Bedigital have launched a new offering to the market – Agile TAM. It’s the result of working with several large organisations over the last 18 months and looking at the problem as we would when developing any new service for clients: By understanding the outcomes they are trying to achieve and looking at the pain-points which are currently being experienced.
I’m writing this Blog to share some of the things we’ve identified when working out what’s eating up costs when it comes to asset management and finding ways to cut down the 40% waste that most companies experience.
Software asset management (SAM) systems and processes were put in place as a response to increasing cost and risk to the organisation. However, the approaches used haven’t changed much in the last 15-20 years even though the industry and complexity has. This means there are lots of leaders like you pulling their hair out in frustration at the cost, inefficiency, and rigidity of what they’ve got to work with. With 30 to 50 per cent of tech spend going on assets, this can work out to be a million-pound problem.
I’m absolutely sure that for a long time your system worked pretty well, otherwise, you wouldn’t have invested. It put the onus on central teams to monitor and acquire licenses and maintain registers of assets, which is fine when most the software being used by your teams is simple and consistent. When people have set roles then they need set software, right? So, SAM developed simply, as an audit function to keep the books balanced.
Except, over time, that’s stopped being the case for most large and complex organisations. In fact, companies like yours are wasting up to 40 per cent of their budget on SAM that is failing to keep up with the demands of your users. You are not alone, if that makes you feel better. However, there are some common traps that large organisations find themselves falling into:
Your employees have licenses for things they don’t need anymore
Most SAM functions are reactive and certainly not proactive. This means that once an employee has gone through the extended bureaucracy of ordering a piece of software that they might need for say a month or two, they have it for at least a year or more because that’s just how the system works. The system doesn’t recognise when someone’s stopped using something. So that costs just rolls on month after month costing you money unnecessarily. Effective SAM system should be proactive – based on usage to give the company a clear view of what’s being used and what isn’t. It should also be coupled with a simple way of cancelling or re-using the assets to maximise value.
You haven’t fully decommissioned your legacy
I’ve worked with companies who have two, sometimes three, systems doing the same job. This isn’t insanity so much, but more a response to fear and changing priorities. Systems and software need to be modernised. However, project teams then tend to come up against obstacles for migrating all work onto the new platform (whether technical or behavioural – people can get very sentimental about CRM). This then means some processes or data stay on old systems not for six months or a year, but indefinitely. Having a clear and effective exit plan is the only way out of this expensive and cumbersome situation which means paying for three licenses when you only need one. The function of TAM should be proactive in helping ensure that the impact of compromises and delays are understood so that prioritisation considers all the implications. If you don’t the impact can be eye watering. In the last year we saved one client £5m/annum by identifying the £200k of work required to complete the decommissioning of legacy systems and release the licenses.
You must save money now!
The truth about squeezing out proper meaningful savings from your SAM is that only some of it comes now – the rest comes to those who plan. The majority come over the next two to three years potentially longer, if you’re a large organisation. We talk about big companies being like supertankers, so why do you think we can manage SAM like we’re on a dirt bike? Managers and architects should be thinking about what’s going to be saving us money in three to five years’ time, not trying to forage for scraps right now, and conversely, whilst it is often more than scraps now, that just shows how much mis-alignment has built up. By focusing on the outcome and understanding your roadmaps, you can plan your future renewals, preparing to negotiate with your suppliers or finding vendors that can do things more effectively. This is what’s going to save you the most, only focusing on saving money this quarter or even this year is always going to drive perverse incentives and often end up costing you more in the long run.
You’ve split accountability for spend from accountability for usage
This is always going to cause you problems because if I’m not paying for it why would I worry how much it costs? Conversely, if I’m not using it why would I worry if it doesn’t work very well? I probably don’t need to say too much more about this because it’s pretty obvious, but if your technologies team or your finance team aren’t being goaled on the same thing as your business users, things can get pretty difficult for the business. Good, proactive TAM with shared objectives can help mitigate this.
You use bureaucracy as a gatekeeper
Big companies make it difficult for users to access the software they need. Now, the optimist in me tells me that this is because it is very important that lots of paperwork and authorisation proves that somebody needs the thing that they say they need for accounting or whatever. The truth is that often it’s simply a means of putting people off getting the software they need because it is such a longwinded process. This is a false economy as clunky processes require a lot of effort and labour from your tech team to push paper around to get it approved. This then ties them up and stops them investing time in being proactive and strategic about the kind of Assets they need for the future and how they should be managed to maximise value. An agile approach that is automated and simple to use won’t mean that everybody is taking out expensive software but will mean that your teams are treated like grown-ups and get a lot of time back and the assets they need to do their job more quickly.
If any of this has struck a chord with you, get in touch. I work with leaders in these predicaments all the time and would love to see how our approach could transform your business and start saving you some proper time and money.
