Thinking of the procurement team as solely responsible for buying things is a commonly-made mistake.
Placing orders and negotiating discounts are only part of their purpose. Other functions include reducing the number of contracted suppliers to make savings and eliminate unnecessary costs, developing improved supplier responsiveness and performance and managing maintenance contracts. Having a centralized, highly effective procurement team reduces cost, and enables buying power. However, there is one area where the majority of procurement functions are still lacking, and that’s software.
Put simply, they all-too-often just do what they’re told. It’s a somewhat controversial statement, I agree. And it’s not really the fault of the procurement team. But it does introduce unnecessary cost and risk into the organization. To help explain my point, let’s take an example; 10 new people are starting in organization. As part of the on-boarding process we order 10 licenses of some default software, this could be subscription or perpetual (think Salesforce or Microsoft Project).
When this request reaches procurement, they order the licenses. This ensures good pricing, contractual arrangements are followed and the correct cost centres are charged. The procurement team has met its obligation and followed the approved processes. But have you spotted the flaw in the workflow? The question we’ve forgotten to ask is “did we actually need 10 new licenses?”.
Where are the decisions made?
Requests for software should have a process associated with them. Unfortunately, as most requests go through a service desk, not all of them are followed and it’s uncommon for a service team to know the processes for all software. Essentially, the provision of software to employees (who gets what) should be a business decision.
As such, while it makes sense for every computer user to receive a basic ‘starter’ pack with applications that everyone would be expected to use, beyond that there should be a workflow that enables individual employees to request software and have that approved by a business line manager. The workflow appear sound. However, there’s an important step missing: Software Asset Management (SAM).
That means ensuring that the organization is optimizing the availability and cost of all existing software entitlements before committing to buy any additional licenses.
Historically seen as something of a silo function primarily concerned with monitoring and managing compliance, the SAM solution can now play an important role in helping all stakeholders in the procurement cycle – not least the procurement team itself – ensure that all software purchases are not only approved, but also necessary. One way to create an effective software lifecycle is to deploy a user-facing Software Store – essentially a software catalog that is closely linked to, and controlled by, the SAM platform.
A Software Store ensures that requests for software have a defined workflow behind them. Workflow processes ensure compliance and consistence within the organization, they handle authorization of requests and gather information; they can even create, edit and close service desk tickets. And crucially, to our example above, it can automatically check whether licenses are (or can be made) available to avoid the need to purchase new software.
Providing the current Effective License Position (ELP) together with pending requests inside the workflow allows business, SAM and procurement managers to see whether they really need to procure new licenses.
With the Software Store connected to the SAM platform, every stakeholder in the software procurement process wins: users get self-service satisfaction, managers can quickly approve processes in full knowledge of the associated costs and procurement professionals know that they’re only buying the software licenses they are really needed. To get your SAM stakeholders in the loop, learn more about Snow’s Software Store Option or speak to a Snow SAM expert today.