Why to report lost benefits?

An often overlooked reporting methodology in SAM is to track lost savings. Why this could be important?

  • Reporting on missed savings opportunities enables organizations to implement corrective measures and enhance efficiency.
  • Highlighting areas for improvement fosters a culture of continuous optimization within the company.
  • By pinpointing where potential savings were overlooked can help to review accountability and authority questions.
  • These insights serve as valuable feedback loops, guiding strategic decisions and resource allocation for future software asset management endeavors.
  • Could raise the level of stakeholder buy-in to gain higher authority of SAM for fostering change to optimize costs.
  • Revealing lost cost savings emphasizes the critical role of software asset managers in driving financial accountability and optimization efforts.
  • Providing detailed reports on missed savings opportunities enables informed decision-making at both tactical and strategic levels within the organization.
  • By quantifying the impact of overlooked savings, software asset managers advocate for resource allocation alignment with business objectives.
  • Their analysis serves as a catalyst for proactive measures to prevent future revenue leakage and maximize returns on software investments.

What do you think are good example for reporting lost savings?

e.g.

  1. The most obvious is to invest into SAM tool for transparency on cost savings potentials. If you only save 3% with a SAM tool in a 3 year business case from the overall software budget, how much it would be?

  2. Implement use-or-loose policy for Autodesk licenses? Do you suspect that you would save 5% to 15%, however the service owner does not like the idea? How much savings would that generate in 3 years?

3 Likes

Great post to get folks thinking on how to drive program performance. I’m a total fan of adding a metric “Lost Opportunity” alongside those achieved, in my experience helps remind your investors, i.e. leadership, what investing into ITAM looks like. Create an RoR value that includes the investment the opportunity would had required. If competing programs use similar RoR metrics will help leadership award funding more appropriately. Keep in mind there are benefits beyond just costs, like operational efficiency, risk avoidance, etc to consider.

3 Likes

Thanks for sharing that comment, Matyas. You make some valid points in there.

I agree that having data on potential savings that were overlooked could be really useful for organizations. It helps identify areas for improvement and can foster a culture of continuous optimization. Quantifying the financial impacts can also help build buy-in from stakeholders for SAM initiatives.

You asked about good examples or methods for reporting on these lost savings scenarios. A couple ideas come to mind:

  1. Benchmarking license usage vs. purchases to identify shelfware/underutilized licenses.
  2. Analyzing renewal data to see if any money was left on the table by missing out on time-limited discounts or negotiation opportunities.

Have you had any experience putting together lost savings reports or analyses? I’m curious to hear any other insights you can share on effectively communicating these kinds of opportunities to drive positive change. This seems like an area ripe for optimization if done right.

Let me know your thoughts! Always interested to learn more perspectives on SAM best practices.

1 Like

It is more common with business software. I had to reports lost benefits on engineering vendors. Most of them has uplift for global userights, which would make the licenses for 1 or 2 year more expensive, but after you moved the pools together in year 3-5 you would end up with the a cheaper overall contract (if you also implement use-or-lose policy) and have some stricter KPI’s for license availability. It is hard to sell such a project to business customers. They only care about this year budget :smiley:

1 Like