A new management tool helps companies transparently manage vital software inventories, so that they have the capacity they need - but no more.

Where would we be without software? One of the greatest productivity enablers of the age, computer operating systems and software applications programs have been the ubiquitous servants of the global exploration and production industry since the early 1980s. The more expensive applications are usually licensed from the vendor, with companies purchasing a certain number of "seats" based upon their anticipated needs. But surprisingly, companies who can tell within the smallest entity exactly what's in their yard or warehouse pay little attention to asset management principles when it comes to software.

According to an independent survey conducted by the Gartner Group, as much as 60% of companies' software inventory is underutilized. Conversely, because usage is not being managed, some employees cannot access the software they need when they need it, to the point that it impairs efficient workflow processes. Over the past few years, increasing awareness of program bottlenecks or excesses has spurred implementation of corporate information technology (IT) management programs in many companies. But counting licenses is only the tip of the iceberg. Systematic utilization oversight is the only way to optimize inventories to match the workflow, eliminate bottlenecks and identify excesses. One Fortune 500 oil company that installed IT system measurement software was able to analyze resource usage and immediately reduce the cost of inefficiency and overcapacity in its licensing of database software by at least 30%, simply by matching software purchases with actual needs.

Dozens of uses

So what can you do with an IT management system? As mentioned, finding and eliminating overcapacity can pay big dividends, but that is just the beginning. Many companies are discovering innovative ways to improve the value of their IT assets, for example:

o Implementing global time-share so employees based in widely diverse time zones can share the same licenses without affecting their work process efficiency.

o Establishing a base inventory of licensed software programs to cover day-to-day workflows augmented by temporary licenses from application service providers (ASPs) to cover cyclic demand peaks or a straight lease from the vendor for a shorter period of time.
o Eliminating costly "bells and whistles" from IT system purchases that cannot be justified by workflow needs.
o Evaluating individual user competence to indicate the need for training and developing "best practices" that ensure programs are being used in ways that derive maximum value.
o Creating flexible licensing and service agreements with vendors, based on facts, not estimates.
o Optimizing operations by exposing the causes of system shutdowns or overloads.
o Reclaiming system capacity by eliminating programs and data that are obsolete, redundant or no longer required.
o Providing support for billing of IT services to clients or for pro-rating IT services that are charged to a specific project - creating an effective IT cost accounting system.

An innovative solution that addresses all of the above applications is offered by Open iT, an independent software and IT services organization, founded in Norway with subsidiaries and resellers worldwide. The company uses its considerable experience to help its clients derive maximum value from their IT assets by application of customized solutions consisting of consulting, training, and specific software monitoring, metering and analysis modules.

Among the Web-based programs provided by Open iT are three analysis modules: License Analyzer, System Analyzer and Storage Analyzer. As their names imply, these programs monitor and measure software licenses, servers and data storage based on usage analysis. The analysis may be based on systems or discrete components, individual and program usage patterns and user competency and proficiency for individual programs or systems. Additionally, a database reporter provides a centralized overview of database usage, trends and performance. It also supports cost-accounting programs for accurately allocating database usage to cost centers. Another module, AvailReporter, measures the availability of services and documents service level agreement performance for both users and serviced suppliers. The LicenseOptimizer program monitors activity levels for installed applications to free up unused licenses for active users on high priority projects delivering targeted license management.

To derive maximum benefit from client systems, the company's recorder program helps improve individual work performance and efficiency. Using the program to analyze individual keyboarding patterns, employees can be protected from computer related strain and injury. Finally, the program is helpful in evaluating the usability of software before purchase.

All of the programs feature customizable, intuitive graphics and detailed reporting functions. Open iT software runs across platforms, collecting and integrating data from Unix, Linux and Windows systems, and reports can be accessed by any Web browser, including those on hand-held PDAs. To maintain security and objectivity, access to reports can be limited according to the client's requirements and all data are encrypted. The big advantage of this is that it can resolve conflicts between users and vendors regarding active licenses or usage time - of particular value when license charges are usage-based.

Field experience proves the point

The Open iT programs are not industry-specific, they work for any company that licenses or purchases software operating systems or applications programs. Programs are available individually, or bundled into a specific application package. Earlier, it was reported how a Fortune 500 company reduced its database costs by 30%. This was accomplished through the use of the LicenseAnalyzer program. Faced with the requirement to implement a cost management solution for its IT resources, another Fortune 500 company wanted a tool to report on software usage so they could maximize the real value of their software investments. Choosing four key applications to monitor, company managers looked at core programs in use throughout the organization as well as function-specific programs used by specific departments. The objective was to determine how many licenses were needed each year as well as to determine when to augment capacity during activity peaks using ASPs. Plans for new purchases were tuned by matching them with individual workflow processes rather than headcount, as had been done in the past. With the metering system in place, management could easily see which applications failed to meet the license level threshold, thereby wasting money, as well as those where demand exceeded capacity, thus creating costly roadblocks.

Companies with many employees like the efficiency and objectivity of an automated monitoring and analysis system. One of the world's largest integrated energy companies with more than 40,000 employees worldwide and 1,700 high-end software users in 40 countries needed to align its IT investments to coincide with business strategies and initiatives. Within a few months, enterprise-wide monitoring revealed opportunities to streamline usage and licensing that resulted in savings greater than 10 times the cost of the LicenseAnalyzer. "Previously, key technical personnel were required to divert from their core activities to gather important usage data on spreadsheets," explained the company's application portfolio manager. With automatic monitoring and easy to understand reports, responsible managers can manage the IT system unobtrusively and highly effectively.

Norwegian giant, Statoil, has used the LicenseAnalyzer program most effectively to purge obsolete or underutilized licenses and maintenance agreements. They have also learned how to focus user support by analyzing patterns to identify training needs. "Being able to see how different departments and disciplines use software better enables the transfer of information and experience between these groups and makes it clear where software usage is inadequate," said Statoil's Terje Flaten.

Who benefits?

Intuitively, one might conclude that only companies with large software inventories could benefit from an active IT management system. In fact, experience has shown that companies implementing a rigorous IT management system routinely see a tenfold return on investment. And for companies wishing to test the water before taking the plunge, highly performant systems are available for lease, so users can prove the value to themselves before investing in a license.

Characteristics of a good system

For maximum effectiveness, an IT management system must be easy to use, platform independent and transparent to the user. Like the famous "Black Box" that records flight data, a management program must measure all significant information that characterizes how software is being used, how it is manipulated by the user and how it is being accessed across the enterprise. It should be able to discriminate between active and inactive use to detect "license hogging" - that is employees who check out an application, but leave it sitting on their desktop without using it. A good system can automatically detect these and make them available to other users based on the company's business rules governing workflow processes. Above all, it must be flexible to be able to serve the needs of diverse groups with disparate licensing agreements in force from multiple terminal or license servers. It must be able to perform comprehensive usage metering, monitoring not only usage, but storage, CPU, disk, keyboard and mouse activity. Reports must support and integrate well with the company's business processes and be easy to combine with information from its HR databases - so periodic reports from departments, business units, cost centers and projects can be retrieved without having to update them manually. Integration with additional analytical and business tools such as Microsoft Excel is a must. Finally, a good system must go beyond metering, it must be able to acquire and organize statistics and convert them to actionable information in an easy-to-use format that helps busy executives optimize their IT investment.

SIDEBAR:

Increasing usage while cutting costs

Dan Shearer, Manager of Technology Enhancement at Burlington Resources, says his company has a four year track record of expanding software usage while cutting general and administrative (G&A) costs. According to Shearer, "Within the first two years, our license analysis showed us how to modify existing agreements that subsequently saved the company US $6 million," he said. "The first year, we reduced our G&A software expenses for high-end users by 36%, the second year by an additional 21%"

Shearer explained that besides cost savings, the company is able to improve user efficiency by ensuring they get the software tools they need when they need them.

Also considered are important, but infrequently used, programs. In these cases, the company budgets for highly skilled consultants to provide training and mentoring, even to the point of running the software under the direction of a geoscientist. "We want our specialists to be able to focus on their geoscience work, not become button-pushers," Shearer said.

"It's a huge interdependent matrix," Shearer explained. "Our license analysis enables us to know in both long- and short-term, what software we have, what we have to replace, and what is growing in usage and functionality. Then we tie it all together with our shared earth model architecture to ensure it will integrate efficiently and allow us to share and transfer data within the company," he concluded.

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