Cost management is always an important aspect within SAM, but it has come into even clearer focus during 2020. Reducing spend has, in some cases, become central to an organisation’s survival and so finding new ways to reduce costs can be critical to keeping things moving through difficult times. While there is, rightly, a lot of focus on SaaS & IaaS cloud, there are other areas to which one can look in order to realise net new cost savings.
Due to its somewhat esoteric nature, complex licensing models, and huge business importance, engineering software isn’t always in scope for SAM teams. If that’s the case for you, looking for new savings with engineering software can be a positive in (at least) two ways:
Engineering software is expensive. Licenses for common engineering products typically range from $1,500 – $4,000 per license per year, meaning there’s the potential for some real wasted spend if you’re not on top of the license management.
Engineering software tends to be licensed on a concurrent user basis. Products will have “pools” of licenses and when a user requests access, a license is granted if there is capacity in the pool. If there is no capacity, the user is denied access to the software.
This can lead to over-licensing as the immediate reaction may well be to purchase additional licenses to meet demand. However, it could be that 12 minutes later a team of engineers logged out for the day – freeing up several licenses and negating the need for those additional purchases.
Equally though, you need to consider what is the cost to the business if there aren’t enough licenses? If a project is delayed, or a critical last-minute change can’t be made, because there aren’t enough licenses available – that is not going to cast ITAM in a good light! Make sure to balance the needs of the business along with the need to reduce software costs – perhaps agree a buffer for certain products where your license count is “average # of users + X” for example. Be sure to have an ongoing review process to keep waste to a minimum.
Make sure key people – users, managers, procurement etc. understand how the licensing works. User training can be critical to any software related project, and effective management of engineering software is no different.
People may not realise that being denied access to a license doesn’t necessarily mean “there are no licenses” but rather “there are no licenses…right now”. Helping them understand the different license metrics such as:
Should lead to fewer issues and, hopefully, few unnecessary licenses being purchased to meet demand that isn’t actually there.
If your organisation is based in multiple countries – particularly those in different time zones – effective global management of your licenses can lead to software cost reduction. Where the license model is based on concurrency, there’s no need to have duplicate licenses for different regions where one set will be sitting idle while users sleep.
Understanding your global demand in terms of active utilisation, not just total number of users, may enable you to “follow the sun” and reduce the number of licenses required – reducing your next renewal bill. One big caveat though – make sure your agreement allows this. Many software vendors have restrictions around sharing of licenses across certain geographical boundaries so be sure to read the fine print! If it isn’t there, talk to the vendor and see if you can negotiate such a clause being added to your contract.
Working closely with internal stakeholders and understanding how the business is using the software assets you’re proposing to manage can bring several benefits to the modern ITAM manager.
Step 1: Know which projects are taking place throughout the business and what engineering software resources are required including license types and quantities.
Step 2: Understand the importance and time sensitivity of each project. This may allow you – and your fellow stakeholders – to prioritise projects and allocate license resources accordingly.
Step 3: Monitor project end-dates and manage license quantities and allocations accordingly
Step 4: Have a process/system to identify who is using particular programs in real time
Renewals can be a big part of engineering software spend. Older license models typically have annual support and maintenance requirements while the increasing move to SaaS licensing models means even more renewals to contend with. Make sure you’re aware of all the upcoming renewals, analyse where reductions or changes can be made, and ensure the process is started with the various vendors in plenty of time. Some software vendors state you must advice of such changes 30-90 days before the renewal date so remember, forewarned is forearmed!
As an example – a large transportation organization, using ServiceNow® Software Asset Management, discovered it was paying almost $200,000 in annual maintenance costs for users of an engineering application, despite these users having left the organization several years previously!
Many of the engineering software products use different license management servers, meaning you can quickly end up with half a dozen different portals for tracking your engineering software portfolio.
Having a single source of truth is key – it reduces overheads associated with data management and collection, makes ensuring compliance (and defending audits) easier, and helps increase the chances of finding cost optimisation opportunities.
Being able to report on all your engineering software centrally and easily will increase the speed and effectiveness of decision making, another key element of increasing maturity, customer service, and cost savings. Being able to centrally see all usage, alerts, denials etc. will allow patterns to be spotted and changes to be made that benefit everyone. Equally, the ability to automatically harvest/allocate licenses and alert users when licenses become available will speed up workflows and improve the user experience.
To learn more about finding new savings with engineering software and ServiceNow’s new engineering capabilities, check out this recent webinar: Reduce specialty software costs with Engineering License Manager