As the number of software solutions used by companies continues to expand rapidly, software management is becoming an indispensable part of the IT management toolkit. Many IT managers use software asset management (SAM) software to better manage all the company software and save money on software purchases. 

In this article, I will introduce you to the basic software inventory management process that covers the full range of the software lifecycle.

Software cost is not going down

The aforementioned SAM tools provide visibility into software utilization and contract management. The G2 NPS score for the SAM category is 9.4 while the average NPS on all G2 software is 8.8. This shows that most users in the SAM category highly recommend this software. This is because most companies can save money from overspending on software. 

The SWZD 2021 State of IT Survey shows that 80% of businesses expect tech spending to stay the same or increase. The top spending drivers are outdated infrastructure and increasing priority on IT-based projects. Knowing which software should be retained, retired, and purchased is critical for success. Another key factor is budgeting. One vendor’s research shows that on average, companies allocate 8.2% of revenue to the IT budget, and 29% of that IT budget is for on-premises and SaaS. 

According to the G2 Understanding the B2B Buyer report, companies also put pricing information as the most important features that B2B buyers find most helpful on online product or service review websites. These research reports above show that pricing and budgeting is software buyer’s top priority. Software pricing can be changed with different license agreements, user numbers, management costs, and so on. The problem is that most companies are still at the early stages of doing so. In my experience, companies only actively manage their software during the software purchasing stage and end of life stage.

Knowing what software you have and how much it costs

There are two software management disciplines that most companies use today. Every company needs to know both of them to effectively manage its software portfolio.

Application portfolio management (APM)—knowing what software you have: APM provides the strategic software landscape for the business. The goal is to unify on-premises and SaaS applications to eliminate redundancy and improve organization and efficiency.

This category traffic has increased by 71% since last year because more companies want to be aware of their technology stacks. APM helps users standardize technologies, rationalize use cases, and align service level agreements. They integrate with data from the applications in use to help IT managers identify an application’s value and reduce technology overlap. The tools present the landscape in a workflow or mapping model, which allows users to group technologies by use or department and visualize their entire company’s software and service stack.

Software asset management (SAM)—knowing how much your software costs: SAM is used to document and manage the software licenses used by a business. Traditionally used to track local, on-premises software licenses, many SAM tools have broadened their scope to include tracking SaaS assets as well. Companies use SAM software for a variety of reasons, including cost tracking, contract management and compliance, and license management, making them prime tools for internal asset and user access managers. 

Turning concepts into reality

General processes that you should consider when you start the implementation: 

Taking your first step into software inventory management

The companies that benefit from APM and SAM practices the most are mid-sized to large companies. According to G2 data, 77% of the companies who used SAM software are mid-sized to large companies. If you are worried about paying too much for software, it usually means that your organization already has hundreds of software licenses in place for countless users. 

Here’s the thing: don’t start by tackling every piece of software in your company. Many managers fall into this trap because their upper management is giving them the green light, so if they don’t aim big now, they are going to miss out on this opportunity. But software inventory management in mid-sized companies to enterprises is complicated. Accounting for all the software and licenses used in all the offices and in the cloud is extremely time consuming, so you need to start by looking at the top priority software by identifying the top license costs software or low ROI software. By saving money on one or two pieces of software, you can effectively implement the processes above on time. 

Once you have determined a general plan and goal, you can start by looking at tools that can help you on G2.com. APM software and SAM software are great tools to automate repetitive tasks in this process. They can auto-discover many software applications, track user adoption, alert license breaches, and so much more. 

You can now manage and optimize your organization's tech stack for free with G2 Track? Sign up today! 

Here is the expectation with implementation and ROI with these types of software. The average implementation time for SAM software is two months. The average ROI time is 15 months. These numbers show that it is easy to implement the software, but to get the full value out of the software, it might take a while since the software inventory management process can often be complex and time consuming.