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Why centralize license management?

Having a centralized license management function plays a large part in ensuring total visibility of the software licensing landscape. Managing and storing all of your software licenses in a central point provides the SAM team with the information required in order to make business-wide decisions.

In this blog, I will look at the challenges encountered with a decentralized license management structure, and the arguments for moving the management of software licenses to a central solution.

PROBLEMS WITH A decentralized LICENSE management

Various departments or users ‘inherit’ the responsibility and management of certain vendors software licenses, contracts and general compliance.

Naturally, users may not have any knowledge of, or interest in the vendor’s complex licensing structure, instead they may only care about the functionality of the software.

This happens because SAM is a new business practice to organizations, so the management of licenses has been historically decentralized. As you can imagine, this can lead to all sorts of issues:

  • Lack of licensing knowledge and understanding
  • Lack of license optimization
  • Lack of effective license management
  • Financial issues (over/under spending)
  • Lack of optimization of any SAM technologies
  • Lack of risk identification or understanding.

All of the above should be addressed as a high priority as they have a detrimental impact on the business as a whole. A prime example of how this could affect a business is through bad audit experiences.

With a de-centralized license management function, the business and the SAM team will be unaware of where the biggest risks lie and what the organization’s current Effective License Position (ELP) is.

This leads to audits causing even more disruption and cost than would otherwise be the case if the organization managed licenses from a central solution. The key point is that it is the organization’s compliance risk, not department or local level compliance risks.

Having a decentralized license management function where local departmental heads manage their own software licenses does not provide value to the overall organization and creates risk as compliance is not being actively managed. If compliance isn’t being managed, then software licenses are certainly not being optimized.

Local departments are not at risk from being found non-compliant by auditors – that risk falls on the legal entity - the organization.

Decentralized license management of this kind can result in the auditors finding large amounts of unlicensed software, which then results in large penalties and true-up costs, and possibly damage to share/stock prices as well as a damaged reputation. This situation is one that no organization wants to be in, but all the evidence points towards it happening time and time again.

Snow Software asked a number of experts what they think will be in store for 2016 and the overriding response was ‘increase audit activity’ or ‘more of the same’ from auditors.

Centralizing the management of where software licenses are stored and managed is therefore a good mechanism for audit preparation. All of the data will be in the same place (or same technology), licensing or SAM experts will then be able to analyze the information and identify key areas of risk.

Keeping key stakeholders ‘on-side’

The employee who has been tasked with looking after the licenses for a certain vendor or department is now a key stakeholder for the SAM function. They will understand the previous license and procurement related processes related to the vendor they are looking after, the required data when identifying entitlement versus deployment and be a general source of knowledge.

This stakeholder may want to continue to have some sort of responsibility with the management of the licenses.

This is where the ‘Software Champion’ or ‘Software Sponsor’ scheme plays an important part. This is when the business assigns the stakeholder as the key contact for the software vendor, whilst the SAM team manages the software licenses and relevant contracts.

Centralizing the management and data of software licenses does not mean that they will no longer required. By centralizing license management, the organization will still benefit from their users expertise – it just ensures that all users work from a single, reliable data source. This will help the ‘Software Champions’ provide licensing or software support more effectively.

the SAM Team ‘owns’ the Technology

The primary users and managers of SAM technologies is the SAM or software licensing team.

They see all of the data, all of the license information and are using the SAM technology every day to monitor compliance, generate reports and perform various SAM-related actions. Therefore, it makes sense for the management of software licenses to be managed through the SAM technology (such as Snow License Manager).

In contrast, with a decentralized environment, the SAM team will not have all of the data available to provide a best practice function. The SAM Team will be unable to identify risks for certain vendors (as they do not have the information in a single data source).

They will not be able to provide adequate information to the procurement team for the up-and-coming software renewal, or inform key stakeholders of potential risks (Snow License Manager shows usage stats and deployment information, but without the license and understanding the license metrics the SAM team cannot provide the best advice).

Finally, they will not be able to provide business intelligent advice on the best course of action to optimize existing software licenses. By centralizing the management of licenses and software contracts, the SAM team has all available and relevant information within the central technology, which enabling it to provide valuable business intelligent data.

DECENTRALIZED SAM DOES NOT MEAN DECENTRALIZED CONTROL!

A decentralized license management function happens almost by accident. The lack of SAM team within a business means that software management and ownership falls elsewhere.

As long as your organization is managing software licenses from a central management solution, then having a decentralized SAM function does not mean you are in less control of your software assets. Large enterprise organizations are likely to have members of the SAM team scattered across different locations, each with their own local strategy and goals.

Within Snow License Manager, you can provide users with their own logon details and accounts. Within this account, they can then create their own custom Snowboards, their own reports and even configure the account so they only see information related to them.

Whilst the SAM may be decentralized, the management of licenses is centralized to Snow License Manager. All SAM users are looking at the same data, and managing licenses from the same source.

This is beneficial because it allows the different regions/SAM professionals to focus on data relevant to them – whilst using the same license and data sources as the rest of their SAM colleagues.

CENTRALIZED MANAGEMENT SUCCESS

Having a centralized license management has played dividends for a large enterprise Snow Software customer.

One of the biggest challenges has been getting the data for the audits from three disparate systems and being consistent,” states the customer. “Each division wanted to hand over data in a certain way but I would rather have all the data and be able to make a decision on whether we are compliant or not.  By centralizing the data using Snow, it has already been very significant in a couple of audits and it has saved us tens of millions of dollars.”

Defining how you should manage your software licenses within your organization should be set out in your SAM strategy.

If you are struggling with your SAM strategy, or do not think it is making the impact it should, then read our whitepaper entitled ‘SAM in an imperfect world’ to help you understand how to overcome your SAM challenges.

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