Many large enterprises have only a limited understanding of how many software licenses they have purchased, how much of their licensed software is actually being used on a daily basis, and where or how much they are overspending or underspending on commercial software.
At a time when information technology (IT) organizations are operating on tight budgets and so many technology projects are being closely scrutinized by the finance department to keep costs down, this lack of visibility and governance into license compliance and software spending is counterproductive. Furthermore, the lack of insight into an organization’s license position also presents serious risks associated with software vendor audits.
Companies need to institute a software asset management and license optimization program that includes not just a technology solution, but also a change in processes and the addition of people who are experts in software governance and licensing. This kind of thorough program can help organizations improve their management and use of software licenses. As a result, they can potentially save huge amounts of money. At the same time, these programs and technology solutions can help enterprises maintain license compliance and mitigate risk.
CURRENT SOFTWARE LICENSING ENVIRONMENT: LOTS OF WASTE
Software licensing can account for a significant share of all IT spending, as much as 30 percent according to some estimates. While business software is clearly a strategic asset for companies—running operations such as finance, human resources, sales, customer management, distribution, etc.—many organizations do not have a program in place or a commercial solution to manage and optimize software license spending.
Instead, they rely heavily on manual processes. Due to the complexity of today’s highly dynamic, virtualized IT environments, combined with Software vendor audits are not related to AICPA audits. the complexity inherent in license agreements and models, companies are not able to achieve the goal of effectively managing software assets. Even those organizations that do have a software asset management program in place in many cases have not combined their efforts to entrench both people and processes into that program.