Week two of Christmas in July 2020 has begun! Without further ado…
Back in January, we all had grand aspirations for the year ahead. Now, many organizations are just looking to stay afloat. Even during a ‘normal’ year, business challenges arise, but it feels like except for a few select industries (hello, grocery stores), 2020 has been a year where nothing is where it’s supposed to be: people are at home trying to work while watching their young ones or caring for family members; and rather than stacked in neat rows and desks, your organization’s computers are sitting on random kitchen counters across the nation.
But despite all of the complexities of this entanglement (that’s personally how I’m referring to 2020), it’s important that organizations keep their eyes straight ahead to focus on utilizing the tools available to them in order to keep costs down.
This year has forced all organizations to look for cost reductions and cost savings on a scale few would have imagined at the start of 2020. Of course, some industries have had critical decisions made for them; Airlines and cruise ship companies have been forced to ground most of their operations, with no choice but to furlough workers. With the majority of their planned business for this year on hold, they’re now in ‘keep-the-lights-on’ mode.
But at the other end of the spectrum, grocery stores, pharmacies, and eCommerce are seeing their revenues jump as consumers find new ways to meet their needs and extra wants during the pandemic. For these organizations, cost-cutting and keeping up with demand are now conflicting priorities to manage.
The good news? Despite the disruption of the economy playing out faster and on a broader scale than previous downturns we’ve experienced, unimaginable does not mean unmanageable. Every role in your organization can tackle cost-cutting and cost-saving to safeguard your company from the collapse in oil prices, reduction in market capitalization, and the rapidly spreading health threats against your employees.
Across all of this, we’ve boiled down three statements to inform your savings framework, no matter where you choose to start managing savings in your organization:
- Identify clear cost drivers based on data, not intuition.
- Focus on strategies that have the best chances of being adopted by the business.
- Set clear ownership and accountability for cost management across the organization.
Today we’re covering the cost-cutting (and saving) opportunities as it pertains to Software Asset Management. Read below for an examination of savings in SAM or download our complete Asset eBook here.
Why start with Asset? While there are many benefits to ITAM and SAM from a business standpoint, they can be summarized in two words: visibility and optimization. Asset processes provide the visibility needed to identify and then manage and control the long and growing list of IT assets that an organization might possess.
Reimagining Software Asset Management
Organizations spend a huge amount of money on enterprise software. How much? According to Gartner, global enterprise software spend was $381 billion in 2018, and that number is growing at 8.6% annually. The opportunity to optimize this spend is enormous.
And yet, Software Asset Management (SAM) practitioners still wrestle with time-consuming and inaccurate manual processes hosted in spreadsheets or legacy SAM tools. Optimization is almost a pipe dream – consigned to the back burner due to lack of visibility, time restraints, and constant fire drills. To put it simply, it’s tough to drive strategic SAM initiatives when you’re scrambling to respond to software vendor audits.
By eliminating waste and redistributing software budgets to support strategic business initiatives, you and IT can accelerate the company’s digitalization agenda, contributing directly to bottom-line revenues and growth. However, the majority of organizations struggle to manage their software assets.
Fortunately, next-generation IT asset management solutions are starting to replace traditional SAM tools. It’s time to start creating your Software Asset strategy.
- Manage software where you manage the rest of your assets and IT.
If you already have a single system of action in IT, then your choice of a SAM vendor is obvious – add SAM to your existing platform. If you don’t have a single system of action, choose a SAM vendor that offers one. Look for a solution that offers comprehensive discovery capabilities, a robust catalog for normalizing software inventory, automated reclamation and redistribution of licenses, and flexible reporting on software usage, costs, and compliance trends.
- Identify your stakeholders and work with them to identify business needs.
Your SAM strategy should start by identifying what you want to accomplish. Obviously, you have your own internal goals, such as reducing the effort needed for vendor audits. But to create broader value, you need to work with other stakeholders to establish clear business goals. For example, these might include statements such as, “we don’t want to be surprised by shadow IT expenses or applications that are flying under the radar”, or, “we have to optimize our software spend so we invest in applications we actually use and need.”
- Establish clear outcomes that align with these business needs.
Translate each of your goals into one or more measurable outcomes. This focuses your efforts on specific activities and allows you to measure and communicate your success. For instance, if your goal is to pinpoint applications that are no longer business-critical, then the corresponding objective could be to reduce software spend by 15% by eliminating applications that are redundant or infrequently used.
- Don’t try to accomplish everything at once.
Crawl. Start small with one specific initiative, such as tracking a single software vendor. Show your success – for example, by passing the vendor audit with minimal compliance issues, and compile data to support this.
Walk. Focus on the fundamentals that will allow you to broaden your next-generation SAM program. This includes centralizing data into your CMDB, ensuring that your data is trustworthy, and implementing repeatable, best-practice SAM processes.
Run. Continue to mature your SAM practices, increase process automation to improve efficiency, and feed software information into other IT areas to create additional business value.
- Revisit your SAM strategy regularly.
Your business doesn’t stand still, and neither should your SAM strategy. To maintain business alignment, revisit your goals regularly by meeting with stakeholders. Also, continuously compare your performance with your target outcomes, making course corrections where necessary to get back on track.
When it comes to actually getting started with your SAM goals, it helps to have a specific event that can catalyze your SAM program. This could be anything from new software cost-cutting initiatives, or upcoming enterprise license agreements (ELAs) or maintenance renewals, to data center expansions, or even cybersecurity initiatives.
By combining ServiceNow’s capabilities with a concerted effort and methodical approach (that encompasses organization effort, shared goals, and technology) businesses will have a persuasive foundation for cost savings and performance-based funding, as well as streamlined IT processes and automated workflows.
Among the many lessons of the COVID-19 situation and the associated economic fallout, this one is among the most revealing: cost discipline can no longer be considered optional. Through crisis after crisis, organizations embrace cost discipline when business conditions become difficult, only to let it take a back seat as the economy recovers and growth becomes the prime objective. But as we’ve seen this year, those who allow discipline to lapse are at the greatest disadvantage when conditions once again turn tough.
Simply put, cost discipline must become a component of the organization’s DNA, a regular discussion point with every business leader whose decisions impact spend. Just as importantly, decisions about spending must be grounded in hard data and data analytics, not intuition or aspiration.