How a government department saved $230m in software costs over seven years

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How a government department saved $230m in software costs over seven years

This partner content was supplied by ASG Group.

Australia’s financial deficit is likely to put further pressure on already-stretched government agencies to reduce IT costs.

Some government CIOs may not have to look far to find savings. As one Australian Government department has found, a careful review of software assets can in some circumstances result in considerable savings and other benefits.

Since 2013, that department has benefited from $230 million in software savings and cost avoidance. This was achieved through a program tackling poor Software Asset Management (SAM) practises.

Like many large organisations, the department had a broad portfolio of applications, which it added to regularly. But lack of visibility over purchases and which applications were no longer needed or used had resulted in major financial exposure.

Without a clear view of how its software was deployed and if it was providing value for money, the department engaged Group 10 Consulting – the SAM arm of digital solutions and services provider ASG Group. That resulted in a review of the department’s software holdings and overhaul of its licensing arrangements.

Straining under the weight of legacy

There were three key goals for the engagement. The first was to reduce costs and increase efficiency. The second was to identify, manage and mitigate the commercial and business risks stemming from the department’s historically poor SAM practises.

The third key goal was to further improve software management practises. This included helping the department efficiently deliver software to staff members, strengthening vendor relationships and improving the value of software investments.

A review of the department’s applications portfolio revealed a number of major shortcomings in the way it had been managed.

There were minimal controls and visibility regarding the deployment and usage of software. There was little documentation and a lack of systems to support SAM work.

Large numbers of requests for software and advice were languishing in a service management queue without a formal response time specified.

These issues were costing the department millions of dollars each year. And lack of awareness around how software was licensed was putting the client at risk of non-compliance, which can result in reputational damage and millions of dollars in fines.

Unscrambling the egg

Group 10 Consulting worked with the department to help it implement an end-to-end SAM service to procure and manage its commercial software estate.

A range of software management programs and processes were put in place, including a cost savings program which has resulted in significant year-on-year savings.  

These steps resulted in the $230 million savings and cost avoidance mentioned earlier.

They also reduced the risk of software non-compliance, by giving the department better visibility of software deployments and usage.

Group 10 Consulting expects that continued modernisation of SAM tools will speed up the department’s software compliance auditing, allowing for real-time software reclamation and reallocation.

This should enable the department to forecast software license shortfalls, which may help in optimising of procurement and provisioning processes. That can help make procurement a proactive activity instead of a reactive, rushed one.

These will be important issues for all government organisations to tackle – especially those that have spent a lot adding remote working capabilites during the COVID-19 pandemic.

Learn more about this case study at the ASG Group website.

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