By John Lipsey
The US Treasury Inspector General (IG) issued a report recently entitled, “Desktop and Laptop Software License Management Is Not Being Adequately Performed.” The report found among other things that the IRS needs to better adhere to guidelines and industry best practices around software license management. It also should centralize management of its licenses and implement technology to track, manage and optimize those licenses.
The report found many specific instances in which improvement is warranted. For instance, for some of the agency’s software titles, the IG found the IRS using more software than it is entitled to – therefore rendering it out of compliance with its software contracts and subjecting it to financial penalties. There were also examples enumerated in the report where the IRS purchased too much software, and therefore wasted taxpayer dollars on “shelfware.” For other software titles, the agency could not produce significant documentation to enable the IG to arrive at a conclusion with respect to its license position for those vendors.
The IG stated that the IRS spent $235 million taxpayer dollars on software to run the agency in 2011. Flexera Software estimates that as much as 5%-25% of that spend, or $12M-$59M, could be saved by implementing Software License Optimization best practices and technology. This estimate is partially based on anecdotal accounts of customers dealing with the problem. But there is a growing body of research, such as Flexera Software’s Software Pricing & Licensing Survey, prepared jointly with IDC, showing the extent of waste in organizations due to both non-compliant software use (audit costs) and software overspend.
The IG report offered several recommendations for to the IRS to help it stop the bleeding, including:
- Develop detailed standard operating procedures for using software licensing tools to manage software licenses.
- Implement a specialized software license management tool designed to discover, track, and manage software deployments and usage.
- Develop an asset management repository of software licensing data and maintain the repository with a specialized software license management tool.
- Maintain data in the repository that the IRS can use to more effectively review software licensing agreements, purchases, deployment, usage, and other related aspects of licensing to identify additional savings on software spending.
When implementing these recommendations, the IRS should look for direction to other government agencies that have successfully implemented license management and Software License Optimization programs. In a recent blog post on the IG report by Citizens Against Government Waste (CAGW), Deb Collier, the Technology Policy Director, noted that at a CAGW-sponsored event:
“… a former Federal Aviation Administration Aviation Traffic Organization CIO, Steve Cooper, discussed his experience in creating software asset management policies for the agency using private sector tools. According to Cooper, using these tools, the agency was able address the overuse and underuse of various software licenses, formalize the process for tracking software use, and create a competitive software pricing environment in an agency app store to allow employees to access the software they needed.”
The IRS can also look to the example of a Flexera Software customer – a US Military agency that was able to save millions of dollars by implementing FlexNet Manager Suite to reduce software license spend.
Learn more about implementing an effective software asset management and license optimization program by viewing our on-demand webinar series: Software License Optimization 4-part Webinar Series