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WHEN asked directly, most senior managers admit that there
is software waste within the company – but few are able to quantify the
problem.
Research has shown that between 20-40% of applications
installed by companies are not used. In the United States alone, they believe
that this accounts for $12.3bn in preventable and ongoing costs.
This easily happens when licences are allocated to users
based on their department (as opposed to their need), or if they are bundled by
the software vendor, or if software is bought for a specific role when an
employee first joins the company but the licences are never reclaimed or
redeployed when their role changes.
This carries enormous implications for businesses as there
are hidden costs in software that aren't yielding any business value.
In subsequent years, this attracts maintenance costs which are completely unwarranted – between 15-20% of the original licence fee on an annual basis.
Understanding what is out there and whether it is being used
is critically important.
We recently analysed a large company with over R16m tied
into licences that aren't being used – a significant ongoing and unnecessary
spend. Organisations are simply buying more software than they are using.
When Opinion Matters conducted a software efficiency survey
among companies in the United States and United Kingdom, they found some
insight as to why this is happening:
• 71% of companies surveyed felt that software asset management is overly complex;
• 52% of companies still use spreadsheets to record software licences, with 12% still using a paper-based filing system – and 12% using nothing whatsoever to keep track; and
• 77% of
organisations never reclaimed any unused software licences.
From a compliance perspective it is also critically
important to monitor what is being installed. When a software vendor audits a
company, it does not care whether you as the business owner are getting value
from the software, it cares whether it is installed or not.
If it is installed, the business has to pay – no questions
asked. A financial services company we've recently come across had a desktop
productivity application installed for 1 000 staff members' machines, which
only 55% of them were using.
By managing these licences effectively, you are minimising
both cost and reputational risk around a "bad audit".
Of course, not all software is being installed with the
consent of the IT department. "Rogue" software, such as games and
user productivity software, also represents a reputational and security risk to
companies if they are not managed and controlled correctly.
It's important that companies determine what they own, what
they are actually using, and what they really need.
Historically, companies have managed abuse through a
"desktop lockdown" approach. This meant that administrative rights
were not given to the end user and hence they could not abuse the corporate
asset, ie the PC.
At face value this seems fine but with the commoditisation
of IT and user self-service, this approach has become archaic.
We're seeing tools, like AppClarity from 1E, that allow
companies to rapidly get a view of all applications within an organisation,
financially quantifying the waste that is present, and providing the ability to
uninstall the unused software.
At the same time, user empowerment tools allow users to get
software rapidly redeployed when the need arises or even "rented" for
the time required. The reality is that it's time to start expecting more from
your IT department.
In short, savings accrue through averted future maintenance
as well as the potential to renegotiate enterprise licence agreements based on
usage/business value.
Companies need to optimise their use of applications to cut
costs and control the software that could be causing exposures in their
operations.
- Fin24
* Tim James is a guest columnist and MD of sustainableIT, a market leader in the fields of green ICT and sustainable computing. He will be writing a monthly column exclusively for Fin24.
