KPI in software asset management
Software licenses and digital assets are indispensable in today's business world. However, the management and optimization of these assets present companies with a variety of challenges, in particular the lack of transparency of IT service costs and inefficient use of software licenses. In software asset management, clear information and effective decision-making are crucial to overcoming these challenges. This article illustrates the importance of key performance indicators in SAM and shows how they can help companies to optimize their software usage and reduce costs.
The purchase of every license for your company leads to costs, regardless of whether the license is used or not. The aim of license management should therefore not only be to avoid risks due to under-licensing, but also to ensure a comprehensive overview of existing license and software inventories through transparent procedures. The current challenges in software asset management are more complex than ever. Vendors are constantly adapting their license models, while some products require purchase as part of a comprehensive package. This creates an opaque situation for companies. Without clear information, there is a risk that companies will make inefficient new purchases.
But how can SAM teams ensure that they make informed decisions? The key is to use benchmarks. By using the right indicators, SAM teams can identify the optimal path and base their decisions on solid foundations.
In software asset management, certain KPIs are essential for evaluating the efficiency and profitability of software usage. These KPIs not only provide insights into the current use of software licenses, but also enable risks to be identified and optimization potential to be tapped. Some key KPIs are explained in more detail below:
License usage level:
Ratio between used and available software licenses.
High value: efficient use, low value: unused or underused licenses.
License efficiency:
Compares the required licenses with the licenses actually used. This checks whether the correct edition has been procured or whether the edition is oversized (e.g. Standard vs. Pro version). This clarifies the question: Does the user have the right edition? Would a standard version be sufficient for his activity?
Utilization rate:
Measures the ratio between available licenses in the warehouse and licenses actually used. A certain safety stock is advisable to cover ad hoc requirements. This key figure should be checked at product level and adjusted individually for each product.
These KPIs serve as important performance indicators at product level to assess the effectiveness of the SAM and to take targeted measures to improve software usage and management.
Examples from practice:
Towards the end of the first quarter, one customer was due to renew its maintenance contracts with the manufacturer Vector. Through a detailed analysis of the portfolio, including the key figures of license usage and utilization rate, we were able to reduce the annual maintenance fee by 11%.
When reviewing the inventory, we discovered that the license usage rate was very low. As a result, we terminated the maintenance contracts for licenses that had not been in use for some time and were not being used despite the expected increase in business.
The second example concerns the extension of IBM products. We were able to achieve savings of 29% through a user analysis.
We used a SAM tool to examine license usage patterns over the last 9 months. We found that even during peak usage times, fewer licenses were being used than originally assumed. At the same time, we analyzed the inventory and found that licenses had not been used for some time. Overall, the portfolio at this manufacturer was streamlined, whereby a safety stock was retained in order to avoid new purchases.
These measures not only led to a reduction in costs, but also to better use of the remaining licenses, which increased overall efficiency.
These examples illustrate the practical benefits of KPIs in the SAM area. Targeted monitoring and analysis of these KPIs can not only reduce costs, but also significantly improve the efficiency and profitability of software usage.
Finally, it is important to emphasize that it is necessary to regularly review the defined KPIs and carry out a critical self-analysis. Without appropriate measures following the analysis, the figures recorded are of little use.
Author: Khalid Abu Nemah