The Transforming Landscape Of Software Asset Management

Cameron Farrar, Vice President - Head of Software Asset Management, Marsh McLennan(NYSE: MMC)

Cameron Farrar started his asset management career in 2009 at an Australian consultancy specializing in Government clients. Eventually moving to Fuji Xerox, he established a software licensing function, which served the business from two avenues. Here, he refreshed the value of the software that Fuji Xerox sells, driving revenue capture from audit and customer success and looking at their software internally from a traditional software asset management perspective. Farrar had a brief detour to Digital Marketing at Fuji Xerox, and success in these areas led his to set shared service functions expanding into fourteen markets in APAC for not only software licensing but digital and campaign marketing based in Kuala Lumpur. He has since moved to London, starting at Marsh McLennan leading the software integration of the Jardine Lloyd Thompson Acquisition and the acquisition portfolio. From here, he was promoted to lead software asset management globally across Marsh and McLennan and its businesses – Marsh, Mercer, Oliver Wyman, and Guy Carpenter. In this article, Cameron Farrar discusses the multifaceted options enabling decisionmakers to enhance integration and curate lucrative working models.

At the peak of artificial intelligence adoption, businesses necessitate quick and precise accountability. Software asset management systems that hold all operations in place share this dire need.

Software asset management today Cloud

There is an ongoing shift in software asset management (SAM) from large ‘perpetual’ legacy software estates towards software as a service (SaaS), infrastructure as a service (IaaS) and platform as a service (PaaS). This means the gap between software asset management and Cloud FinOps is reducing drastically. Businesses must understand how and where to leverage their significant legacy investments across the cloud to drive improved commercials across their contracts.

ESG

Effective software asset management can drive rationalization leading to data center consolidation and improved visibility across hardware and the ability to consolidate or move away from data centers or push towards more energy-efficient infrastructure.

In the next 5 years, computing power is expected to double year-on-year. Controls around purchases, inventory know-how and usage will allow us to support our partners in hardware asset management and infrastructure.

AI & Automation

For appropriate use cases for software asset management within the realm of automation, we are leveraging generative artificial intelligence (Gen AI). This can provide end-users access to knowledgeable resources and support software asset management best practices.

In the coming years, I do not believe we will be moving toward agentic AI. Our understanding of AI usage has to mature and be more augmentative. Once established, our algorithm-based budgeting and forecasting will streamline.

Organization x software vendors

Vendor relationships are critical to an efficient and successful SAM Practice.

Strategies to build and maintain these relationships center around communication. Regular catchups with vendors not only quickly combat roadblocks but allow them to meet performance obligations.

“In the next 5 years, computing power is expected to double year-on-year. Controls around purchases, inventory know-how, and usage will allow us to support our partners in hardware asset management and infrastructure”

Healthy vendor relationships often provide the SAM team with access to roadmaps, enabling businesses to understand the changes in software licensing and flag risks associated with increased costs through new technology adoption.

Finally, a key function of a SAM practice is to respond to publisher Audits. Healthy vendor relationships mean we are likely to be in a constant state of compliance. Ensuring the collaboration is seen as a partnership, we minimize the change of audit and the associated time and resource drain. Should there be an audit, the response where a good relationship exists will be far quicker and less painful.

Optimizing compliance and cost management in large organizations

To echo my above sentiments, the key is communication with SAM as a great enabler. Following a process such as Lean Six Sigma can be a great start here. It comprises: Define, measure, analyze,improve and control.

This involves all stakeholders adjacent to SAM, namely finance, architecture, sourcing and procurement, legal and compliance. Traditionally, given the complex audit and compliance risks, a focus is assigned to managing the top 20 percent of the publishers. This aligns with the 80 percent of annual software spend. Understand the policy and processes in place to drive accountability.

Cultivating a relationship with finance can aid cost management, avoid surprises at ‘true-up’ time and allow for more appropriate budgeting and forecast activities. It can further improve how software is tagged in the GL and across the budget for more accurate financial reporting. Ensuring SAM’s integration in the renewal and new technology onboarding process along with architecture, sourcing and procurement can drive us towards software standards and rationalize multiple similar locations. For unhindered financial exposure, cost management must be driven at the point of acquisition with effective lifecycle management.

Hopeful Innovations

Technology has rapidly evolved within the SAM space with new and established players like Flexera and SNOW recently merging. Improvements in technology are driving visibility across the software estate to cover the rapidly changing digital landscape, from publishers to the cloud and associated cloud migration. I am most excited about leveraging automation available within new tooling that will reduce the time taken on initial analysis – either across identifying overlapping usage, duplicate vendors or multiple contracts. This will enable the SAM team to be proactive and deliver increased value to the business.

Publisher Expertise

It will always be beneficial to have expertise in one or a few key publishers, such as Oracle or Microsoft given their prevalence. There is often the largest ability to influence hard savings to the business across publishers.

Do not neglect the soft skills

I may sound like a broken record, but communication is key. Interact clearly and often with your stakeholders, vendors and end-users. It builds trust and ensures that SAM stays at the front of mind of businesses’ C-suite.

Understand how the business and stakeholders make money

Often stakeholders may not care or understand how SAM impacts them. It is key to take the time to understand how businesses make money and the role of this department. For instance, delivering hard savings at a law firm can directly impact profits and losses (P&L), adding money to a partners pocket. A strong recommendation armed with the right narrative and accurate data will take you a long way.