It is proven fact! Properly managing your software assets definitely increases profitability. Software now accounts for over 40% of IT budgets, therefore, it is essential these costs are tightly controlled and every penny spent on software, should lead to a positive impact on the company’s economic growth.
Many organisations fail to implement the necessary procedures to manage the software life cycle because restrictions on time or resources. IT staff spend most of their time responding to change management requests or supporting the end user community. There is never enough time to complete these tasks, never mind performing the duties required to manage software assets.
IT management recognise they must make sure that all software deployed or used, is correctly licensed, however, this requirement is usually firmly at the bottom of their to-do list. Unfortunately, this deferment of duty leads to serious consequences, not only putting the company at risk, but more importantly, increasing cost of ownership.
Cost of ownership is not always seen as significant risk, most organisations fear the ‘knock at the door’ from a vendor, rather than worrying about how much money they have spent on software licenses. This misjudgement of priority leads to many organisations over buying or buying the wrong licenses which reduces profitability.
Continued failure to manage Software Assets can also lead to other major business risks, such as:
Increased Management Costs
Not having accurate and up to date software license information impacts decision making, with many management teams failing to respond quickly and efficiently to operational demands. This increases management costs and reduces employee productivity.
Increased Operational Disruptions
With vendors now seeking out organisations who do not manage their software assets effectively, it is highly likely that your company could be subject to significant operational disruptions as a result of an in-depth vendor audit. Failure to maintain your license entitlements and being unable to respond quickly and effectively to any regulatory or vendor request, will disrupt your core business activities.
Following a vendor’s audit, many organisations find that they are subject to significant un-budgeted expenditure that has a negative impact on profitability. Failure to implement effective SAM processes will continue to increase the risk of exposure, leading to further un-budgeted expenditure.
Poor Supplier/Vendor Relationships
Due to having limit controls of the company’s software assets, most organisations fear communicating with vendors and always feel on the back foot when negotiating new contracts or license renewals. Not having accurate and up to date software usage and license information leads to poor vendor relationships and is likely to increase expenditure.
By investing in Software Asset Management (SAM), you can exploit the operational benefits of having fully licensed and managed software. Implementing controls that reduce waste and maximise license consumption is guaranteed to increase enterprise productivity, whilst, in turn, capitalising on the financial gains derived from these efficiencies will allow you to further invest into technology to drive the company’s profitability.
Partnering with LMO will help kick start your SAM journey. With it’s uniquely flexible and experienced approach, the team implements the controls necessary to guarantee immediate return on investment. The cost of engagement and implementation will be minimal compared to the benefits achieved plus, the reduction in costs will increase profit.