Software Asset Managers Share 7 Software Asset Management Best Practices For SMBs

Software asset management is no longer an alien concept to small business leaders. In fact, GetApp’s 2023 IT Management Survey* found that 50% of organizations have between 21 to 30 software licenses, with three out of every five businesses already using dedicated IT asset management software for their software license management process.

But, is software asset management only about managing software licenses? To uncover this, we spoke to Julius Jankovsky [1], software asset manager at the Financial Conduct Authority. Jankovsky and his team manage software licenses and contribute to other areas of business involving teams from other BUs.

Clearly, this cross-collaboration entails more than just managing licenses. To ensure everything flows smoothly, software asset management best practices must be followed.

Managing software assets can mean different things to different professionals, and everyone has their own best practices to follow. To get more insight, we also interviewed Michael Kinkoph [2], a senior software asset manager at Accenture.

Irrespective of what stage your business is on during the software asset management journey, these best practices are applicable to most organizations: 

1. Precisely understand the software asset lifecycle

According to Gartner [3], understanding the stages a software asset goes through during its lifecycle and how your company’s policy will support and account for each stage is fundamental for its management. Any confusion here could lead to troubles down the road.

1. Request: The journey begins here. When someone in your company requires new software, they should use a central repository, such as a portal or an IT request system. This step is also an opportunity to educate your team about existing software that could fulfill their needs, potentially saving money and streamlining workflow.

2. Approve: Your organization needs a systematic method to approve software requests, taking into account financial implications such as budget constraints and cost-effectiveness. Non-standard software, which refers to applications not typically used or approved by your organization, requires careful consideration. In this stage, the role of a Software Asset (SA) manager becomes critical as they help balance needs, practicality, and budget.

3. Purchase: Regarding software procurement, your policy, ideally crafted with the input of an SA manager, is key. Users might need to follow a specific process involving sourcing and procurement rather than making independent purchases. Adherence to company policies is vital to avoid issues like overspending or purchasing incompatible or redundant software.

4. Deploy: Deployment involves getting the software operational. Common industry procedures include automated deployment tools or manual installation by IT staff. Managing different software types, from internal applications to freeware, necessitates clear deployment guidelines. Without these, you risk unauthorized installations or compatibility issues.

5. Manage: Effective management covers compliance monitoring (like ensuring adherence to licensing terms), security risk management (such as protecting against vulnerabilities), and handling contract renewals. It's essential to manage how software migrates between devices or users to maintain compliance, as neglecting this can lead to unlicensed use or security breaches.

6. Upgrade: The SA manager typically oversees software updates, including the latest patches and feature enhancements. These updates are necessary to maintain security and functionality. Handling infrastructure changes, like server upgrades or network alterations, is part of this stage. Failing to ensure upgrades comply with contracts and entitlements can result in non-compliance penalties.

7. Retire: Finally, when software is no longer needed, it's time to retire it properly. This means instructing users on how to uninstall software or remove access, particularly for SaaS applications, to avoid ongoing licensing fees or security vulnerabilities. Keeping track of end-of-life software is essential to avoid security risks and ensure your systems remain efficient and compliant.

Jankovsky emphasizes that most risks, such as legal compliance issues or security vulnerabilities, and the biggest savings, like negotiating better terms or avoiding unnecessary features, are realized before the contract is signed and the software is brought into the organization.

It's challenging to change a contract once it's already deployed. For example, if a company realizes post-deployment that the software doesn't meet certain security requirements, they might have to renegotiate under less favorable terms or purchase additional modules, leaving them in a less advantageous position with the vendor.

To avoid such scenarios, involve the software asset manager in the software purchase process at every point. Share regular updates in team meetings, include them in email discussions, or set up dedicated channels for purchase-related communications.

2. Take control over the 4Cs of your software assets

Michael Kinkoph underscores the importance of mastering the four Cs of software asset management: cost, control, compliance, and coverage.

1. Cost: In software asset management, a major focus is on reducing and avoiding unnecessary costs such as redundant software expenses or inflated licensing fees. This involves ongoing usage monitoring via IT asset management software to track software utilization patterns and frequency. 

By using the forecasting feature in these tools, businesses can prepare for future software expenses with greater precision. An essential part of this process is software asset rationalization. 

This step requires evaluating your software portfolio—the complete set of software assets owned or licensed by your company—to weed out redundant (unnecessary or overlapping functions) and underutilized software. For example, discontinuing licenses for software that is rarely used can cut down on wasteful expenditure.

2. Control: To maintain control, it’s essential to balance needs-oriented use—like software that specifically addresses key business operations such as accounting or customer management—with cost-efficient allocation of these assets. 

This strategic balance can be achieved by utilizing financial management software that assesses the utility of each application against its cost. Regularly evaluating each software’s contribution to your business helps ensure that every application serves a specific, valuable purpose.

3. Compliance: Managing software compliance is about getting a comprehensive view of all enterprise endpoints. This includes understanding the software’s:

• Criticality (importance to business functions)

• Impact (effect on business processes)

• Relationships (how different software interacts)

• Usage patterns 

Let’s examine cybersecurity software. Its criticality lies in protecting sensitive data and its impact could be seen in risk mitigation. Understanding its usage pattern helps ensure it is appropriately deployed and updated. This level of oversight is key in identifying potential vulnerabilities such as security loopholes or non-compliance with regulatory standards, leading to data breaches or legal penalties.

4. Coverage: The concept of coverage revolves around ensuring total transparency of IT assets to effectively optimize your SAM portfolio. This means having an unobstructed, detailed understanding of all your software assets.

Aligning this SAM portfolio with your business's current and future requirements necessitates a routine review and adjustment of your software inventory. 

For instance, a business moving towards eCommerce might add advanced cybersecurity tools to its portfolio for enhanced online transaction security, while phasing out older, less relevant sales software.

Focusing on these four Cs can streamline operations, increase efficiency, and align software asset management with broader business goals.

3. Select the right tool to support your SAM initiatives

We mentioned that more than half of our survey* respondents are using ITAM software to manage their software asset management process. But, which software you select and how you select it can make all the difference.

GetApp’s 2024 Tech Trends survey** reveals almost 60% of software buyers regret the technology they purchased in the past 12-18 months.

Follow these best practices from Gartner [4] to navigate the software asset management market and select the right tool for your business:

1) Define your SAM goals by outlining the purpose and objectives of your SAM function. Create a clear vision for the next three to five years that's in line with your business’s strategic priorities. It will be your roadmap.

Surprisingly, that’s exactly a change that 35.60% of businesses brought in their software selection process per our survey** to avoid buyer’s remorse for future purchases. 

2) Identify key software vendors by working with your team. Pinpoint the top three to five software vendors that your SAM will focus on. Consider factors like strategic importance, financial investment, and risk, especially based on the infrastructure these vendors operate on.

3) Understand vendor contracts by taking a close look at the contracts with these vendors. Evaluate their licensing models and future directions. Document how you will use SAM tools to manage these relationships effectively.

Also, create a formal Request for Information (RFI) and Request for Proposal (RFP) for your vendors. About 25.11% of businesses per our survey** did this as a preventive measure against buyer’s remorse

4) Explore multiple solutions without settling for one solution. Look for the best tools that align with your specific needs, such as resource capabilities, license types, and integration potential. You might need multiple solutions to get accurate data.

Nearly 31.19% of software buyers per our survey** updated or changed their initial list of vendors and explored multiple options to avoid buyer’s remorse.

5) Encourage your SAM tool providers to continuously improve based on client feedback. Highlight areas that need enhancement or additional investment.

This must be important, otherwise 33.35% of software buyers’ per our survey** wouldn’t have done it to avoid buyers’ remorse.

Jankovsky doubled down on this software asset management best practice with a tip from his personal experience. He advises investing solidly in the ongoing management of the toolset.

“No tool will do the job if it’s not maintained, whether it’s related to patching, updates, upgrades, or maintaining the data in the tool. For a toolset to be effective it needs to be up to date,” he says.

4. Ensure SAM team oversight on infrastructure changes

Jankovsky advises businesses to ensure that the SAM team has visibility into, and approves, all changes made by infrastructure teams, such as server upgrades, cloud migrations, or changes in virtualization platforms. These types of changes can significantly impact software licensing and costs.

This oversight is vital because, for instance, expanding server capacity or transitioning to a cloud computing environment can inadvertently increase the number of required licenses, thus affecting license costs.

A specific example might include adding more CPUs to a server, which could increase the number of software licenses required under certain agreements.

By involving the SAM team in these decisions, they can analyze the implications of these changes on licensing requirements and costs. The SAM team can then negotiate adjustments in licensing agreements or find more cost-effective solutions before implementing changes.

This proactive involvement helps control the budget and aligns IT infrastructure changes with your overall software asset strategy, ensuring that adjustments in infrastructure don't lead to unexpected expenditures.

5. Implement a software harvesting policy

Jankovsky strongly recommends establishing a software harvesting policy as a best practice in software asset management. The policy should stipulate that software is harvested, or reclaimed, if it hasn't been used for a period, typically 90 days.

While this process may not always lead to major savings, its significance lies in fostering a culture where software licenses are utilized efficiently. The crux of this practice is to prevent software licenses from being wasted by sitting idle on devices.

Regularly monitoring software usage and reclaiming unused licenses ensures that resources are allocated where they are genuinely needed.

This approach not only optimizes the use of existing licenses but also potentially reduces the need to purchase additional licenses, thereby contributing to more efficient and cost-effective software management.

Implementing such a policy underscores the commitment to maximizing the value of software assets and encourages a more responsible and strategic approach to license utilization.

6. Set up regular catch-ups with key stakeholders

If your business has these stakeholders, Jankovsky and Kinkoph advise setting up your SAM team’s regular catch-ups with them.

• Chief information office (CIO): The SAM team and the CIO can align SAM strategies with overall IT goals and address emerging tech needs, like integrating new software that supports remote working.

• Procurement: Catching up with procurement can help the SAM team in negotiating better software deals and understanding contract nuances, such as finding cost-effective licensing options during a budget cut. 

• Supplier management: These discussions can aid the SAM team in managing vendor relationships, ensuring your business gets the best value and service, like renegotiating terms for high-use software.

• Security operations: Collaboration with SecOps is vital for the SAM team to ensure software compliance and address security concerns, like updating licenses for security software following a threat alert.

• Infrastructure & cloud teams: Regular interactions can help the SAM team adjust software asset management according to infrastructure changes, such as cloud migration, which might affect software licensing needs.

• Finance operations: Engaging with FinOps is essential for the SAM team to align software expenses with financial planning, like adjusting software budgets in line with revenue projections.

This proactive involvement ensures that the SAM team is aligned with the needs and activities of different departments, leading to more efficient resolution of licensing and software assets management concerns.

Additionally, establishing a governance board with senior leadership from each stakeholder group is crucial.

This board serves as a platform to raise and address issues affecting all groups, ensuring a comprehensive understanding and strategic management of software assets across the organization.

This practice not only fosters collaboration but also enhances transparency and alignment with the company’s overall software asset strategy.

7. Timely assess the effectiveness of your SAM tools

Regularly evaluate the performance of your software asset management (SAM) tools. Jankovsky says this assessment is crucial to ensure your SAM strategy is effective and aligned with your business needs. Consider these metrics:

• Percentage of environment covered: This metric evaluates how much of your software environment is monitored and managed by the SAM tool. A higher percentage indicates more comprehensive coverage.

• Management and maintenance time: Assess how much time is required to manage and maintain the tool. Efficient tools should simplify these processes, not complicate them.

• Accuracy: Evaluate the accuracy of the data provided by the SAM tool, such as software usage, compliance status, license expiration dates, and software version information. Accurate data is important to make decisions such as knowing when to renew licenses, upgrade software, or reassess compliance strategies to avoid potential legal issues or fines.

Jankovsky also cautions that immediate savings might not be evident after implementing a new SAM service. Often, the introduction of a robust SAM system uncovers hidden risks previously unnoticed due to lack of visibility in the software environment.

However, the SAM function should aid in addressing these risks, possibly mitigating them at minimal costs. Over time, it should also help the organization identify opportunities to optimize software usage.

This approach not only safeguards against compliance issues but also paves the way for future software asset optimization, turning potential risks into opportunities for efficiency and cost savings.

While the best practices we’ve discussed are invaluable, their effectiveness is maximized only when you have dedicated in-house expertise in software asset management. Sure, partnering with an agency is an option, but having a dedicated software asset manager can make a significant difference.

They are the ones who can directly communicate with vendors, secure the best deals, maintain the organization from the inside out, and ensure any outsourced activities are being executed optimally. This is key to sustained management of your company's software assets and licenses.

To help you get started on this journey, enter your details below and download GetApp's strategy-on-a-page template. This tool offers a bird's eye view of your business's priorities and primary focuses for the next one to three years. This will allow you to brainstorm and plan your software asset management strategy effectively, ensuring you're prepared for both current needs and future developments.