In my last update on the growing Technology Gap that exists in many firms, I wrote about the benefits of developing a Strategic Technology Plan.
This is, I believe, one of the best ways to identify your technology needs and build consensus on the required actions and timing for their implementation. Identifying the gaps in your suite of applications, and explaining the vulnerabilities these gaps create, should provide sufficient motivation to allocate some funding towards mitigating these concerns.
But it is not the only way to proceed. Another approach is to conduct a software audit, which should really be done on a regular and scheduled basis.
The focus here is to review all software deployed across your business unit – this includes home-grown applications, locally-developed and user-managed applications, purchased software, licensed software, software subscriptions, market data feeds, and so on – with a goal to determine specific facts about each application.
The most common features to investigate would be:
Copywrite/License review: Do you have sufficient licenses for the number of users? Are your usage patterns compliant with the contractual obligations? Have you exceeded the number of portfolios, accounts, users, file downloads or any other attributes that have limits defined in the contract? Are license fees fully paid up?
Version review – are you running the most current version of the software? If not, your users may be missing out on new and better features in later versions. Also, if the environment is vendor-managed, the vendor may refuse to provide maintenance and support if your software is too many versions behind the current one. In some cases, software that is too many versions behind the current one may stop working and you may have to deal with urgent release implementations before the system will function.
Usage review – how many users log into each system each day, or each week? Are you paying for licenses that nobody uses? Could you release some licenses and reduce cost? Could you switch to a maximum number of concurrent users rather than individual named licenses – for example, if you have 100 users for an application, but never more than 40 at one time, see if you can switch to a 50-user limit and save some licensing costs. Not all vendors allow this, but it is worth looking into. Are there users who log in only once a month? Are they requesting a report that someone else could run for them? Reducing the user count can decrease operating cost. If yours is a large firm, with multiple divisions or lines of business, check with your Procurement team to see if other teams are using the same applications. On the next contract renewal, you may be able to consolidate services and reduce cost by doing so.
You might conduct this usage review yourself, with help from your IT group, or, you might be able to have your Internal Audit team support the exercise, which will add some weight to the resulting recommendations as they are supported by Audit. And if you engage your external auditors to support this process, their perspective may help you to win additional support for what you propose.
The results of this exercise should allow you to develop a plan to align your technology usage with your business requirements and stop paying for services you do not need; to find ways to bring down costs by consolidating contracts within the organization and dropping excess licenses; schedule version upgrades to maintain currency; and make recommendations about applications needing replacement due to inadequate functionality.
At the very least, you will be making improvements across your technology environment, but this analysis should also back up your strategic plan and help to build support for proceeding with that plan.
Next time: collaboration with Technology Experts.
