We frequently field questions from customers at all stages of their software asset management (SAM) journeys. Today, we tackle one common challenge that has garnered significant attention:
Should you connect your SAM tool to your procurement system to automatically create entitlements?
Software asset management (SAM) revolves around effectively managing an organization’s software licenses, ensuring compliance, reducing costs and optimizing resource utilization. Entitlements represent the rights granted to an organization to use specific software products, often linked to purchase agreements or contracts.
The concept of automating entitlement creation by integrating your SAM tool with the procurement system has gained traction in recent years. The allure of automating the creation of entitlements stems from the desire to streamline processes and eliminate manual errors. Some vendors in the industry advocate for this integration, emphasizing its benefits.
However, our interactions with customers have revealed a different side of the story. These challenges range from inaccuracies in entitlement data, difficulties in syncing procurement and SAM workflows, inabilities to handle complex license agreements and more.
In this article, we will shed light on the reasons behind our stance, why we do not recommend this integration, and provide some well-rounded perspective on this debated topic. We’ll also give you a quick look into our alternative, recommended process.
Key considerations before integrating your SAM solution with your procurement tool
Although it may sound more expedient to have your SAM tool interacting directly with your procurement software, this will bring about several issues you should be aware of. We’ll start with the fact that the purchase order (PO) does not include everything needed to create a complete entitlement.
The PO quantity many times does not equal the license quantity. For example, if the purchase is for a “pack” or bundle, such as 2-CPUs or a 5-pack, then the quantity purchased will not reflect the license quantity. If you were to purchase four bundles of 2-CPUs, you would of course have 8-CPUs in hand, but only four reflected as the quantity purchased. This is where you’ll start to run into serious difficulties with your data.
In another issue with this process, you have to keep in mind the description on the PO is often not standardized, so it does not include the correct product name, version, and/or edition information. Descriptions become highly subjective and dependent on the person completing them in their entirety. They may leave out crucial details you need.
Additionally, when it comes renewal time for your large enterprise or contract purchases, you’ll find that the renewals are usually scant. They typically only include minimal or single line items that do not outline everything that was purchased, leaving you once again without important information you’ll need to better manage your software assets.
While you might be able to find workarounds for the actionable items above, when it comes to this next point, you’ll want to understand its significance and prioritize it accordingly:
One essential data point you’ll need in your SAM processes is the maintenance schedule of your purchased applications. Please keep in mind, unlike other information included at the time of entitlement creation, you’ll find these dates are not included, primarily because they are unknown at the time of purchase. However, this element plays an incredibly vital role in determining upgrade rights and consequently, must be tediously and manually updated at a later date.
Lastly, we have one more crucial point to highlight on why we don’t recommend this process. A purchase order alone is not sufficient for establishing ownership of the entitlement. Unfortunately, purchase orders often face various challenges throughout their journey, leading to potential issues. They can get lost or altered before reaching the reseller/publisher level, canceled after creation, or even recreated with a new number. Sometimes, POs are generated but never sent at all. These uncertainties surrounding the reliability of purchase orders underscore the risks associated with relying solely on them to establish entitlement ownership.
The alternative, recommended process for entitlement creation
Given the drawbacks associated with directly connecting your SAM solution to your procurement tool, we recommend a more effective approach for streamlining entitlement creation. The key lies in paying attention to the details and being diligent in what you request from resellers/vendors.
You’ll find better success in entitlement creation through the following process:
- Identify the data elements required for an entitlement from a compliance and business perspective.
- Contact resellers and request a recurring report of software purchases. Provide a list of data elements they should include in their reports.
- Determine the frequency in which you should be receiving reports (weekly, bi-weekly, monthly). This will likely depend on your amount of purchases.
- Supplement reports with any required business data elements the resellers cannot provide (e.g. any sensitive information they wouldn’t have access to).
- Create/update agreements/entitlements from the reports, as they will include everything needed for complete entitlements.
Pro-Tip: While this is a more efficient method, some purchases will still go direct to the publisher. We recommend requesting a report from the procurement system for any software purchases that were not made through a reseller. If a significant number of purchases are made to the publisher, request a regular purchasing report from the publisher in the same manner as you did from the reseller(s). If the purchases are infrequent, some manual intervention will need to be done to fill in the missing data elements and add/import the data to the SAM tool.
Optimizing and improving your software asset management processes
The decision to whether to connect your SAM tool to your procurement system for automatic entitlement creation requires careful consideration. To delve deeper into this topic and gain other insights into optimizing your SAM processes, you can watch our on-demand webinar, “How to Start Preparing your Software Agreement and Entitlement Data for a SAM”. You’ll discover alternative strategies and best practices for effective entitlement creation and more.