software sourcing presentation

1. Prepared by:
Manoj Abraham

2. Scope of the project:
The company has a requirement of the existing
software renewal or source for the year 2015 in a
cost effective manner.

3. Facts:
 Currently under the existing maintenance agreement 1800 users
have this software installed on their desktops. In addition 600 users
have this software installed with no maintenance and are one version
behind the rest of the environment. These licenses are now required
to be brought into the next maintenance agreement.

4. Objectives:
 Reduce the cost of software for the year 2015.
 Capture resulting savings.
 Create contractual alliances with service providers to
support the long term goal of the company.
 Maintain and improve product quality.
 Improve business functions.
 Optimize the total purchasing process.

5. Sourcing Project Methodologies:
Step 1
Analysis
Step 2
Plan
Step 4
Optimize
Step 3
Act
 Requirement
Analysis
 Demand
Planning
 Develop
Project Team
 Budgeting/Spend
Analysis
 Market Research/
Value Analysis
 Sourcing Strategy
 Identify/Prequalify
Service Providers
 Shortlisting
Providers
 RFx
 Negotiation
 Review
 Approval
 Contract
 Implementation
 Performance
Measurements
 Continuous
Improvement

6. Analysis:
Requirement Analysis:
1. Analyse the current and future requirements.
2. First step is to collect the usage data (if possible for the last 3 years or at
least for the current year).
3. Check total number of active/full featured users and passive/limited featured
users (i.e. out of 2400 who all are using the full features and limited features
of the software. This statistics can be collected from system logs that will log
each user logging into the system through administrator settings. This will
help to identify the actual requirements).

7. 4. According to the software requirement analysis we can identify the number of actual
need of full featured licenses and limited featured licenses.
5. Check whether we need to cut short the number of full featured licenses for the next
year.
6. Check whether we need to continue with the existing plan and renew if there is no
expansion.
7. Check whether we need to expand the number of full featured licenses and limited
featured licenses according to the company’s requirement for the next year.
8. Request for Proposal from the provider to consolidate all licenses under maintenance
and co-term as per the previous license end dates.
9. Check the bundle rates and also review different options for consolidation of both
versions if necessary.

8. Some of the key software licensing models:
 Node locked
 Feature concurrent user
 Devise based pricing
 Feature based concurrent user
 Pay as you use
 Software as Service (SaaS)
 Client Access License (CLA)
 Utility model (Usage, Time, Number of Transactions)
 Cloud and Desktop or Server Virtualization etc.

9. Assumptions:
1. Check if existing system is meeting the future requirements, then negotiate
the price for a long term renewal like 2 or 3 years instead of 1 year with out
any hidden costs.
2. As per the software requirement analysis for the next year negotiate the
price for a Tier based licensing i.e. $$ for first 500 users, $$$ for next 500
users etc.. this will help us to reduce the cost based on the number of actual
users instead of 2400.
3. Analyze the actual software requirements for the next year based on the
research and negotiate with the provider for Node locked, Feature
Concurrent User, Devise Based, Feature Based Concurrent User, Pay as
you use, SaaS, Client Access License, Utility, Cloud and Desktop/Server
Virtualization etc. within the stipulated budget.
4. Check for the enterprise package with unlimited users pricing.

10. Conclusion:
Based on the research, We could choose one of the given four assumptions
within the stipulated budget according to the next year software requirement
analysis. Also explore all the possible global sourcing methods with multiple
service providers for the same software or any other software with more
features available in a competitive price.
Thank you
Manoj Abraham