Software asset management: reducing IT costs


With budgets shrinking across the board, CIOs need to do more with less. While technology can undoubtedly deliver cost benefits, failure to manage IT effectively means these savings can quickly be eroded.

The procurement and management of software in particular, is one area in which expenditure can easily spiral out of control. As a result, it’s crucial that CIOs manage their software assets to deliver the maximum benefits for the minimum cost. Here are four practical ways that CIOs can reduce IT costs through software asset management (SAM).

1. Optimising existing software licenses

The first way to reduce costs is by optimising existing software licenses. To do this, companies need a clear overview of all services and applications currently installed, and in use across the organisation.

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This creates a software portfolio that can be compared against existing contracts and licenses to identify unnecessary costs, or whether additional licenses are required. If additional licenses are required, companies should take the opportunity to assess the use cases for the software to avoid any unnecessary investment.

2. Evaluating how software is used

As well as an overview of the software in use, understanding if the need for a particular piece of software is essential; CIOs must understand who is using which software and how it aligns with their needs and role.

This is important because employees change roles or leave a company – leading to situations where the applications are no longer required, but the maintenance and payment for that technology still continues. Does an organisation need 1,000 Microsoft Office licenses, if only 500 people use it?

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By having a firm handle on the specific technology needs of an organisation, organisations can make more targeted procurement decisions. That way, everyone always has the tools to do his or her job effectively, procured at the lowest cost possible.

3. Consolidating software

Effective SAM and consolidation software can have a dramatic effect on the number and type of required licenses. It’s not unusual for companies to have several applications performing similar functions – it’s common, for example, for businesses to have multiple instances of similar business productivity tools, all performing much the same function.

This not only places an unnecessary workload on those tasked with managing software, but also wastes money. The consolidation of applications can very quickly lead to savings, without sacrificing functionality.

4. Controlling the cloud

Besides increasing operational flexibility, achieving lower costs is often a motivating factor behind embracing cloud computing. However, the cloud complicates SAM for CIOs as there are no longer a fixed number of users, workloads or devices.

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As a result, one way to control software in the cloud is through a cloud ‘dashboard’ which provides visibility into what applications are being used and how.

This is important, as where software may have previously sat on a single owned server, it may now reside on virtual machines spread across multiple locations, which affects licensing considerations.

For example, many End User Licensing Agreements prohibit the use of software in a cloud environment, which could render an organisation non-compliant and in need of additional licenses.

A stitch in time saves nine

Each of the four ways to reduce costs through SAM outlined above can deliver significant savings for CIOs, however, to reap the maximum rewards all four need to be executed frequently.

>See also: Data centres and licences could harm your business

If software goes unmanaged for an extended length of time, costs will not only spiral, but any future efforts to digitally transform your organisation will become that much harder – when it comes to software asset management, a stitch in time saves nine.


Sourced by Tony Spruyt, UK SAM services manager at COMPAREX

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Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...