Cracking the Code on Software License Management

Cracking the Code on Software License Management

Overview of IT Asset Management Integration Integration of the physical, financial, and contractual attributes of IT assets Enables the delivery of timely business knowledge to better manage and control the business and IT. HR Help Desk Discover Tools Accounting Systems Central Repository Software Asset Management plays a key role in effective IT Asset Management. 2

Why IT Asset Management? Unmanaged IT assets increase business risk potentially resulting in a direct, negative impact to an organization s bottom line: Risk Exposure Bottom Line Impact License Noncompliance Inaccurate hardware and software counts Inefficient use & lower productivity of skilled resources Overpaying for IT assets Unnecessary IT asset purchases and possible penalties and fines Higher cost of ownership not to mention other intangible costs such as: Public embarrassment Loss of potential customers Poor IT asset tracking results in lack of information for planning hardware and software upgrades." 3

Savings Potential Organizations achieve the greatest benefits by identifying where their true pain points reside and working to resolve those first Area of Benefit Savings Potential Uncovering Invoice Errors 1.5-8.5% Vendor Management 0.5-3.5% Sourcing Consolidation 2-8% Hardware Lease Management 5-20% Software License Management 10-50% Cost Avoidance 0.5-5% Productivity Savings 5-10% Retirement 1-3% Business Decision Support Up to 5% Total Potential 2.5-5% Savings % Based on Industry/Client Experienced Results 4

The ITAM Lifecycle Plan Request Order Receive Pay Deploy Bill/ Chargeback Manage Retire Planning Capacity Planning Capital Planning Expense Planning Budgeting Refresh Planning New software purchases/upgrades Request User Request (includes approval process) RFI/RFQ/RFP Contract Negotiation ITAM Process and Sub-Process Areas Procurement Ordering Receiving Payment Deployment Request Fulfillment Hardware Refresh Enterprise SW Upgrades Chargebacks Internal/External Billing Management Contract Administration Installs, Moves, Adds, Changes (imac) Break/Fix Software License True-Up/Down Software License Compliance Management Software Removals Retirement Employee Off-boarding Software License Recapture Hardware Disposal Software License Retirement Key Facets of an ITAM Function Policies/Regulations ITAM Policies Regulations IT Contract Management Contract review/renegotiation frequency Bulk purchasing/discounts Vendor selection Metrics Key Performance Indicators (KPIs) Critical Success Factors (CSFs) SLAs Reports ITAM reporting and frequency Report content and receivers People ITAM Roles and Responsibilities Technology IT Asset Repository IT asset record creation IT asset record modification IT asset record retirement Integrations/Interfaces (ERP, contract management system, CMDB, Service Desk, etc.) Discovery Technology Discovery footprint Reconciliations to IT Asset Repository 5

The Software Asset Management Lifecycle Plan Request Order Receive Pay Deploy Bill/ Chargeback Manage Retire Planning Capacity Planning Capital Planning Expense Planning Budgeting Refresh Planning New software purchases/upgrades Request User Request (includes approval process) RFI/RFQ/RFP Contract Negotiation ITAM Process and Sub-Process Areas Procurement Ordering Receiving Payment Deployment Request Fulfillment Hardware Refresh Enterprise SW Upgrades Chargebacks Internal/External Billing Management Contract Administration Installs, Moves, Adds, Changes (imac) Break/Fix Software License True-Up/Down Software License Compliance Management Software Removals Retirement Employee Off-boarding Software License Recapture Hardware Disposal Software License Retirement Key Facets of an ITAM Function Policies/Regulations ITAM Policies Regulations IT Contract Management Contract review/renegotiation frequency Bulk purchasing/discounts Vendor selection Metrics Key Performance Indicators (KPIs) Critical Success Factors (CSFs) SLAs Reports ITAM reporting and frequency Report content and receivers People ITAM Roles and Responsibilities Technology IT Asset Repository IT asset record creation IT asset record modification IT asset record retirement Integrations/Interfaces (ERP, contract management system, CMDB, Service Desk, etc.) Discovery Technology Discovery footprint Reconciliations to IT Asset Repository 6

Process First Focus on stopping the bleeding first before cleaning up the blood on the floor Plan Request Order Receive Pay Deploy Bill/ Chargeback Manage Retire Check license inventory Only if we need to purchase new licenses License recovery and tracking Track license inventory levels Pull from inventory rather than buy Recover licenses during hardware retirement How can we ensure we remain license compliant? 7

Software License Compliance Proactively managing software licenses and their use by tracking and reconciling: Purchase information Contract information Volume discounts Premier support Extended warranties Entitlement information One time and reoccurring costs Discovery / usage information The focus is not only on mitigating license compliance risks but reducing lifecycle costs 8

The Three Legged SAM Stool Purchased Software Licenses Software License Usage Terms & Conditions / Usage Rules 9

Software License Compliance Software License Compliance Gain Anywhere from 10 50% Savings from Software License Management Discovered Compliance Report Software Purchased Software Used Software Usage Rules / Ts&Cs Usage Rules Licensed Reconcile Ensure reconciliations are occurring on a regular basis! 10

Collecting The Right Information Software Purchase Records The right information is needed before an internal software reconciliation can be conducted. Licensed ERPs Procurement Systems Vendor Websites Vendor Reports 11

Collecting The Right Information Software Installations The right information is needed before an internal software reconciliation can be conducted. Discovered Discovery Tools Monitoring Tools Client Management Systems 12

Collecting The Right Information Software Usage Rules The right information is needed before an internal software reconciliation can be conducted. Usage Rules Software Licensing Models Contract Terms & Conditions Vendor Websites Software Documentation 13

Common Software Licensing Models Time Based Perpetual Owned forever Annual maintenance fees usually apply (for upgrades, patches, etc.) Term / Leased / Subscription Term based / subscription based Annual maintenance fees usually included in subscription fee Restricted Restricted Licenses Environment restrictions (Development, Test, Production, Training, etc) Embedded applications Number of CPUs, sockets, cores, etc. Unrestricted Licenses No environmental or other restrictions Location Based Site / Location Unlimited number of installs at a specific location User Based Named User License assigned to a specific user / individual Concurrent Limited pool of licenses exist and only a specific number of people can use the software at any one time Software installed on a server where multiple people can access the application Device Based Single Device / Single Install Single license for one machine Software is installed on individual / identifiable machines 14

SAM Benefits Seen Elsewhere IT Asset Management provides supporting information to processes throughout the ITIL lifecycle Provides supporting information for incident and problem resolution Enables relationship creation between tickets and software assets Supports change and release management planning Supports availability and capacity planning Provides a basis for software CIs within the CMDB Supports KPIs / metrics reporting and management dashboards Supports software and hardware annual planning Assists BCM / DR in planning efforts 15

Challenges and Value Delivered Intangible Challenges Value Automation of True-Up Different licensing models by vendor Licenses are typically negotiated different terms and conditions for each contract/vendor Mergers and acquisitions Rogue and poorly managed purchasing Illegal sharing Internet downloading License Retirement and Re-Use Upgrade Entitlements Maintenance by Usage Identification of Redundancies Easier Invoice Reconciliation Easier Demand Management Publisher audits (BSA / The Software Alliance) ISO 19770 single guideline 16

Need Indicators Software Compliance Risk Do I own enough licenses to ensure compliance? Do I understand 3 rd party requirements in case I m faced with an audit? Am I utilizing my licenses efficiently? Are applications installed that make my organization vulnerable? A New Jersey based provider of home oxygen therapy and clinical respiratory care, had to pay $150,000 to settle claims that it had unlicensed copies of Microsoft Corp., Symantec Corp. and McAfee Inc. software installed on office computers. Financial Risk/ Portfolio Management Am I overspending? Are my assets being under-utilized? Are my invoices accurate? Do I understand my baseline well enough to support my Business Continuity Plan or make business critical decisions? Legal Implications Does my disposal process adhere to environmental regulations? Do I adhere to local accounting and tax regulations? A regional insurance provider realized that there was little accountability for laptops and desktops which was resulting in the loss and theft of corporate equipment. The organization was able to gain oversight of their asset purchases and inventory by implementing a central asset repository and standardized ITAM processes which greatly reduced replacement expenses. A Texas based telecommunications equipment services company, could have saved $295,000 in noncompliance fees if proper software asset management practices were in place. 17

Common Misconceptions Asset Management is a Standalone Function and is just about managing assets Once I ve finished implementing ITAM, all of my asset management problems will be solved Asset Management is easy if I have the right tools Asset Management will allow me to achieve cost savings day one Implementing Asset Management means I need to reduce my staff I don t need a physical inventory I only need to market and sell IT Asset Management during the project 18

Protiviti s Approach Protiviti offers a complete spectrum of services to assist you in developing your IT asset management program. These programs are typically delivered using a multi-phase approach and our teams can provide a mix of services tailored specifically to your needs. ITAM Business Case Assistance provides an understanding of how ITAM can be maximized to produce tangible results. Protiviti s consultants define your potential savings, the investment requirements for an enterprise ITAM program, and your return-on-investment (ROI) potential. ITAM Strategy and Roadmap Development helps you define and articulate the value and strategy for your ITAM program. We establish a shared vision for IT asset management from the executive level down. The result is a roadmap that provides a well-defined strategy and clear path forward based on Protiviti best practices. Maturity Assessment evaluates the effectiveness of your current infrastructure and resources against Protiviti best practices to identify opportunities to reduce costs and improve utilization of assets. ITAM Process and Procedure Design enables the development and validation of your ITAM processes and procedures (financial, contractual and physical). The result is a process-centric program ensuring that your IT assets are managed most efficiently and effectively from requisitioning through retirement. ITAM Architecture Design enables the development of both the logical and physical architecture required to support an ITAM program. The result is an architecture that integrates your environment with your business and operational systems to best manage the life cycle of your assets while gaining maximum efficiency. ITAM Organization and Transformation provides the guidance for establishing the organizational structure, skills, measurements and metrics for a successful ITAM program, including the communication and transformation activities necessary to accomplish the evolution from your current processes and environment. 19

Protiviti s Software License Compliance Assessments Our team will collect installation data for all software installed on workstations and servers. The installation data coupled with terms and conditions and purchase data will then be analyzed for risks in software non-compliance. Phased Approach Phase I: Information Gathering Collection of Current Environment and Documentation Understanding of Licensing Rights and Liabilities Discover Total Install Base of Licensed Products Develop Gap, Usage, and Reconciliation Models for Measurement of Compliance and Risk Phase II: Reconciliation & Analysis Reconciliation of Data: Licensing Models Software Installations and Allocations Reconciliation Reporting Finalize Reporting Findings and Document Results Phase III: Assessment & Recommendations Analysis of Processes for Management of Software Identify Recommendations and Gaps for Software Develop Final Briefing and Results Deliver Final Reports and Work Products Information Gathering Reconciliation & Analysis Recommendations for Future State Review & Recommend from Different Perspectives Data Completeness and Availability Process Completeness Technology Enablement Organizational Accountability 20

Our ITAM Market Differentiators Business View of IT Asset Management Governance Organization/People Process/Policy Technology Focus on efficiency, savings/cost avoidance, compliance, risk Uniquely positioned Smaller and more flexible Backed by RHI - resources available on demand globally Extensive experience and strong alliances with leading technology providers, not a reseller Best Practices Significant domain expertise in incorporating best practices, metrics, processes, policies, and implementation approaches Deep understanding and methodologies for automating the asset management life-cycle through existing solutions (Ariba, SAP, PeopleSoft, CA, HP/Peregrine, BMC/Remedy, etc.) Proven practices to transform the organization Experience Highly capable and experienced personnel industry, functional and technology skills Significant experience in providing ITAM services to large organizations Our methods are based on recognized leading practices: COBIT Control Objectives for Information & related Technology Capability Maturity Model Information Technology Infrastructure Library ISO 9000 & 20000 21

Contact Information Jason Riddle 412.402.1721 jason.d.riddle@protiviti.com 22