Software Asset Management

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Software Asset Management

  1. 1. Software Asset Management – Key to Infrastructure Optimization October 2008 ADVISORY
  2. 2. About KPMG  KPMG is one of the “Big-4” professional services firms, with over 123,000 employees in over 140 countries  KPMG provides three distinct lines of service: Audit, Tax, and Advisory  Under Advisory KPMG provides Software Asset Management (SAM) and Software License Compliance services © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 2
  3. 3. The SAM Optimization Model © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 3
  4. 4. What is Software Asset Management “All of the infrastructure and processes necessary for the effective management, control and protection of the software assets within an organization, throughout all stages of their lifecycle” ITIL Best Practice guide - Software Asset Management  SAM is NOT just about a tool  SAM is NOT just about PCs  SAM is NOT just about a one-time discovery exercise  SAM is NOT just about IT © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 4
  5. 5. Infrastructure Optimization (IO) • Reactive • Reactive • Proactive • Proactive • Ad hoc • Stable IT • Accountable • Optimizing • Problem- • Request • Increased Costs and Driven Driven Monitoring Quality • “Avoiding • Change • Formal • Agile Downtime” Management Change • Self Assessing and Planning Management and • “Keeping It • SLA’s Continuous Running” Improvement • Improvement • “Taking The • Predictability Lead” • “Quality Driven” Basic Standardized Rationalized Dynamic Source: Microsoft Corporation © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A.
  6. 6. SAM Optimization Model Source: Microsoft Corporation © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A.
  7. 7. SAM Optimization Model Competencies Key ISO 19770-1 Competency Competency Question SAM throughout How has software asset management (with documented procedures, roles, responsibilities and Organization executive sponsorship) been implemented in each infrastructure group? Organizational Management SAM Self Improvement Does your organization have an approved SAM self improvement plan? Plan Hardware and What percentage of user PCs and servers are included in a centralized software inventory/CMDB Software SAM Core - (configuration management database); which is populated by a software tracking tool? Inventory Inventory Accuracy of How often do you reconcile software inventories with other sources to verify accuracy of Inventory assumed license metrics (for example user counts based on HR employee records.)? License What percentage of procured software licenses are recorded in a license entitlement inventory (a Entitlement SAM Core - central repository/tracking of all licenses owned and/or previously acquired)? Records Verification Periodic How often do you reconcile software deployments (usage) to software entitlements (purchases)? Self Evaluation Software entitlements are software licenses owned or previously acquired. SAM Core - Operations Operations Management How do the various Operations Management functions (contracts, financial fixed assets, service management records support, security, networking) use software and hardware inventories in their daily roles? and interfaces interfaces Acquisition What percentage of total software purchases in your organization are made through or are Process controlled & tracked by centralized procurement? Lifecycle What percentage of total software deployed across organization's PCs and servers (considering Deployment Process all operating systems) is installed through centralized sources or through a controlled distribution Process Interfaces environment? * Additional SOM scorecard details are available to assist with objective testing. Retirement What percentage of retired hardware assets are tracked in a way to enable the software on them to Process be reused? © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A.
  8. 8. Key Performance Indicators for each SAM Competency Key Comp. Basic Standardized Rationalized Dynamic Software tracking procedures have been Senior executives have demonstrated that SAM roles and responsibilities are not A representative with direct managerial SAM formally documented and approved by SAM is a top priority for the organization. defined. Software tracking is not responsibility for SAM has been identified for throughout stakeholders. SAM procedures are All infrastructure groups in the org. use implemented throughout the organization (in each infrastructure group within the Organization implemented throughout all infrastructure documented SAM procedures and have every infrastructure group). organization. groups in the organization. resources that SAM to track inventories. A SAM self-improvement plan has defined There is no plan for implementing SAM; or SAM Self A SAM self-improvement plan has been scope, schedule, assigned recources and is Continuous improvement SAM maturity no SAM improvement plan has been Improvement defined with scope, schedule and has an based on continuing the improvement processes are implemented to support a completed within the organization with Plan approved budget. established after the previous self- flexible controlled environment. executive sponsorship and budget. improvement plan. Hardware & The % of total hardware and software tracked The % is not tracked but is between 68% to The % is tracked and is greater than 99%. Software in a CMDB is not tracked but is less than The % is tracked and is between 96% to 99% 95% Exceptions are continuously decreasing. Inventory 68% Accuracy of Inventory details are reconciled with the Reconciliation is done annually Reconciliation is done quarterly Reconciliation is done continuously. Inventory orginal source rarely or ad-hoc License The % of license entitlement in a repository is The % is not tracked but is between 68% to The % is tracked and is greater than 99%. Entitlement The % is tracked and is between 96 to 99% not tracked but is likely less than 68% 95% Exceptions are continuously decreasing. Records Periodic Self Deployment & entitlement reconciliation is Deployment & entitlement reconciliation is Deployment & entitlement reconciliation is Deployment & entitlement reconciliation is Evaluation done rarely or ad-hoc done annually done quarterly done continuously. A single inventory/CMDB is used by all Operations A federated system is used which combines Operations Management functions in the Management Operations Management functions generally Individual software and hardware inventories and/or reconciles individual inventories. organization. Formally documented records and do not use software and hardware inventories. are used by each function Procedures are documented with assigned procedures continually evolve with the interfaces roles and responsibilities for stakeholders. organization. The % is tracked and is greater than 99%. The % of software purchases centrally The % is tracked and is between 96% to 99%. Acquisition The % is not tracked but is between 68% to Exceptions are continuously decreasing. controlled is not tracked but is likely less than Procedures are documented with assigned Process 95% Formally documented procedures continually 68% roles and responsibilities for stakeholders. evolve with the organization. The % is tracked and is greater than 99%. The % of software deployed using a centrally The % is tracked and is between 96% to 99%. Deployment The % is not tracked but is between 68% to Exceptions are continuously decreasing. controlled procedure is not tracked but is Procedures are documented with assigned Process 95% Formally documented procedures continually likely less than 68% roles and responsibilities for stakeholders. evolve with the organization. Software on retired hardware is tracked and The % of hardware assets that are retired and The % is tracked and is greater than 99%. available for reuse; the % is between 96% to Retirement recorded in a way to enable the software on The % is not tracked but is between 68% to Exceptions are continuously decreasing. 99%. Procedures are documented with Process them to be reused is not tracked but is likely 95% Formally documented procedures continually assigned roles and responsibilities for less than 68% © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. evolve with the organization. stakeholders.
  9. 9. The Survey © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 9
  10. 10. SAM Maturity Survey Overview Overview Methodology Scoring KPMG surveyed software In conjunction with IDC, After calculating question users about what they do to KPMG conducted 1,013 points, each organization manage their software interviews via a web survey was placed into one of assets. We measured where in February 2008. The survey following four maturity levels: software users stand in terms comprised 601 responses Basic, Standardized, of their SAM maturity. from companies with less Rationalized & Dynamic. than 1,000 employees; 304 interviews from companies with more than 1,000 employees; and 108 interviews from government and educational organizations. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 10
  11. 11. Key Observations KPMG distilled four key observations out of the survey responses: 86% of respondents lack complete and accurate information about SAM maturity is software deployments and entitlements. These organizations may not be generally lacking protected from compliance risk, and may have limited ability to manage their IT environments effectively. The survey indicated that as organizations gain control by proactively Mature SAM is managing their software assets, they also realize related IT labor cost consistent with reduction by as much as 50 percent. This is prevalent with the more achieving lower IT mature organizations and specifically with organizations that use SAM labor costs tools and processes to manage the software asset cycle. Larger organizations Larger companies tend to be more mature, while smaller companies tend have a tendency to be to be less mature. This is not surprising given that larger organizations more mature, overall are likely to have more mature IT processes overall. Certain industries are Certain industries are more mature than others. The more mature more mature than industries include automotive, aerospace, banking, insurance, and others utilities. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 11
  12. 12. Key Observations KPMG distilled four key observations out of the survey responses: 86% of respondents lack complete and accurate information about SAM maturity is software deployments and entitlements. These organizations may not be generally lacking protected from compliance risk, and may have limited ability to manage their IT environments effectively. The survey indicated that as organizations gain control by proactively Mature SAM is managing their software assets, they also realize related IT labor cost consistent with reduction by as much as 50 percent. This is prevalent with the more achieving lower IT mature organizations and specifically with organizations that use SAM labor costs tools and processes to manage the software asset cycle. Larger organizations Larger companies tend to be more mature, while smaller companies tend have a tendency to be to be less mature. This is not surprising given that larger organizations more mature, overall are likely to have more mature IT processes overall. Certain industries are Certain industries are more mature than others. The more mature more mature than industries include automotive, aerospace, banking, insurance, and others utilities. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 12
  13. 13. Aggregate Maturity Observations 1% 13% Basic Standardized 27% Rationalized 59% Dynamic Key Observations The survey results revealed that 86% of respondents are Basic or Standardized, which implies they do not have complete and accurate information to enable their organizations to effectively manage their IT environment. Organizations in the Basic or Standardized levels need to implement business practices to ensure their software assets are proactively managed and their enterprises are protected from license compliance risk. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 13
  14. 14. Key Observations KPMG distilled four key observations out of the survey responses: 86% of respondents lack complete and accurate information about SAM maturity is software deployments and entitlements. These organizations may not be generally lacking protected from compliance risk, and may have limited ability to manage their IT environments effectively. Mature SAM is The survey indicated that as organizations gain control by proactively consistent with managing their software assets, they also realize related IT labor cost achieving lower IT reductions. This is prevalent with the more mature organizations and labor costs specifically with organizations moving into the Rationalized level. Larger organizations Larger companies tend to be more mature, while smaller companies tend have a tendency to be to be less mature. This is not surprising given that larger organizations more mature, overall are likely to have more mature IT processes overall. Certain industries are Certain industries are more mature than others. The more mature more mature than industries include automotive, aerospace, banking, insurance, and others utilities. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 14
  15. 15. Total Annual SAM Cost vs. IO Total Annual Cost FTE Labor Cost/PC Total Annual SAM Cost IO Total Annual Cost Basic Standardized Rationalized Maturity Level Key Observations IT labor cost for components of SAM reduces consistently with the reduction of IT labor costs for overall Infrastructure Optimization (IO) costs between Standardized and Rationalized. Overall IT labor cost savings that companies obtain as they move from Basic to Standardized in IO are not directly because of SAM IT labor. As companies implement new SAM maturity to move from basic to standardized IT labor cost does not increase. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 15
  16. 16. Key Observations KPMG distilled four key observations out of the survey responses: 86% of respondents lack complete and accurate information about SAM maturity is software deployments and entitlements. These organizations may not be generally lacking protected from compliance risk, and may have limited ability to manage their IT environments effectively. The survey indicated that as organizations gain control by proactively Mature SAM is managing their software assets, they also realize related IT labor cost consistent with reduction by as much as 50 percent. This is prevalent with the more achieving lower IT mature organizations and specifically with organizations that use SAM labor costs tools and processes to manage the software asset cycle. Larger organizations Larger companies tend to be more mature, while smaller companies tend have a tendency to be to be less mature. This is not surprising given that larger organizations more mature, overall are likely to have more mature IT processes overall. Certain industries are Certain industries are more mature than others. The more mature more mature than industries include automotive, aerospace, banking, insurance, and others utilities. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 16
  17. 17. By Company Size Observations: Overall 100% 6% 2% 6% 11% 13% 19% 25% 75% 35% Maturity Level 33% 50% 41% 81% 25% 54% 46% 28% 0% <100 100-999 1,000-9,999 10,000+ # Employees Basic Standardized Rationalized Dynamic Key Observations The survey results suggest that larger organizations tend to be more mature than smaller organizations. This result is expected, since larger organizations are more likely to have more mature IT processes in general due to scale of managed operations, increased regulatory requirements, and availability of resources. By contrast, it appears that smaller organizations may not have the means to invest as much in IT in terms of people, process, and technology as they typically have fewer people trying to do more things. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 17
  18. 18. Key Observations KPMG distilled four key observations out of the survey responses: 86% of respondents lack complete and accurate information about SAM maturity is software deployments and entitlements. These organizations may not be generally lacking protected from compliance risk, and may have limited ability to manage their IT environments effectively. The survey indicated that as organizations gain control by proactively Mature SAM is managing their software assets, they also realize related IT labor cost consistent with reduction by as much as 50 percent. This is prevalent with the more achieving lower IT mature organizations and specifically with organizations that use SAM labor costs tools and processes to manage the software asset cycle. Larger organizations Larger companies tend to be more mature, while smaller companies tend have a tendency to be to be less mature. This is not surprising given that larger organizations more mature, overall are likely to have more mature IT processes overall. Certain industries are Certain industries are more mature than others. The more mature more mature than industries include automotive, aerospace, banking, insurance, and others utilities. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 18
  19. 19. Survey Respondent Breakdown by Industry Industries Included in Survey Banking (depository) Wholesale trade Financial services Retail trade Insurance Engineering and management services Discrete manufacturing Accounting and professional services Process manufacturing Technology products or services Automotive and aerospace (manufacturing only) Other service Healthcare services Agriculture, forestry, and fishing Telecommunications Construction Broadcast and other communications Education Transportation Government Utilities Other (specify) © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 19
  20. 20. By Industry Observations: Automotive and Aerospace 70.0% 59% 60.0% Overall 50.0% 40.0% 35% 35% 30% 30.0% 27% Automotive and aerospace 20.0% 13% (manufacturing 10.0% only) 1% 0% 0.0% Basic Standardized Rationalized Dynamic Key Observations The automotive and aerospace manufacturing industry had the lowest number of companies ranked as Basic, highest number of companies ranked as Rationalized. Many in the automotive and aerospace manufacturing industry have already implemented ITIL processes and as a result their ability to manage their IT environment appears to be more mature. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 20
  21. 21. By Industry Observations: Banking 70.0% 59% 60.0% 50.0% Overall 42% 40.0% 32% 30.0% 27% 26% Banking (Depository) 20.0% 13% 10.0% 1% 0% 0.0% Basic Standardized Rationalized Dynamic Key Observations Banking appears to have higher overall SAM maturity compared to the average, which may be a function of the nature of the business and related regulatory requirements © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 21
  22. 22. Performance Against Individual Competencies Sam Optimization Model and Organizations’ Performance Findings The survey was based on 10 key competency questions (part of the SAM Optimization Model) designed to measure an organization’s overall level of SAM maturity. With respect to each of the key competencies, the SAM Optimization Model identifies different expectations for each of the four levels- Basic, Standardized, Rationalized, and Dynamic. The following slides detail sample key competency questions measuring an organization’s overall level of SAM maturity as well as overall results of organizations’ performance findings against individual competencies. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 22
  23. 23. SAM Components : SAM Improvement Plan 90 80 Respondents (%) 70 Overall 60 50 40 30 Existence of SAM 20 Competence & Self 10 Improvement Plan 0 Basic Standardized Rationalized Dynamic Maturity Key Observations Overall more companies are more Basic; overall fewer companies have a documented executive vision for SAM or a SAM implementation plan than the overall trend of maturity. Having a SAM improvement plan does not appear to be a priority for the organizations that are Standardized and Rationalized. Organizations that have enough cumulative maturity to be considered Standardized or Rationalized overall may benefit from developing a formalized strategy and SAM improvement plan. There are 2.4% (24 companies) that responded as having a dynamic mature SAM improvement plan which is higher than the overall trend. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 23
  24. 24. SAM Components: Hardware and Software Inventory 70 Respondents (%) 60 Overall 50 40 30 20 Completeness of Hardware and 10 Software Inventory 0 Basic Standardized Rationalized Dynamic Maturity Key Observations The trends for this component appear to map to the overall maturity trend very well. This component should therefore be considered a key indicator of overall maturity. Companies who want to understand their overall SAM maturity may benefit by first testing the completeness of their software and hardware inventories. Companies who want to increase the completeness of their software and hardware inventories, but struggle to know how to make a difference may benefit, by first focusing on increasing the maturity of their other SAM related components. For example: if the customer does not have a SAM improvement plan then, then developing one may directly effect future SAM HW completeness. You can’t improve your completeness if you don’t have a plan to do so. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 24
  25. 25. SAM Components: Accuracy of Inventory 70 Respondents (%) 60 50 Overall 40 30 20 Accuracy of Hardware 10 and Software Inventory 0 Basic Standardized Rationalized Dynamic Maturity Key Observations Accuracy of inventory is also a good predictor of overall maturity. This component appears to be slightly more difficult to achieve because 63 percent of the respondents were Basic when considering accuracy, compared to 58 percent when considering completeness. This indicates that more organizations believe they have complete inventories than accurate inventories. Organizations that have made sure their inventories are complete should also test to verify if they are accurate. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 25
  26. 26. SAM Components: License Entitlement Records 70 Respondents (%) 60 Overall 50 40 30 20 Completeness and Accuracy of License 10 Entitlement Records 0 Basic Standardized Rationalized Dynamic Maturity Key Observations More organizations for this component are Dynamic than the overall trend for all components. Some organizations may have more complete entitlement records than anticipated because the license entitlement inventory is often managed as a separate process (for example, by procurement), even if IT operations processes are not implemented in a mature way. 60 percent of organizations are Basic which means they have a software license inventory that is substantially incomplete. Such companies would struggle to effectively reconcile entitlement with deployment to mitigate the risk of paying either too much or too little for the software they are using. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 26
  27. 27. SAM Components: Periodic Self Evaluation 70 60 Respondents (%) Overall 50 40 30 20 Existence of Periodic Reporting and Self 10 Evaluation 0 Basic Standardized Rationalized Dynamic Maturity Key Observations Overall this component maps well to the general trend and is consistent with the trends observed for hardware, software, and entitlement inventory completeness and accuracy. As expected, organizations that collect and maintain inventory records for deployment and entitlement are also likely to do periodic reconciliations of such records. © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 27
  28. 28. Q&A Ron Brill Partner, KPMG LLP rbrill@kpmg.com (650) 404-4667 © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. 28
  29. 29. kpmg.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a through examination of the particular situation. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 145 countries and have 123,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss cooperative. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International performs no professional services for clients nor, concomitantly, generates any revenue. © 2008 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firms vis à vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative. 080433

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