Software Asset Management Presentation

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Software Asset Management Presentation
Graham Smith Wolverhampton City Council
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Introduction

• Graham Smith Production Services Wolverhampton
  City Council.
• Andy Gallagher Managing Consultant Compass
  Management Consulting Limited.

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Background

• Partnered with Compass since 1997 as part of WCC
  benchmarking for best value.
• Several benchmarking reviews matching WCC against
  best practice within the industry.
• The area of challenge has covered Costs, Quality,
  Performance and Productivity etc.
• The most prominent challenge identified in
  September 2002 concerned Software.
• The challenge identified a potential of 170,000
  of savings for mainframe software.
• To address this challenge WCC required a
  co-ordinated software asset management strategy.

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Objectives

• There were 4 main objectives
• To reduce the cost of the operational software
  portfolio through a structured process of product
  elimination, product displacement and supplier
  negotiation.
• To maintain current service delivery quality
  levels.
• To ensure WCC has a software portfolio based on a
  defined set of needs and which is fulfilled by a
  smaller number of strategic vendors with whom WCC
  can establish appropriate relationships.
• To define a rigorous governance process to ensure
  this situation is not repeated in the future.

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Deliverables

• A streamlined software portfolio based on a
  defined set of needs and backed by business
  cases, which can be challenged at any time.
• A consolidated software license repository to
  ensure WCC are at all times aware of their
  obligations and can quantify any opportunities
  for further cost reductions.
• A reduced cost for mainframe operational
  software.
• A defined governance process for Software Asset
  Management.

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Approach

• The agreed approach was based on a phased program
  to achieve the defined objectives and
  deliverables.
• Timescales were set out to coincide with other
  activities.
• A team with the relevant skills was set up.
• Briefings to the team were held so all parties
  understood their responsibilities.
• Milestone dates were set up to control and manage
  progress.

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PHASE 1 Immediate vendor issues.

• A major vendor contract was due to expire Jan03
  and they were attempting to impose a significant
  price increase.
• By engaging in negotiation at the right level and
  with some hard bargaining WCC was able to remove
  the price increase and add value to the new
  agreement.
• This displaced another vendor.
• The new agreement included a substitute clause
  option allowing for replacement of products to
  support changes to services brought about in a
  later phase of the project.
• It improved significantly the vendor
  relationship.

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PHASE 2 License information consolidation exercise

• Here we built a complete spreadsheet (covering
  commercial, technical and contractual
  information) for all software allowing WCC to
  determine the category a service fell in to.
• CATEGORY A services to be discontinued.
• CATEGORY B services where duplication exists.
• CATEGORY C services progressing to phase 3 where
  they will be challenged further.

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PHASE 3 Review of portfolio.

• Here WCC commenced a structured review to
  identify the current and ongoing requirements
  that will constitute the final solution to meet
  our business needs.

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PHASE 4 Tender specification.

• Preparation of the requirements specification
  document distributed to an agreed list of
  suppliers, as well as being advertised in the EU
  journal.
• Considerable effort was built into the overall
  tender to ease our time when the evaluation was
  to take place.
• We set up a formal response matrix with a defined
  set of rules of engagement.

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PHASE 5 Evaluation and vendor negotiation.

• Comprehensive evaluation of the responses
  received.
• Producing the shortlist of vendors.
• Invitation to short listed vendors to present
  their solutions.
• Decision time, negotiate and obtain the right
  solution for the right price.

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PHASE 6 Contract governance.

• Much of the original issues identified by the
  process related to the lack of a rigorous
  governance process.
• Phase 6 will see WCC develop and implement
  governance process in line with industry leading
  practice effectively ensuring that the benefits
  realised from this process are safe-guarded and
  that the strong team working ethic displayed
  throughout the process continues.
• WCC will have achieved all the defined objectives
  both for today, and equally importantly, the
  future.

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Results

• We are now well down the line with phase 5, with
  phase 6 to do.
• We have made financial savings to date they are
  127K annually.
• We now know we have further challenges that will
  save considerable money that overlap with either
  our Unix or Intel platforms. The estimated value
  of this is 96K annually.
• The exercise ensured a transfer of skills to WCC
• The morale of the Team was greatly enhanced.
• I can not speak highly enough of the contribution
  made by Compass, where throughout, WCC received
  advice and guidance of the highest order

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Moral Of The Story

• This is not a specific mainframe problem, it can
  and will be repeated at WCC for UNIX and INTEL
  platforms.
• You need to be committed to do it, ensure you
  engage the right resources and you will receive a
  pay back.
• As the IT industry continues to grow, IT managers
  come under greater pressure to deliver. The
  question often is where is the money coming from.

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• Word of warning, when the savings come in you can
  you can only spend them once.
• The challenge to all of you is look to your own
  businesses you can save money and resources by
  rigorously applying demand challenge exercise.

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Questions