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Everything Changes, Everything Stays the Same

In June 2021, Deloitte published their IT Asset Management (ITAM) Global Survey 2021 in which they summarised their findings on the current state of ITAM; where businesses will be focusing efforts given the growth of cloud adoption seen in context of the COVID pandemic.

The Deloitte paper summarises 4 key findings :

  1. Current state of ITAM and associated risks
  2. Leadership and organisation
  3. The Future of ITAM
  4. Vendor Management and collaboration

This post considers these findings and offers my view on both the finding itself and the state of SAM/ITAM as I see it from our ongoing SAM and license optimisation conversations, projects, and managed services encompassing a wide range of businesses and vendors over the last 15 + years.

1. ‘Current state of ITAM and associated risks’

The survey refers to ‘… the increasing complexities of ITAM amid pressure to reduce costs.’ In my experience, this will depend on the customer and the sector they operate in. Nothing fundamental has changed with regards to there being a widespread of different types of customers who are at different stages of their SAM maturity journey.

Just because you have become more aware of a subject does not inherently mean it has become more complex

When considering cloud, if an organisation is mature from a SAM and ITAM perspective, there’s a very good chance that they will be advanced in their approach to managing cloud costs. ITAM has always been complex as opposed to it ‘increasing’ in complexity. Just because you have become more aware of a subject does not inherently mean it has become more complex. In the context of an ITAM landscape cloud is just another ‘thing’ to measure, monitor and assess as opposed to ‘increasing’ the complexity of ITAM.

Fundamentally, you will get organisations who are willing to listen and make the necessary mental, fiscal and resource investments in SAM/ITAM required to understand and resolve the problem that they’re facing. Conversely, there will still be many who will not, and they will continue to miss out on the benefits that ITAM can deliver suffering the financial consequences in the process.

2. ‘Leadership and organisation’

Anyone who has worked in this industry for a period of time will know it’s absolutely critical that SAM/ITAM teams receive high level support within their organisation and I wholeheartedly agree with the need for businesses to ‘… leverage board support and drive proactive engagement in alignment with key organisational stakeholders …’

However, this needs to come from the top down as opposed to SAM/ITAM managers trying to capture the attention of their senior executives. The way I see it is that if you are a board member or at a senior level and you’re responsible for compliance, risk, or financial management, then the need to be engaged with your SAM/ITAM teams is imperative. Your job may depend on it if you get landed with a large non-compliance.

The work that your SAM/ITAM teams are doing in terms of cost optimisation, waste reduction and avoiding unnecessary spend, in parallel with ongoing management of license compliance may seem to some as mundane or uninteresting, however the opportunity for cost optimisation in most organisations is massive. Exposure to license non-compliance can often result in considerable financial restoration for the vendor and potential reputational risk to the business if not managed appropriately.

To put it in simple day-to-day terms, checking the tread depth on your car tyres is boring and mundane until either you have a blowout at speed or the police give you a ticket for a poorly maintained vehicle. Both are unpleasant outcomes and could be avoided with “a little maintenance and validation”.

Elevating the business practice of SAM/ITAM to board level will allow any responsible business to keep their eye on both priorities and react appropriately if/when there are warning signs of a potential threat, or budget pressures. The executive sponsor can then quickly and easily deploy the necessary internal or external resources to mitigate or react to the scenario and hopefully avoid any nasty surprises. Additionally, if the board is reviewing/approving any spend for technology changes or M&A, the executive sponsor can communicate these changes to the necessary teams and start to prepare for any potential impacts proactively, as opposed to reacting to license non-compliance after the fact.

Executive sponsorship can also support the adherence to internal policies and apply the appropriate pressures where there is any deviation from that policy.

It’s important to consider SAM/ITAM from a cultural perspective. Business culture is generally driven from the top — if your executive sponsors understand the benefits of SAM/ITAM, then this behaviour will trickle down to their managers and teams to follow.

During my 15+ year tenure of working with a wide variety of organisations who have different levels of SAM/ITAM maturity, the most mature in terms of process have had executive sponsorship driving a culture of cost optimisation and compliance. We have worked with those organisations to create processes to manage cost and compliance, with strict adherence to this expected at board level. Where there has not been an appreciation of the value of SAM/ITAM at a board level, the maturity of those processes has been poor, resulting in low value for money and ROI in software procurement, and a higher-than-normal risk of license non-compliance.

SAM/ITAM teams and the work that they do is unappreciated in many businesses due to the perception that it’s unexciting and doesn’t really create any value. This is entirely wrong and senior executives within many businesses need to fully understand the opportunities of cost and risk avoidance that a best practice SAM/ITAM policy can deliver and how elevating the value of this work into the board room will reap further benefit and reduce business risk.

3. ‘The Future of ITAM’

The survey pointed to respondents needing to ‘… maintain an ongoing focus on automation supported by appropriate ITAM staff and leverage external assistance smartly to upgrade them to decision-making roles …’ Does this highlight a frustration with SAM/ITAM staff that they are under-appreciated and under-resourced?

This has a lot to do with business culture again. In my last point, I was referring to businesses taking a cultural approach to SAM/ITAM from the top down, where resources are given the funding and executive backing to create SAM/ITAM mechanisms and support internal policies.

Automation in SAM/ITAM can alleviate a great deal of the manual activities necessary to fulfil this task, freeing up the skilled resource to work on bigger and more high-profile projects. However, this needs to be part of an embedded SAM/ITAM process of education, communication, vendor on-boarding processes, policies, procedures, and methodologies. It’s also fair to say at this point, that the implementation of a single tool will not accomplish overall SAM/ITAM. With most businesses having numerous vendors, all with different license policies, compliance measurements and specific contractual nuances, one tool could never accurately deliver overall SAM/ITAM management.

We work with many businesses that recognise the need to employ external expertise in order to support complex contractual negotiations, help in the event of a vendor audit, advise and guide through technology transformation such as virtualisation or moving to the cloud, or provide fully outsourced SAM processes and methodologies to maintain compliance and optimise cost. With deep licensing expertise in specific enterprise vendors, license experts can often deliver improved commercial benefit and risk reduction as the depth of experience in these license arrangements and in the vendor’s methods are understood, anticipated, and managed daily.

4. ‘Vendor Management and collaboration’

The survey finds that there is an aspiration amongst the respondents to ‘… elevate their vendor relationships and collaboration levels in the spirit of a win-win relationship that goes beyond merely being able to negotiate contractual terms better.’

There are certainly some vendors that may respond positively to this ambition and engage in customer/vendor relationship management strategies for the greater good. They want the customer to be successful and for them to get the best value out of their software investment.

However there are some that will be less responsive. This is largely down to the culture of the vendor and how front-line sales staff are measured. This compensation culture can create a particular behaviour from the vendor that may be at odds with vendor relationship efforts from the customer.

a positive vendor relationship for the customer, relies heavily on the customer holding all the cards

Having dealt with a wide range of differing software vendors over the years, I’d say that a positive vendor relationship for the customer, relies heavily on the customer holding all the cards. Being in a position of power during vendor negotiations, where you are in control of deciding what you need and when, will play to your advantage. However, this necessitates a high level of management and control over your software asset estate, usage, deployment, and disposal.

  • There is a high degree of confidence in your compliance position and clarity on software license management, such that if you were approached for a vendor audit, you would be able to provide all the required information to the vendor with full confidence in the outcome.
  • You purchase software only when you need to and you can time your purchases with key sales deadlines such as quarter end, half year or full year end to benefit from better pricing.

If you do not have this level of control over your software assets, then your position is less certain. This could include the exposure of a previously unknown license issue that may not be uncovered until a vendor audit.

  • A cloud, transformation project or M&A activity can prompt a vendor audit. If you are not in control of your ‘as is’ estate before moving to your new technology platform, or indeed have a good idea of your ‘to be’ estate, a vendor audit would be very unwelcome at this point in time.
  • If a license exposure has been identified during an audit, and you now have an unexpected license purchase, there may well be very little desire on the side of the vendor to offer any sort of commercial incentives. Why would they? They are rightly looking for restoration of a license non-compliance issue.

Summary

There are few ground-breaking observations resulting from this survey. Not because there is anything wrong with the survey but because little has changed with the industry we work in. Depressingly, we still face the same problems we did 10 years ago.

  • A lack of maturity in an approach to SAM/ITAM is endemic across organisations. The few organisations who have made strides in this area are reaping the benefits of their investment whilst many many others simply waste their budgets to the benefits of the vendors.
  • Without the correct level of engaged executive sponsorship the SAM/ITAM role is a herculean demoralising task. Those who strive to implement processes and policies without the necessary sponsorship-teeth to back them up with sanctions will fail hopelessly on the altar of good-intentions.
  • Automation has its merits but is only one part of the story. There is a reason that the mantra in the industry is “people, process & tools”. All are equally important and anyone who tells you otherwise is probably trying to sell you something.
  • One cannot enjoy a positive relationship with a vendor whose business model is predicated on maximum profit and minimum customer focus. The only way to gain and maintain control here is to ensure you, the customer, holds all the cards.
  • From a SAM/ITAM perspective, cloud is nothing new, it is simply a configuration item (CI) which requires to be defined, monitored and actioned. Nothing else.

If you want to have a no-nonsense customer centric conversation about software licensing, SAM or ITAM get in touch we love what we do and we’re really good at it!

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Head of SAM Practice at Version 1. I used to be technical, now I spend my time navigating the backwaters of EULAs and vendor contracts..

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Jason Pepper

Jason Pepper

Head of SAM Practice at Version 1. I used to be technical, now I spend my time navigating the backwaters of EULAs and vendor contracts..

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