SoftwareHaus Sourcing Asset Management (SAM) solutions leverage meaningful measurements and reports – including Bill of IT services, chargeback, Service Level reporting, Collection and vendor scorecards providing more effective engagements with business stakeholders.
Sourcing departments face increasing demands from their internal clients, their ever demanding suppliers, as well as increasing focus on continued departmental efficiencies, in summary they are being asked to transition to an increasing complex dynamic of cloud economics while having little or no funding to invest in the new wave of IT sourcing.
Third Party Software & Vendor Management
In many organisations third party vendors have multiple contracts, differing labor rates that don’t reflect equity or provide a consistent level of cost for services delivered. In many cases decisions are made at the points of pressure of demand from internal stakeholders and third party vendors providing time bound incentives.
The primary way that IT sourcing can manage these kinds of expenses is through the purposeful and intentional introduction of an external rate card system that is generated from the existing and current contracts negotiated with the third party vendors.
The guiding principle of third party Software and Vendor Management is to manage and maintain a well implemented IT Sourcing financial management practice. The goals are to provide insight into contracts and total spend by vendor, this enables an organization to better leverage and manage its vendor relationships. By emphasizing the total spend with a vendor and leveraging service level agreements (SLAs) and rate cards, an organization can better negotiate prices, eliminate duplicative contracts, and measure individual suppliers cost effectiveness.
The measurable benefits from Sourcing Asset management provide an ROI approach recognizing the value an organization gets from better demand management of third party software and services. This provides on average a recognized saving potential of 5% alone.
Software License Management
SoftwareHaus Sourcing Asset Management system (SAM) provides IT sourcing teams the tools to make sense of complex and ever changing licensing models from third party software vendors.
License management enables the understanding of what is critical to a companies needs, what is actually being used, and which licenses are no longer needed. Software license farming has two principle advantages.
First, this allows companies to pay less for their subscription updates and support payments, as well as providing avoidance of future demand by farming the existing licenses to reuse in other projects. Too often project managers build a “Bill of Materials” with no understanding that IT Sourcing can find them spare capacity available from the same department or another division.
Second, Having a robust license management system allows for significantly improved negotiation with third party vendors for renewals or for the purchase of additional software or services.
SAM Managing Infrastructure Hardware and Software
Infrastructure costs typically represent 25-40% of an organisations IT expenditure. The range depends on the industry and the IT delivery model and includes both labor and non-labor expenses. Infrastructure labor typically accounts for 45% or less of the total infrastructure cost, while hardware and software make up the rest.
The key drivers of infrastructure spending are Capacity and Utilisation, infrastructure teams cannot adequately forecast business demand and tend to over order capacity. This is often due to a conservative approach or from having been stuck without spare “headroom” in the past. Idle capacity leads to underutilization and ever increasing cost without return in benefit to the organization. Conversely, this extra headroom may mean that the sunken investment means IT Sourcing cannot take advantage of developments in technology that can provide further benefits to the IT Organisation with greater density and lower costs.
Accurate utilization and capcacity metrics input into the SAM solution enables better predictive capacity and utilization practice which directly leads to purchasing more efficiently.
The additional advantage is the closer alignment to the originating business is the better alignment to the demand driver, therefore, the Return on Investment (ROI) modeling is improved and can be managed throughout the lifecycle of the infrastructure.
IT Sourcing Asset Management Start Up Costs
An organization that develops an IT Sourcing Asset Management (SAM) system will incur labor costs that are associated with the integration of the tools, the process and to create reporting that meets the requirements of their current methods and practices.
SoftwareHaus uniquely assist initial labor funding costs by providing the initial build out phase as part of their service related to normal resale of Software and Services on behalf of third party vendors.
Effectively, we contribute to the future savings potential of the SAM system via the rebates system available from third party vendors to their channels.