Software has become a key accelerator of company growth and a major source of sustainable competitive advantage. Not surprisingly, most organizations are pinning even higher expectations on leveraging software investments to fuel the transition from brick-and-mortar businesses to e-business infrastructures. The mantra of many CEOs has become: we must rapidly and continually harness new technology to enable customer-driven processes, satisfaction and retention.
Sounds simple enough, and certainly there have been some sterling industry successes. Yet, intangible characteristics of software — unlike physical networking, telecommunications and hardware assets — make this a complex challenge.
Software is a unique corporate asset that is:
Constantly Changing — Software updates and new releases have become a continuous, never-ending stream. Over the last two years, monster service packs and frequently revised browsers have become common. Internal Web developers are also creating large inventories of customized code to support transaction and content sites. If the life cycle of these software assets is not actively managed, e-business infrastructures will be weakened.
Global — Software is now a ubiquitous, internationally distributed corporate asset that can be difficult to monitor, track and update. Additionally, export encryption restrictions and international import/export tax laws place specific limits on usage and versions deployed in various countries.
Copyrighted — Software comes with unique legal issues including copyright laws that are enforced by CAAST (Canadian Alliance Against Software Theft) in Canada and BSA (Business Software Alliance) in the United States.
An Expense — Despite the fact that software has reportedly become the second largest item on many balance sheets today, it still enters many organizations through individual Internet-based orders or department-level purchases. This unmonitored activity can negate the benefits of volume software purchases.
Difficult to Police — Browser-based applications provided by suppliers or clients often defy centralized appropriate use and computing policies. This can expose organizations to viruses and trial software/services obligations.
The complexities are compounded by the mission-critical nature of major infrastructure implementations such as Windows 2000, for example. Companies are working through important strategic and tactical questions regarding the acquisition, deployment and management of Windows 2000 and other infrastructure software. Questions about the software life cycle of such products include:
• How will we integrate technology planning with business planning so that platform and application requirements of customers and business units are clearly understood, prioritized and acted upon?
• What existing licence rights do we have — given previous software investments in Windows 3.1, Windows95, 98 or NT 4.X — that could reduce our acquisition costs?
• What electronic software distribution skills and systems management tool capabilities will facilitate on-time deployment?
• Have we established software maintenance procedures and software compliance policies to avoid unnecessary legal risks?
Answers to these and other questions can greatly affect the deployment and integration of software, and ultimately determine whether or not the challenge of building (and constantly rebuilding) software-driven e-business infrastructures is met.
SAM Provides the Answers
I have found (as have many Fortune 1000 companies) that Software Asset Management (SAM) is an important and powerful approach to getting answers. SAM can be defined as any and all policies, processes, technologies, people, and partners applied to the procurement, delivery, deployment, administration, and management of network desktop/laptop or server software assets.
Each organization may define SAM differently, but common strategies for implementing SAM typically focus on a core set of software disciplines and management approaches referred to as a SAM Framework. The framework helps organizations deal with the intangible life-cycle issues outlined above, as well as the specific technical and business challenges of implementing new enterprise software products. These disciplines include:
• Establishing common business-unit goals through integrated technology planning to better synchronize and align efforts and exploit integrated strategies for deploying new technologies.
• Leveraging asset management repositories and desktop management tools (e.g. MainControl EM/Power, Peregrine Asset Center, Microsoft Systems Management Server, Intel LANDesk, etc.) to optimize resources. Properly deployed, these tools help companies identify immediate cost savings (e.g., discovering that software is owned but has not been deployed to end users).
• Assessing and refining acquisition processes, including standardization of software versions and use of Volume Licence Agreements (VLAs).
• Conducting regular software reviews to check available purchase records and inventory data. This practice can help avoid over- or under-licensing and lead to the identification of new opportunities for standardization.
• Establishing common desktop management procedures, ranging from how Install-Move-Add-Change (IMAC) procedures are carried out, to properly tracking end-of-contract dates for assets under lease agreements.
A variety of partners have emerged with asset management skill-sets and Service Level Agreements that cover asset tracking, tagging and retirement, and other processes and practices. Working with these providers to establish a comprehensive SAM Framework to support the infrastructure is an excellent way to offload non-value-added activities and create a roadmap for how software will be managed for the organization.
Avoiding Software Pitfalls
As a long-time advocate of SAM for dealing with software complexity, here are some pitfalls to avoid:
• Functional managers not enforcing standards;
• IT operations bypassing software tracking disciplines in favor of a single technology “silver bullet”;
• Business units developing their own version of SAM that can result in low optimization of software assets and partially enabled e-business infrastructures.
Also, keep in mind that like an e-business strategy, SAM will require senior management sponsorship, so having a clearly communicated vision of why and how the software investment will be maximized is necessary.
SAM takes some effort, but it’s worth it to establish a solid e-business infrastructure and to realize the added benefits of reducing software costs throughout the life cycle from acquisition to retirement. As a CIO contemplating software-driven e-business infrastructures, have your own mantra for success: Manage software, don’t let it manage you!
Chris Day is Vice-President of IT, Corporate Software & Technology Inc. (CS&T), Norwood, Mass., and is responsible for managing all North American IT operations and assets including a Web-based transaction site generating over $3 million in revenue per month. He has been actively engaged in setting an industry definition and implementing best practices on behalf of Fortune 1000 clients for a number of years