SAM as a Service

I am looking to develop an in-house SAM as a Service model, with a defined service catalogue of SAM offerings which can be directly linked to recharge costs which can be calculated based on a markets size, requirements and complexity. I have spend many months on this but would really be interested in thoughts of peers to get another perspective;

What would you include/like to be included from an in-house SAM team?
How would you look to ‘bundle’ work that SAM teams do to provide a catalogue?
How would you calculate costs of these services?

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A couple of thoughts on this:

  1. I think this would make a good virtual study group. Depending on your timings it would be useful to link you up with other end users who have done this or want to explore it.

  2. A couple of approaches I’ve seen include bundling the SAM service cost into requests or other monthly service delivery. For example if someone requests software or subscription or instance a small surcharge is added for governance. So SAM service cost is added like a VAT. I have also seen orgs use the competitive market cost from a SAM services company as a benchmark, your service does not necessarily need to be cheaper, but it’s a good comparison.

I look forward to reading what other SAM pros have done in this area.

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We’re building that but with SAM tools. The way we see it, the closest association would be to AWS/Azure. In the sense that you activate whatever services/products you want to use and pay either a monthly subscription or based on a consumption model (e.g., number of databases analyzed).

I don’t see why this would not work with services, would be very interested to hear more on how you define the model.

Happy to share my ideas with others to provide input in a workshop.
Here are some other mandates to make my life more interesting!

  • It cannot be linked to licenses or annual spend and this information may not even be available when I need to ‘quote’ for the work

  • It cannot be FTE based, although from the charge I need to calculate how many FTE I need

  • It cannot make a profit or loss

  • It must be an annual service charge that I can calculate up front based on x,y,z and then half yearly or annual adjust the charge and predict what that means in terms of impact on FTE

JuliaV,

Likely too early for a tool for cost recovery though Apptio comes to mind during a past PoC I explored with them. I have a book from them, TBM or Technology Business Management. Might contain some ideas to help get you launched. I’ll be on the sidelines to see where this goes, providing the customer levers to engage your services helps optimize SAM, no one likes fees unless there is benefit tied to it. This makes a direct linkage for them

I agree with Martin on this. The most common approach has been to include all IT sanctioned licensing cost in the annual IT budget and recover the cost in a Technology Fee (typically based on HR headcounts). It’s a crude method but it works.

Unfortunately that approach (Spread the cost to everyone) does not touch shadow IT cost and artificially eviscerates the need for audit and accountability and optimization. That’s the nut of the issue. If you are charged with reducing licensing expense and eliminating shadow. You need to have a provisioning team dedicated to the function and the tools to keep licensing tight and drive the data that manages the chargeback and can also leverage the vendors. I call those functions and surrounding processes an Ecosystem. This is the best way to get way from the bad habit that may permeate the enterprise.

I suppose there are ways to bundle licenses in a chargeback model but depending on the size of the portfolio that can be very challenging to figure out on a monthly basis. But by the same token, detailing individual license counts/cost in every Cost Center’s P&L is also very challenging as it will raise all sort of questions by those managers who want to nit pick.

The better approach would be to let the unit price float since the actual license cost will be static. You could divide monthly cost by the number of active users and spread the cost to that community. You need SAM tools do that accurately obviously. But I would roll the aggregate up to a single Software Licensing Fee and add a surcharge to cover any gap and team cost necessary to support the operation.

You are on the right path to be sure. This is where my expertise as a consultant lies. It has largely been in telecoms but the same rules and paradigm applies. You have to streamline processes to eliminate Shadow and over-subscribing to reduce cost. Centralization of function and development of expertise in contracting and cost are essential.

Hi All, l like the sound of creating a SAM as a Service model. Within my organisation we don’t recharge, but i’m looking at reporting to each Department Head the cost of their teams SAM, highlighting risks and discussing future demands etc. If i’m reading this thread correctly the solution to the above could also help me!
So i’d be interested to see how this progress’s.

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Martin i love the concept that SAM service costs are like a VAT…should we have a new acronym VAS (Value added SAM) :slight_smile:

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NO NO NO…NO MORE ACRONYMS!!! LOL
ITAM
ITSM
SAM
MDM
MDU
MMS
MSP
PMS
SaaSM
SAM
TEM
ITOM
WEM
EMS
NMS
SAMO
DCIM
RMM
CMMS
ITFM
MEDR
EDR
CCMO

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@JuliaV, we may be in a similar situation because I am at a higher ed institution and operate under some of the same constraints you mentioned, though not all. Establishing different service levels, with some being cost recovered, is a work in progress for us. We’ve talked about having both product-based and department-based recharge models.

For example, at the product level, our SAM team manages software products at a certain threshold that can be considered “common good” to the organization; that is, software titles that are used broadly across the organization. We also manage additional uncommon but strategically significant products (these are not necessarily at the same cost threshold).

Our baseline services for such “common good” products would be: Vendor management; procurement (with SAM owning the budget for the software product); contract management; managing access to and distribution of the software; product lifecycle management; and reporting to leadership (which includes justifying the software and recommendations on changes to the contract & product levels/mix).

A lower service level is “purchase consolidation”, where SAM is used as an intermediary to consolidate the purchase on behalf of various departments. This is used for products that are not universally used, and not strategically significant to the entire organization. In that case SAM’s services are very similar to the above, with the exception of the lifecycle management and reporting features, and SAM does not hold the budget for the product. SAM also does not determine who is allowed to access the software, because that is determined by the department stakeholders/funders. SAM does provide some level of access to our SAM enterprise tool for self-service: Departmental IT can run their own usage reports, and we provide basic training for the tool.

We also have a cost recovery model, where SAM provides value by purchasing at large quantities and then centrally recharging for each individual license. SAM absorbs the risks of the purchase levels and has more flexibility to determine product levels. Services for cost recovery products are: Vendor management; procurement (with SAM owning the budget); contract management; managing access to and distribution of the software; and limited product lifecycle management. Limited reporting, and access to the product is controlled by which individuals pay. The costs of the administration, charging for, and distributing the product are wrapped into the rate that we internally charge for a software license. Of course, we must have a proper threshold and expected revenue before we take on the cost recovery model.

But there are some products that are not as commonly used, not strategically significant, where the people who use the product realize they could use SAM resources to better manage the product. With our limited capacity, we can’t engage deeply in every product, but if a department or consortium of departments sees value to them where they would pay us to bump the service level up from the “purchase consolidation” to “common good” service level. It may also involve direct management/reporting of the products via the SAM enterprise tool - basically a higher level of support there. That is where we have not fully fleshed out what the cost model might be.

Also for the cost recovery model, we have a straightforward way of calculating the costs and determining the recharge rate, but so far that hasn’t been used by departments themselves, as it increases the per-license cost significantly and is only really cost effective with a very large internal customer base.

Interesting, ours cannot be linked to software, but I like the idea of baseline services for ‘common good’. I have been creating a catalogue of services which are linked to our processes and tooling and provide a standardised approach to SAM as a Service. At the moment we use an ‘fte’ model but I need to move to a service model and your comments on cost thresholds are food for thought. We have always tried to work very flexibly but it is clear we need to balance agile/flexible with tickets/demand tracking in order to determine recharge costs, but also demonstrate value.

We also use your cost recovery model and it works very well.

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