It’s a Jungle Out There – Software License Management: When to Start and What to Expect

By Bernhard Boehler

There are two reasons for why it’s so hard to constantly keep an accurate overview of licenses in an organization. The first reason has to do with the organization. If a company does not clearly define and document its procurement processes, the control over such a fluid, not physical asset like software is quickly lost. But the publishers also make it difficult. Too many different license and purchase models are available on the market. And only with very specialized expertise and tools can a company get a grip on the complexities.

When should you invest in software license management?

Truth be told: software license management does not come easy or free. So when should a company invest in it? Some say a company should start with the first computer. After all, there’s no such thing as a little bit compliant. So, from a legal perspective I agree: start with the first computer. But financially, I would say license management can give you a return on invest starting at about 800 clients.

In my experience though, the most important component is the process. In a small company the process documentation can probably fit on one sheet of paper. And for general license management purposes it’s enough to write down in which Excel file what information is collected (licenses owned, software installations, computers/users) and who is responsible for updating the files. For a small company that should be adequate and the biggest problem will be making sure the data is kept current.

In a larger company things get a bit complicated and recording data in Excel tables can get messy. With an average of 500 applications per PC, managing licenses by hand is no longer possible without sucking up huge amounts of time and leaving ample room for mistakes. And when you consider that system administrators place great importance on the availability of information on installed software, an investment in software license management is justifiable with significantly less than 800 clients.

So, when should a company invest in license management? Legally you should start license management with the first computer, financially with somewhere around 800 computers, and then again technically, somewhere in the middle.

Maybe a better way to answer this question is to consider the type of software used in the company. The more you invest in software, the more you should take care in managing it. As a rule of thumb, when you start planning a software budget, you should invest in license management.

How much can you expect to save?

When analysts talk about software asset management, they always list a high potential for savings, upwards to 30%, as a reason to invest. For a company starting from scratch with no software management tools whatsoever, this is probably realistic. But larger businesses, which already have one or more inventory tool in place, have probably already done their homework about standardization and by now are capitalizing on the more obvious cost reduction opportunities.

So a more realistic estimate of saving potential would be 10 to 15 percent. Most companies can reach these values by eliminating “everything-in-one-enterprise-package” contracts, rejecting standardized software requests (every employee should have Microsoft Office Professional), and making it protocol to check each request to see if it can’t already be met by the existing license inventory.

What obstacles can you expect?

Data quality is king in the land of license management. We have tackled data maturity problems to varying degrees in almost every software license management project we’ve done. No company is immune to them.

Some of the most common data problems have to do with sharing and completeness. Software license management often exposes certain organizational units, such as procurement and the IT department; to requiring information that is not immediately accessible to them (for example cost center information is missing in the IT master data). And often there is confusion as to who is responsible for CMDB data, which is needed to ensure compliance with certain business applications such as those from Oracle.

This is where communication is key to promote the joint understanding by business and IT staff of these information requirements and their provision and integration into your license management system.

There will be a lot of meetings held in the future. The people on your project team need to meet with the people who have technical knowledge about the software in your scope (e.g. SAP) to find out what data is required to manage the effected licenses. Each meeting should end with an understanding of what information is needed and who is going to obtain/supply it. The same goes for the CMDB. You need to determine permanent roles and define their responsibilities in terms of who must ensure which data is entered into the database.

Two other common and often tedious data problems are (1) collecting and identifying historical license data. Many, if not all, companies struggle with purchases made years before any software asset management policies were put in place. And (2) sifting through discovery data to find the required information for license management.

Both of these problems can be solved with technology, specifically with catalog-based tools. ISO 19770-2 is a solution to the discovery data problem. But until it’s fully implemented by software publishers, you’ll have to rely on other methods. The best method is to use a database (catalog) of recognition criteria that automatically maps the software nomenclature in the discovery data to the actual licensable product.

The method for identifying historical license records is similar. A repository of license data should be provided by your solution provider with the tool. We collect this data in our Master Catalog. The catalog automatically identifies and normalizes data from many-years-old purchases by identifying the product SKU, which often buried somewhere in the procurement data. Some providers even offer this as a service, so be sure to ask yours.

Each one of these obstacles takes time deal with, so the level of data maturity in your company should definitely be considered when you plan your license management project.

What you can look forward to:

500 business units and 10,000 cost centers spread across the globe and you have a high level overview of it all. You’re king of the jungle. At this point in the project you’re dealing with thousands if not millions of data sets from procurement, inventory and metering tools, and software requests.

The sheer volume of information in the compliance check can make it difficult to make targeted decisions. But you have the information and high data quality, so you dig deeper into the individual business units and cost centers and you focus on one publisher or even just a single product. If there’s an issue of under or over licensing you find out where it’s coming from so that you can correctly charge back costs and tackle the problem at its source. You’re averaging 10-15 percent savings annually and contributing to “running IT like a business.”

About the Author

Bernhard Boehler is the Managing Partner for Aspera Technologies, Inc.