Legislators and policy experts agree eliminating waste in software license management will yield tremendous savings
Schaumburg, IL - Mar 14, 2013 - With sequester now a reality, federal agencies are scrambling to identify and eliminate wasteful federal spending. While media attention has focused almost exclusively on the partisan disagreement over where that waste resides, consensus has emerged in at least one area – software. The Federal Government buys a lot of software – and billions of dollars are likely being wasted due to poor software license management.
Illustrating that bi-partisan opinion, President Obama recently signed into law two pieces of legislation which have provisions that are aimed at reining in software costs through implementation of Software License Optimization:
- Section 937 of the National Defense Authorization Act for Fiscal Year 2013
- Section 304 & 305 of the Intelligence Authorization Act for Fiscal Year 2013
Senator Susan Collins (R-ME), working with Senate Armed Services Committee Chairman Carl Levin (D-MI) and former Ranking Member John McCain (R-AZ), drafted the Software License Optimization language in Section 937 of the National Defense Authorization Act in order to ensure that software – one of the Department of Defense's most strategic assets – is managed responsibly and fully utilized.
Chairman of the Senate Intelligence Committee, Dianne Feinstein (D-CA) and the Ranking Member Saxby Chambliss (D-GA) included Section 305 of the Intelligence Authorization Act for Fiscal Year 2013. Section 305 will eliminate the problem of unnecessary and duplicative software licenses within the Intelligence Community and, as a result, save substantial taxpayer money.
Both laws require their respective agencies to conduct a department-wide software asset inventory – an examination of current license utilization rates – and importantly, an assessment of the means by which those agencies can achieve the greatest possible economies of scale and cost savings in the procurement, use, and optimization of selected software licenses.
"It's not surprising that both parties in Congress have targeted software license spend as an opportunity for significant savings – there's a lot of hidden waste there, and no one gets hurt if you eliminate it," said Jim Ryan, Chief Operating Officer of Flexera Software, a software company specializing in Software License Optimization solutions. "Most organizations – whether governmental or private-sector – can save up to 25% or more of their software spend by implementing established software license management best practices and tools. The federal government spends about $9 billion annually on software – so savings could run into the billions."
Congressman Darrell Issa (R-CA), Chairman of the Committee on Oversight and Government Reform, also recently weighed in on the need for the federal Government to reform its software license management practices. At the February 27, 2013 Committee hearing, Time to Reform IT Acquisition: The Federal IT Acquisition Reform Act, Congressman Issa commented on the waste associated with the federal government's current software acquisition practices:
"We buy as though we are different companies and we pay different prices and actually we redundantly end up buying excess licenses, which is another factor that we know is low-hanging fruit to save money…"
Taxpayer watchdog group Citizens Against Government Waste also sees the government's failure to implement software license management best practices as an important source of waste. Its recently released " Prime Cuts 2013" – a compendium of 557 recommendations that would save taxpayers $580.6 billion in the first year and $1.8 trillion over five years, contains (on page 25) a detailed recommendation for optimizing government software license spending, which states in part:
"The federal government can save money by reducing the number of unnecessary or excessive IT software licenses, many of which are bought because the government is unable to keep track of which licenses its agencies currently own or use…The procurement and utilization of software licenses should be routinely and systematically managed through the use of software asset management (SAM) tools... These tools could be applied to government systems to ensure that chief information officers and purchasing agents are aware of existing software licenses and can document actual usage in order to make smarter purchasing decisions. In other words, SAM can prevent buying products that agencies already possess."
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