With mounting pressure to pare IT budgets, CIOs are constantly on the lookout to find ways to reduce waste in their capital expenditures. One area that's ripe for pruning is IT's garden of assets, especially its software.
Wringing waste from software assets can be challenging, because they are less tangible than hardware assets. And with software procurement and installation moving from physical CDs to cloud-based virtual sources, it is becoming more challenging from a tracking perspective.
Meanwhile, the complexity of the IT environment has increased exponentially in the last five to eight years, with the dawn of the digital era. The Internet of Things, mobility, digital media, and analytics have proliferated, and mobile phones, tablets, and other channels have been added to the mix.
What's more, software asset discovery is becoming more complex than ever. Discovery tools can produce "noisy" results by identifying all software installed on all hardware, which can include redundant programs, instead of limiting their search to relevant software. That can add to IT costs, because that information then has to be scrutinized manually, which eats up labor hours that could be better spent on value-added tasks.
Software flux also adds to the asset management problem. Software gets updated, for example, and software licenses change; this calls for a better asset management system. Also, an organization has to keep tabs on the utilization of and licenses for software-as-a-service (SaaS) programs.
So even when your organization thinks it has a clear picture of its compliance status, chances are the status has already changed, making that status picture inaccurate.
And speaking of changes, the terminology has shifted, too, from "IT asset management" to "software asset management" and now to "digital asset management" (DAM).
Here's why it's time to get savvy with your IT asset management.
The price of poor asset management
Incomplete asset management can cost an organization dearly. Some software makers charge a premium fee for supporting older versions of their software. In that case, an organization will pay for failing to upgrade, especially with longer wait cycles for upgrades. That problem could be addressed, however, with a tool that is intelligent enough to flag those situations so they can be remedied.
Orphan programs are yet another drain on IT budgets. All too often, nobody knows why a particular package was purchased way back when, or it was bought by someone who left the organization and the value walked out the door with the employee, although the organization is continuing to pay licensing fees.
Cloud assets need to be monitored for utilization, too. If an organization is buying cloud capacity and not fully utilizing that capacity, that needs to be known so that appropriate capacity is subscribed for. The cloud service provider may tack on an extra charge for dialing back capacity, but that cost will be worthwhile in the long run. That kind of asset assessment amounts to effective, timely, and intelligent stewardship of IT investments.
Without an intelligent asset management (IAM) platform, an organization can incur higher costs, which then contribute to the organization's technical debt. But if an organization can reduce technical debt, it can turn operational expenditures into capital investments, and then plow those dollars into new initiatives. That's important because CIOs are under continuous pressure to find "hidden" dollars in their budgets.
Why you need IAM
Although IAM solutions can address a host of problems, their use remains a low priority for most organizations. For example, an IDG Research survey of senior IT leaders conducted last year for Deloitte found that 72% of organizations lacked a solid software asset management strategy, 74% hadn't created a formal SAM function, and 83% did not view SAM as strategic.
IAM can manage and optimize the purchase, deployment, maintenance, utilization, and disposal of software within your organization. With the addition of intelligence powered by analytics, these systems can create a single-pane view of all assets managed by IT, providing a framework for asset governance.
Many organizations realize they don't have the level of governance they need to optimize cost savings from the management of their assets. An IAM system can do that for an organization. In fact, governance is critical for such a system to be effective. It also needs to be continually nurtured and cared for so that it's delivering continuous compliance information against a baseline governance plan.
With automation in place, an asset manager should be able to further know what's changed on the system automatically, what's no longer accessible, and what's been made accessible to individual users. Anything on which money is spent must be brought under an IT management policy that, when combined with intelligence, will allow patterns to be identified and converted into decision-making points that will allow intelligent asset management.
The idea is to help control software spending. Inventories can also contribute to an in-depth analysis of software assets by decoding license entitlements and automating the collection of consumption data.
An entitlement is a right to use, access, or consume an application or resource, typically for a fee. For example, a customer might purchase an entitlement to use an application in perpetuity (a "perpetual" license), or it might purchase a time-limited right to use an application (such as a one-year subscription license).
In addition, inventories can optimize software value delivery and information sharing, as well as establish an effective license position (ELP). An ELP involves taking a full inventory of all your software assets and comparing your entitlements to the software actually in use.
IAM's benefits
IAM can help organizations engaged in digital transformation by allowing them to:
- Avoid compliance penalties. Software companies can be ruthless toward IT organizations that violate license requirements, regardless of how inadvertent those violations may be. Penalties typically include the forced purchase of a new license at full list price or 125% of list, and reimbursement for the software maker's audit costs
- Standardize information. Good asset control techniques create standards for onboarding, periodic reporting of IT inventory, and interoperability of software management data.
- Tighten security. An intelligent DAM system can find partially disbanded assets that find their way into an organization and disable them before they pose a threat to security. (Partially disbanded means the asset is used only rarely.) In addition, when an organization comes under a cyber attack, it needs to know what assets are under attack, how those assets are protected, and what data is linked to those assets. If an organization doesn't have that information because of poor asset management practices or inaccurate data, it could be in deep trouble.
- Limit risk. Tagging data allows it to be categorized, to reduce the risk of losing sensitive information.
- Track sensitive data. By continuous tracking and monitoring of assets containing sensitive information, a DAM system can contribute to averting data compromise.
Don't waste your assets
The benefits of IAM are beginning to catch the attention of many organizations. By leveraging intelligence provided by cognitive techniques and software, assets can be used more effectively and efficiently, and IAM can become an essential companion to help an organization get to its next digital destination.
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