new features and enhancements are available immediately. SAManage offers a free trial period that allows you to “try before you buy”. To find out more and start your free trial, visit our Web site at www.SAManage.com. SAManage 16541 Redmond Way, Suite 416 Redmond, WA 98052 Tel: 888-250-8971 Fax: 425-940-7749 info@SAManage.com