Our reliance on technology is greater than ever before. Which means, for most companies (particularly large enterprises), countless software applications, from countless different vendors exist across the business. And while all these different solutions each contribute to company efficiency in their own way, managing all those vendors can create many, many headaches for those in the IT department.
This headache can be huge for some organizations. Back in July, Delta Airlines cut nearly half its software solutions – close to 600 in total – after its merger with NorthWest airlines. Although this move greatly reduced administrative burden, the company was still left with nearly 600 applications to manage.
In reality, the problem is not that big for the typical business. But, the same obstacles still exist. For example:
- Are all vendors being treated equally? Are they being asked to follow the same protocols and procedures?
- Are license allocation and tracking policies, for license compliance purposes, similar from one vendor to the next?
- How are upgrades, or the acquisitions of add-ons or additional licenses handled?
There is definitely risk involved if each vendor is not treated properly, or if there isn’t consistency in how those relationships are managed from one provider to the next. In addition to lack of software license compliance, which comes with some hefty fines and penalties, companies put themselves in jeopardy of overpaying for licenses or redundant applications they don’t need, or wasting money on “shelfware”.
The best way to avoid this problem is through the use of a comprehensive software asset management (SAM) solution. SAM enables companies to better manage not only the applications themselves, but all related contracts and other documents. This facilitates the use of formal, structured vendor management policies. So companies can ensure that provider relationships are handled in the most efficient and effective manner possible.