WHERE ARE YOU ON THE SOFTWARE ASSET MANAGEMENT CONTINUUM?

Empty or Full – When it comes to Software Asset Management (SAM), organizations find themselves somewhere between two extremes: doing next to nothing to manage their software license and maintenance expense, and aggressively managing the expense. During the current recession, many organizations have gotten serious about SAM because it can produce some immediate and substantial cost savings. Those who have done nothing historically are making their first foray into SAM, and those who have done some SAM historically are looking at doing more.

Options – Organizations have two basic options for SAM. They can either run a SAM program solely with internal resources, or they can hire a third-party SAM provider. Running a SAM program solely with internal resources is a challenge for most organizations, but hiring a SAM provider is not always the welcome alternative. CXOs fear that the SAM provider they hire will uncover substantial savings (the very goal of the engagement), which may lead some within the organization to believe, after the fact, that the CXO has been asleep at the wheel—that the CXO herself or himself should have produced the same savings, and long ago (an unintended consequence of the engagement). But this fear is largely unfounded.

WHY IS SAM DIFFICULT TO PULL OFF WITH IN-HOUSE RESOURCES ALONE?

Essence of SAM – The most effective SAM programs involve a multi- and inter-disciplinary approach requiring IT management, administrative, business lead, business process, accounting (including tax), and licensing (intellectual property) elements of expertise. For an optimal SAM program, an organization cannot bring to bear just one, presumed-dominant element of expertise or an incomplete set of elements.

Silos – Within most organizations, these requisite elements of SAM expertise are housed within separate silos. Sometimes a required element is missing entirely (e.g., the licensing expertise). Further, in most organizations folks tend to operate mainly within their respective silos, with little cross-disciplinary interaction. In fact, even when preferred or necessary, it is usually very difficult to get one silo to work effectively with another. Ninety percent of the time this is okay, but SAM is one example of the 10% of the time when it is not okay (not optimal).

Dynamic Process – An effective SAM process cannot be accomplished incrementally or in counterpart (e.g., Silo A does its piece and hands off to Silo B, and so on). The process is very much dynamic and interdependent, requiring interaction among otherwise disparate sources of organizational knowledge and expertise.

WHY ARE CXOs FEARFUL OF SAM PROVIDERS?

Misplaced Sense of Blame – Given the (accepted) status quo across corporate America—silos operating independently with little cross-talk—it would be a mistake to characterize a SAM exercise as “fixing a problem.” “Problem” suggests that fault or blame can be ascribed to someone, and this is what gives CXOs anxiety in the SAM context. It doesn’t matter whether a SAM provider is talking to a CFO or a CIO. Either might feel responsible for not finding the savings that the SAM provider found, and neither would want their CEO to form the impression after the fact that they have been asleep at the wheel. So, either might be reluctant to hire the SAM provider. Because of ostensible blame, any CXO might be reluctant to hire the SAM provider. The blame does not fall squarely on the CXO’s shoulders, but neither would the CXO be conclusively exonerated. In this netherworld of blame, the CXO’s default position is possible blame, and so the SAM provider does not get hired.

Fear Is Unfounded – Here is the critical distinction that CXOs should bear in mind when they are thinking about hiring a SAM provider. Because SAM is not the responsibility of any one silo (and should not be because no one silo could accomplish SAM by itself), the head of any one silo should not be put under an umbrella of suspicion after a SAM exercise is completed. SAM requires a multi-silo effort that is difficult to pull off in any organization, and it requires elements of expertise that might not exist within any silo. If anyone is “to blame” after an effective SAM exercise, it would be the heads of ALL silos for not working together in the past on SAM. But again, silos not working together is the accepted norm, so even blaming all silo heads is not very useful (beyond the slight emotional benefit it may give a CEO).

I realize that “should not” be put under an umbrella of suspicion is not the same as “will not” be put under an umbrella of suspicion. But bear with me here.

Test – To test my “blameless” hypothesis, think about this situation. If you were a large, software-intensive organization, and you wanted to hire a full-time SAM expert (assuming you could find a single individual with the requisite skills), where would you place that person within your organization? To whom would this person report? Accounting? IT? Purchasing? Administration? The head of the main revenue-generating business unit? The CEO? Settling upon the ultimate reporting structure would be difficult, and most organizations would probably opt for multiple reporting paths leading ultimately up to the CEO.

I think this example illustrates the multi- and inter-disciplinary nature of SAM, and by extension, the blamelessness of any single silo head for the historical lack of a meaningful SAM “facility” within an organization.

Test 2 – CapCo wanted to replace its 20 year-old, home-cooked HRIS. It needed only 6 PeopleSoft modules to replicate existing functionality, but it bought 6 extra modules at a steep discount (the decision of the VP of HR). Five years later, the extra six modules still have not been deployed, but CapCo has been paying maintenance and support for those licensed modules. Who’s to blame for this unnecessary spending? IT? VP of HR? Accounting? Purchasing?

I would say it’s hard to fairly blame anyone. The VP of HR may have made a good decision at the time. IT was too busy to get the other modules up and running, and HR never expressed a need. Purchasing kept paying the maintenance fees on the extra modules because the licensures were in effect (probably having no idea the modules were not being used).

GETTING PAST THE FEAR FACTOR

Your goal is to take advantage of a rare opportunity (you pay your SAM provider nothing unless it produces savings for you) and cover your butt at the same time (not getting blamed for not producing the same savings yourself).

Here’s how you achieve your goal. By the way, your SAM provider will be happy to work with you on these items.

1. Emphasize to your boss and constituents early and often that your provider offers a multi- and inter-disciplinary approach to SAM. Within any organization, Accounting couldn’t pull off an effective SAM exercise alone any more than IT could pull it off alone.
2. Assure your boss and constituents that, because it requires a multi- and inter-disciplinary effort, most organizations do not have an effective SAM program (silos, little cross-talk, missing expertise, etc.). “We’re not alone,” and without saying it directly, you imply that “You’re not to blame.” “We’re the norm and not the exception, and there are some valid reasons why the norm exists.”
3. Explain to your boss and constituents that your SAM provider will bring specialized expertise to the table (filling any gaps in the organization’s expertise), and it will serve as a cohesive force, bringing the organization’s disparate sources of knowledge and expertise together to get the job done. It will provide the (heretofore missing) catalyst that will join the Red Silo and the Green Silo at the hip, at least temporarily.
4. Emphasize to your boss and constituents that, at the end of the process, your SAM provider will recognize the contributions of your various silos. Without the silo dwellers, your SAM provider would not have been able to get the job done. And without your SAM provider, the silo dwellers would not have been able to get the job done. Everyone is a winner, and no one is to blame for not having achieved this success with internal resources alone.

Item 4 is a way to convert “should not be under an umbrella of suspicion” to “will not be under an umbrella of suspicion.” The chain reaction could not have occurred without the catalyst (your SAM provider). In other words, you want to give your boss and constituents the assurance at the outset that the process itself (in sort of a self-revealing way)—as well as the final report or executive summary—will make it abundantly clear to onlookers that the process simply would never have occurred within your organization in the normal course (at least not with the same level of success) because it is so far removed from the status quo. And no one is to blame for that.