By Randy Littleson
In this four part series, we’re going to break down the Software License Optimization Maturity Model and discuss what you can achieve at each level of maturity. This is the third in the series on Continuous Compliance – Level 3.
You can view the rest of the series here:
Level 3 – Continuous Compliance – Are we compliant with our software license agreements?
Level 3 enables the organization to identify what is “Entitled versus Consumed,” so that a software license compliance position is established. The inventory and usage data understood in level 2 is compared to a basic understanding of what was purchased. This can be done across the software estate.
At Level 3, organizations have the software asset management processes and tools in place to manage contracts and purchase order data—this provides basic entitlement data—how many licenses you bought for a specific software title. This is where a Stock Keeping Unit (SKU) Library comes into play. Purchase Order’s with SKUs can automatically be processed to understand exactly what has been purchased and then this can be compared to the inventory data. Traditional SAM tools only get you to level 2 and don’t have the built-in SKU Library to help automate the license reconciliation process. Software License Optimization solutions such as FlexNet Manager Platform provide a SKU Library of more than 700,000 software part numbers that automates this process to enable you to be continuously compliant with your software contracts. Even in cases where there are no SKUs on your purchase orders, FlexNet Manager Platform can learn from previous operator actions so that processing of future POs can be fully automated.
As with discovery, inventory and application recognition, there are several challenges with gaining and maintaining a clear understanding of your license entitlements:
- M&A Activity - Most organizations have gone through mergers and acquisitions (and divestitures) making it difficult to understand what is currently under the company’s control or what has been transferred to/from other organizations. M&A&D also makes it difficult for your software vendors to track what you own and is one of the major triggers of software license audit activity.
- Decentralized procurement - The control of software coming into the organization is often not streamlined through a centralized procurement department or single reseller. If cost centers or end users can purchase software on their own, maintaining an accurate picture of license entitlements is daunting. A central asset management database (repository) is very helpful in this regard.
- License Models - Software license models are getting more complicated. For example, Microsoft SQL Server has multiple editions, multiple license models (processor, core, Server-CAL, etc.), and multiple purchasing programs (EA, Select, Open). Knowing only that you bought SQL Server is not enough information – you need to understand how it should be counted.
Importantly, software governance must be established to realize continuous license compliance. If you are like most companies, you may be worried about whether your purchasing data is clean enough to get to Level 3; historical purchase and entitlement data can be a serious challenge. Software License Optimization experts can help you reach Level 3 by working with the various procurement sources, including your resellers and vendors, to understand your software license entitlements and establish a baseline. They can also help you put processes in place to streamline software license requisitions, control software coming into your organization, and make the collection and reconciliation of software purchases automated in the future.
Companies that reach Level 3 maturity have started to track software entitlements and have a centralized repository of data from which the overall purchase count can be calculated. At this point in the maturity scale, you can start putting together a license compliance position based on purchased versus installed software to address software audits* and annual true-up events.
* Thought for the day: several major software vendors derive 20 to 25% of their license revenue from software audits. Be prepared with best practice Software Asset Management (SAM) processes and tools that help you maintain license compliance and mitigate audit risk.
To learn more about assessing your Software License Optimization maturity, please view our on-demand webinar: Assess Your License Optimization Maturity and Develop a Plan for Improvement. Hear from IDC analyst Amy Konary as she discusses their Software License Optimization MaturityScape.