Software asset management: manage internally or outsource?

You’re ready for it: software asset management (SAM). You know who are your largest software vendors, you are aware of the risks and maybe even purchased a SAM tool. In short, the basis for your strategy is there, now it’s time for the execution: upload data in the tool, read contracts, the continuous collection of data. The big question is: are you going to do that all internally, as organization?

This question has a technical, a financial, and an HR component. Note that this is especially applicable to (medium to) large organizations. After all, they have complex IT landscapes and are frequently targeted by audits from software vendors. There are basically three options you can choose from: do everything internally, outsource all or a combination of both – also known as semi-outsourcing. I will give away an insight: the latter option is absolutely preferred.

Manage internally?

As organization, you can choose to build a complete software asset management team internally – there are large companies doing so. The advantage is that you have all the specialist knowledge, from contract details to user details. Your team can populate the SAM tool, keeps track of costs and even responds to potential financial risks. That sounds great, but is that the case?

Consider specific contract knowledge of a software vendor. That’s why you absolutely need to get real insight into your costs and your risks, but do you want to have that specific knowledge in-house? Suppose you train a young employee as IBM contract specialist. He knows all the details, all the fine print and other specific IBM business. And then what? What is the career path of this employee? His knowledge is so specialized, what will this person do next within your organization? And what do you do when he leaves: in one swoop, all expensive knowledge built up over years is gone.

Like tax, like SAM

I would not advise organizations to set up the entire software asset management approach internally. Compare it with tax specialists. There is no multinational that has all specialized tax knowledge, including all rules and regulations per country, in-house. You want to leave this to external specialists, who are constantly on top of it and keep track of developments for you. The same applies to having in-depth knowledge of the complex rules of certain software vendors.

Outsource all knowledge then? That again is just a step too far. You’ll miss control and it is more difficult to create internal support for the SAM strategy. An internal contact is therefore the least an organization should have, but preferably more than that. Again, the comparison with tax is back in place: you do not have all knowledge in-house on the tax rules in each country, but you want a financial specialist who has sense of tax and, if necessary, hires external expertise.

The ideal situation: semi-outsourcing

As with so many cases, the ideal situation is in between. Ideally, you have an internal SAM manager (or a small team) who understands software asset management, keeps track and monitors processes. This person is primarily business-oriented, he ensures that the right software is used and that costs are cross-charged correctly. He also supports the internal organization in negotiating with software vendors and with new software purchases, so they can be deployed in the company without any financial risk.

For specialized cases, the SAM manager hires external parties or he outsources specific parts to specialists. The above-mentioned contract knowledge by software vendor is an example of that. These external experts provide all the information required by the SAM manager: what is and what is not allowed with the software? Where are the risks? What software is not used? This allows the SAM manager to have the insight he needs to avoid unexpected back payments, but also to save costs or to spend budget elsewhere.

An additional advantage is that in this way you can offer employees a broader career path. For someone with a technical IT background that wishes to move more towards a management position or someone with a background in contracts that wants to know more of IT, it is instructive to be active in software asset management for several years. This employee will gain useful, relevant knowledge at the cutting edge of process management, IT and the fine print, and will then make a new transition within the organization. Not packed with highly specialized knowledge, but with a wide range of technical, financial and commercial skills that can help your business grow in other areas.

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This article was published on 06-03-2017