The CFO is keen to contain costs but perhaps isn’t aware that one way of doing it is through software licence optimisation. We look at ways that the CFO can trim the fat without cutting important IT services
CFOs will probably tell you that IT spends too much. So, naturally they will be interested in any activity that has a financial impact. Software asset management (SAM) can influence financial issues such as ROI for IT and business projects, managing costs through more efficient software asset usage, and understanding the value of those assets as part of the company’s value.
A wise CFO understands that software asset management feeds into the financial lifecycle of the organisation. And this ranges from procurement strategy right through to retirement of assets.
Getting the right data in front of the CFO
Having a good relationship with the CFO is all about making sure they see a financial benefit to what you do. Both software asset management and software licence optimisation (SLO) can help get the CFO on your side.
So what information can you provide to spark the CFO’s interest?
Software asset management goes hand-in-hand with configuration management and, in turn, supports business continuity. Software asset management can impact on the reduction of downtime and improved availability of systems.
It will also provide evidence for software vendor audits, such as what is already owned, what’s in use and what is actually needed.
It also informs on hardware disposal. This helps in reducing corporate liability and ensures laws are followed. If a strategy is in place to make a return on disposals, this value can also be reported.
Lastly, SAM data on asset utilisation can be interpreted and acted on. This will tell the CFO which users have more than one asset, policies on mobile devices and results from software asset amnesties.
Using SAM and software licence optimisation to identify risk
Producing savings may get you a pat on the back from the CFO, but long-term SAM and software licence optimisation can identify risks and protect the business from financial shocks.
While SAM collects accurate data on inventory and software license entitlement data (which is then matched to inventory to determine a license compliant snapshot), Software license optimisation goes further.
The initial compliance is then used as a baseline with tools and processes in place to keep inventory and purchase data up-to-date continuously, enabling continuous license compliance.
The CFO can then optimise software spending by taking advantage of what has been negotiated in licensing agreements and Product Use rights to make sure that you only buy the licences you need for the software you actually use. (Just because software is installed on a system doesn’t mean it needs a license, this depends on a particular piece of software’s license entitlements).
Business intelligence (BI) can be used to predict software needs in the future. This will be based on past trends and help in license negotiations with suppliers.
The CFO needs to understand that both software asset management and software license optimisation will act in tandem as a risk mitigation strategy. Using software license optimisation will also reduce the unexpected shocks to an IT budget when utilised. With SAM in place, there will always be data on what is being used; it will let you and the CFO know what you are dealing with. Not having this means you don’t know what is around the corner.
By using software license optimisation, a CFO can be confident that his or her firm’s strategic software assets are managed efficiently and cost-effectively.