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Guest opinion: Gerard Tilley of FAST Ltd

Are you throwing money away – the real cost of software licensing

by Gerard Tilley*

Does the colour drain from the face of your firm's IT director each time the words software compliance are mentioned?  Recent government changes have pushed the matter far higher up the agenda and now the legal repercussions of not having your software licenses completely in order are greater than ever.

But the legal implications are just the tip of the iceberg and more and more firms are recognising the financial benefits that can be gained from getting their software licensing in order. We've spent years working with law firms in fact 81 of our current members are solicitors or law firms and 30 of these are in the top 240 practices. But these days an increasing amount of our work is to help these firms optimise their investment in IT assets and avoid overspending on software licensing, rather than simply helping them 'get legal' so to speak.

So what steps do you need to take to get the cost saving ball rolling? Is it all about Software Asset Management and making sure that you're not paying for licenses you don't need? Partly, yes, and we'll come back to this topic in more detail a little later, but there are other methods that can be put into place in order to ensure that you are spending and saving wisely.

Employee productivity is a key area that can be addressed fairly easily and quickly by deploying a structured policy on what is and isn't acceptable activity on the firm's network. A study by PandaLabs recently revealed that almost 40% of internet browsing at work is personal. Personal use of the internet accounts for almost an hour of employees' time every day which, in 2005 resulted in losses over £200 billion. Add to this the fact that 21% of mail received by companies is spam and 5% of all Internet traffic is infected with malware, the average annual loss to a company can be anything up to £91,630.

The survey went on to reveal that the average annual cost of computer attacks on companies without adequate security devices has soared due to productivity loss, bandwidth consumption and time dedicated by IT staff to cleaning the network.

What most of the firms we work with seem to have in common is the fact that their email and internet usage policies are either well and truly out of date or not clear enough. Some recent work we did with Lincoln-based Sills & Betteridge has seen the firm develop controls which ensure they know that everyone is complying with the law. Its vital your staff have a clear set of boundaries of what they are permitted to do on their work network and the implications of downloading any illegal material such as music, games and pornography, but also any unlicensed software that would permit them to download such material in the first place.

The flip side to this coin is that if you don’t set limits on what you permit your staff to use the internet for at work, you will undoubtedly be hampering the performance of your network and many firms are unaware of how much is over invested in expanding their data storage simply to accommodate for personal storage of films, music and other downloadable material. Furthermore, money spent on IT security products needs to be measured – the only way to know if the investment has been money well spent is to do a full network audit to check what is still getting through.

As I referred to earlier, better Software Asset Management is fundamental to saving your firm money. Carrying out a SAM assessment in your workplace will almost always reveal that you are over investing in areas where you could be making big savings. FAST Ltd carried out a study which revealed that 41% of UK businesses admitted to wasting thousands of pounds through over-licensing. For example, you may have Microsoft Office installed on every PC in your workplace, but do all your staff use all the applications included in the package? The answer is, probably not. So you might benefit from introducing metering to monitor exactly how much you use each licensed application. This will doubtless put you in a much better position for negotiations with re-sellers when the time comes to either upgrade your existing packages or in the purchase of new software programmes.

From experience we understand that one of the key areas of concern for law firms is ensuring they're handling their software licensing projects adequately. By bringing in an external, independent body to assist with the project, you should expect to be working with an organisation that can:–

•    Proactively advise you if your circumstances change on the implication to your software licensing, specifically where Volume License agreements may need to be upgraded or downgraded
•    Assist with Software Licence Agreement negotiations to ensure that the licensing terms and conditions are well understood and the most appropriate level of contract is applied
•    Offer specialist guidance on potential savings and the key issues surrounding virtualisation licensing
•    Offer specialist advice and guidance around the complexities of licensing, including Microsoft licence agreements with regards to Select -v- Enterprise, per processor -v- Client Access Licence (CAL), device -v- user.

Being able to get this sort of advice from an independent body and not from a company associated with any particular software is obviously the best way forward as businesses regardless of sector are being led by publishers and resellers. They are, at the end of the day, there to sell software and if you can not give them accurate information on your requirements, they will not be able to meet those requirements. But if you can portray yourself as being entirely knowledgeable of what you're looking for, their job is inevitably going to be more straightforward with less potential to overlicense your software – great news for you since you come away content that you've only spent what you really needed to, with no nasty surprises later in the day.

So while many firms take compliance seriously and are open to taking advice from organisations like FAST, ironically the real cost of compliance, as perhaps you're starting to see, is far more compelling and there is a big percentage of companies out there who are yet to benefit from the savings readily available to them. The fact that their actions will also make them 100% software compliant would, I'm sure, not be lost on the legal sector.

But perhaps the biggest issue facing small to medium legal firms, is that if you're the one responsible for ensuring software compliance in the workplace, chances are you are also a fee-earner. And perhaps you’re not too sure about making key decisions without expert guidance, so its vital that you take action and enlist the expertise of someone who can help you become more educated, knowledgeable and empowered and to ensure that when you have your software purchasing hat on, your are spending with the aim of improving your businesses processes rather than simply throwing money away on software licenses.

While implementing an effective asset management strategy will initially involve some investment, organisations that do take such action will realise savings of between 5 and 35% of their IT budgets (Gartner Group). And according to Compass, for every £1 invested in software asset management processes, you will likely see a return on investment of £5-£10 – definitely not to be sniffed at.

So the message for those of us who work in the legal sector is that although the basic premise of software asset management is one of compliance there are significant cost savings that can be made. For practices large and small partners should be more than amenable to this sort of message – getting your software house in order and saving money is at the end of the day a highly attractive proposition. However there is one all too overlooked aspect to this and that is one of credibility. Making sure your licenses are in order is surely at the heart of the compliance message – after all how can you work in the law and simply ignore it through nothing more than the effort factor in getting your software house in order.

• Gerard Tilley is the managing director of FAST Limited