Software is a critical, strategic asset

Written by Sudhir Chowdhary | Updated: Oct 29 2012, 08:58am hrs
It needs to be respected just like a tangible hardware is respected

Buy the hardware, software is free a perception that is too often the case in India. Consider this scenario. When Rajeev, a senior technology consultant with an MNC, was moving to India, he had the option to head the same companys technology vertical in the country or to take on the role of a CIO in a mid-size Indian manufacturing company with a focus on exports. He chose the latter as he felt that it would give him greater freedom and flexibility to use his global experience to transform the Indian company into a leading exporter in its space. In the very first month, it was clear to Rajeev that his foremost task would be to bring internal systems and processes at par with global standards to offer greater confidence to the companys customers.

Two months into the system, Rajeev got the first challenge in the form of an email from a software publisher insisting on a software licensing review (SLR). Rajeev knew by instinct what the review meant; but was not certain why his firm had been targeted. He had been told that the firm followed the ISO aligned software assets management (SAM) practices and was considered a compliant solution providers by various suppliers and customers. He immediately called for a meeting with his technology team to understand the situation. It was surprising to see how vague the IT managers in the team were on what comprises SAM and its benefits. They were tracking software licenses manually either on paper or on spread sheets, without proper deployment tools.

One of the IT managers also informed him that the India market works on a different model and they are not obliged to keep a track of the software by law. The IT manager also went on to share the cost savings they have been able to achieve by using pirated software. Taken aback, Rajeev tried to make his team understand the need and importance of legal software and what comprised SAM, focusing on how without it the firms operating effectiveness would suffer. He also discussed the review notice from the publisher with his team to help them understand the gravity of using unlicensed software. They had to understand that the firm must be seen as compliant with global standards and any serious compliance issues may permanently damage the credibility of the firm. He was certain that for the company to show significant improvement in performance it had to manage its software assets better, meet IT governance requirements; and avoid security, financial, and legal risks.

Similar stories run among many organisations across the country. According to Roland Chan, senior directormarketing, Asia-Pacific, Business Software Alliance, the bigger issue is that many companies may be using illegal software unknowingly owing to lack of proper systems to track such software or lack of knowledge in transferring licenses prior to disposing the hardware. Clearly, companies fail to understand the seriousness of the situation due to lack of awareness about the issue and its consequences.

The Business Software Alliance (BSA) is a trade group set up in 1988 and it represents some of the worlds largest software makers. Its principal activity is to stop copyright infringement of software produced by its members. Roland says, Lack of awareness about the cost and security benefits of standardising the management of software assets, and the serious legal and financial consequences of not having a robust process in place has led to companies struggling to imbibe proper software management techniques. According to INSEAD, 29% of CIOs and CFOs do not know what they spend on their core software assets each year. In fact, a KPMG study states that 86% of Indian firms have not even considered a policy for managing their software assets which clearly shows the lack of awareness of the benefits and protections that a robust SAM policy in an organisation would bring.

Under such circumstances, it is important for CIOs and IT heads to ensure that their teams understand the need for incorporating best practices in IT governance in their software environment directly impacting software asset optimisation, preventing data security breaches, stabilising the IT environment and protecting the organisation from legal, financial and reputational risks. IT managers should be thoroughly clued into the inventory, deployment and usage patterns of existing software assets in the firm.

Roland says, A robust software asset management policy and process helps CIOs have better control over purchase, acquisition, allocation, deployment and retirement of software. It gives organisations a deeper understanding of their specific software needs, software that needs to be retired. A centralised view into software management helps impact reduction in cost overruns, optimises usage of software, helps in planning future software investments to support organic or inorganic growth and helps the organisation remain stable.

Software asset management is a critical part of managing the software within an enterprise. Software is a huge asset. It is directly linked to productivity, security of the computer network.

According to Roland, there are a series of best practices that enterprises need to adopt to ensure that they get maximum productivity from that key asset. As Indian firms compete in a dynamic business landscapemarked by employee turnovers, geographical expansion, management of software assets is as critical as the management of other organisational assets, he summarises.