Prologue: Assets that are disregarded (as such)
Please read the following statements below and answer; Yes or No as you see fit, please remember your answers for later.
All the Corporate Assets in your business managed by named and framed (accountable) resources only, expensive and cheap alike? Yes / No
Are informed business decisions stopping your Corporate Assets from rusting/rotting/fester/fade or just die (taken out of commission)? Yes / No
Are all Corporate Assets that may harm, hurt, disrepute, add unplanned cost or disrupt your core business value stream are managed in direct adherence to your strategy? Yes / No
Are all your Corporate assets are carefully budgeted for, throughout their lifecycle, and the cost is kept up to date, in a central location, easily accessible? Yes / No
(If you have more Yes’s than No’s that’s a great start, All Yes’s: well done, read on basking in your own organisation’s glory! With No’s equal or in majority, welcome to the norm!)
Now imagine that we’ve been talking, all along, about Software!
Do the same assumptions and statements apply?
– Of course not! I hear you yell back! Well don’t shoot the messenger…..until he is finished!
Why is that? Can we change it? When can we do that?
I’ll attempt to answer these three questions below and hope that by the end it will make sense and potentially impact your thinking?
Why is Software not seen as a real asset?
- No physical representation or manifestation
- Cost quantified in various unclear ways that may not be visible of experienced
- Little or no consequence for over/under/abuse of the privilege of having access to it
- Hard to track compliance, with obscure rules for use that differ dramatically between vendors
These four factors combined with a long history of thinking and speaking of software assets in a manner as something that only impact others, and only can be understood by professors. Too long have these made the view of assets muddy for us mere mortals. As I have seen many examples of doing this well in various organisations across the globe, mean that there is a way. Invariably that starts with someone with gravitas making it a key concern to all parties that matter, to actually view Software as an entity that could either grow our empire or topple it. One simple trick is to always have a cost visible for an asset, even if there is no cross charge or actual business need to do so. Everyone should know that software costs a lot of money and should be managed accordingly.
Another trick is to measure how many applications you have installed in your environment and divide that by number of employees (including consultants). So, say you have 5000 software applications present in your environment (Yes, I do count versions, why organisation should have 10 different versions of the same software is lost on me) and you have 5000 employees. Ask yourself this: Is it reasonable that every employee has a unique application for work at least mathematically, and if so, at the interview stage, is the killer question going to be: Which application and specific version will you be bringing to the company if you join us?
Again, of course not, but this is scarily often close to real life numbers. What is a good ratio you may ask? That is another article I am working on for another time, but I submit this to you:
Do you know which applications are of use to your business AND which ones are used by your business? If so remove all the noise, the annoying ‘crickets’ that only increase risk, cost and overheads. Those that remain, get a corporate policy in place for adding & removing software based on real use and usefulness. Act on it over time. Do it like your business depended on it – it well may do…
What would it take before we start looking at software as a real asset?
A big financial hit, usually by an audit, change of technology/vendor or smart M&A planning to shed or acquire a less controlled environment. Sadly, this is reactive, expensive and will never make anyone feel good about managing software. Worse is the missed the opportunity for a fact based and positive C-level meeting who you can pitch:
‘Want to save 20% on the annual software cost, without firing anyone?’ (CFO/CIO)
‘How about limiting our software risk exposure by 50%’ (Head of Risk or Compliance)
‘Please use our measured data for planning & budgeting software purchases & renewals’ (CIO etc)
‘For your strategic decisions, here are the critical applications and usage, with alternatives’ (CIO)
‘Would you like to reduce the number of support calls & costs because of standardisation’(CFO/CIO)
Asset managers are fighting tooth and nail for seconds of air time at C level, but hang in there, once you deliver the goodies, they will give you more space. Make sure you speak their lingua, and that is not how many core licenses you need if you want unlimited virtualisation. It is the cost and impact of not having those they care about. Business do not care for reams of complex data, nay they prefer messages short, snappy and beyond all: correct and in the right time!
When can we see software as a real business critical asset?
Hopefully soon, as the costs are still soaring, there are frequent changes in licensing and even though a lot moves towards the cloud, recent legislation regarding data, frequent hacks & attacks also force organisations to move critical software in house again. So, in my humble opinion, the death of asset management (due to the cloud) is a bit premature and even if that moment arrives there is still work to be done to control the spend & use thereof. Especially as long as we do not start to talk about and treat software assets like a Tag-Heuer, a Network switch, an Aeroplane, a travel booking, a service or any other costly asset that are critical to your business!
The absurdity of the skewed view of software as a non-asset is abundantly clear if you take one of the physical items in the last sentence and apply the first 4 statements to. I am betting there is a chuckle and a smile, as you would not have any those to the ratio of one per employee!