I was in a meeting recently and a discussion came up around using software, and what could happen if purchase records could not be proven during a vendor audit.
One of my colleagues made a statement that I have heard before but have not really connected to Software Asset Management:
“It’s easier to ask forgiveness than it is to get permission.” Do you know who originally said this? More about this at the end of this blog.
This statement made me think. Do companies really do this in practice with software vendors? Do they routinely just install software without a proactive approach toward license compliance? In other words, are they more concerned about asking “forgiveness” during a software vendor audit than reviewing their “permission” of product license rights?
If this sounds familiar, you could be spending far more money than you need to, and setup yourself up for a huge disruption due to an audit at some point in the future.
Here are some examples of potential negative impact if your SAM Program is reactive, not and not proactive:
- Risk of software audits
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Software audits are expensive. In a survey by Flexera, 65% of organizations were audited at least once in the past 12 months, and 23% were audited more than three times. Those license true costs were expensive. 44% resulted in a cost of over $100,000, with 20% over $1 million. [i]
Remember that any money spent as a result of an audit is an unbudgeted expenditure that must be diverted from other strategic projects.
- Overspending on software.
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In the same survey, 62% organizations said that at least 10% of their software went unused. 30% said that over 20% of their software was unused. For many companies, that is the equivalent of wasting hundreds of thousands of dollars.
Software licensing costs account for a significant portion of the typical IT budget—as much as 25 percent. This is a substantial cost for today’s enterprise.
3. Exposure to malware and security risk
According to the Business Software Alliance (BSA) recent Global Software Survey, 39% of all software installed globally is not licensed. In addition, 25% of the software used in the banking, insurance, and securities industries was unlicensed. And there is a high correlation between the use of unlicensed software and encountering malware. The threat of software vulnerabilities can be expensive, with the average cyberattack costing an organization $11 million. [ii]
So the key takeaway is that unlicensed software can be both risky and expensive.
Sometimes, “It’s easier to ask forgiveness than it is to get permission” might work for you when borrowing a car, scoring tickets to the big game and not taking your significant other, or eating that last piece of delicious cake. When it comes to software licensing, however, “asking for forgiveness” is quite risky and potentially costly. A proactive approach towards Software Asset Management with the right processes and solutions will enable continuous license compliance and the peace of mind that comes from the fact you will not need to ask for forgiveness from a software vendor.
So, how can you learn more about a proactive approach towards Software Asset Management? I would like to share with you three on-demand webinars that cover this in more depth. Whether you are in an IT Procurement, IT Asset Manager, or IT Finance, or IT Security role, you will learn some tips and insights to avoid having to ask for forgiveness.
How Software License Optimization Empowers IT Procurement
Be Faster! SAM Best Practices that Drive Business Value
Do You Manage Software? Understanding Your Role in Cybersecurity Defense
Finally, “It’s easier to ask forgiveness than it is to get permission[iii]” is generally attributed to Rear Admiral Grace Hopper. She was a pioneer of computer programming, and at the time of her retirement, was the oldest active-duty commissioned officer in the United States Navy.
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[i] The State of the (Software) Estate: Waste Is Running Rampant in Enterprises. 2016 Key Trends in Software Pricing & Licensing Survey Report. Flexera. January 2016.
[ii] Seizing Opportunity Through License Compliance. BSA Global Software Survey. Business Software Alliance. May 2016.
[iii] Only the Limits of Our Imagination. Exclusive interview with Rear Adm. Grace Hopper. Chips Ahoy, The Department of the Navy’s Information Technology Magazine. July 1986.