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data standards that OMB can adopt and adapt. Officials also will find it helpful to add government-specific data fields to elicit information for rationalizing utilization, aggregating spending and consolidating duplicative contracts.
Once the inventory data reveals government’s largest providers and the usage patterns for their software, OMB or governmentwide category teams can negotiate separately with each of the biggest suppliers. That will allow negotiators to use market and supplier analysis to discover the pric- ing, terms and conditions appropriate to each company’s specific licensing policies and procedures.
License and deployment data also can reveal how much software spend- ing passes through resellers rather than directly to original equipment manufac- turers. The Enterprise Software Cat- egory Team (ESCT) — led by OMB, the General Services Administration and the Defense Department — will be able to use that data to explore the nature and cost of reseller arrangements.
The information will enable the ESCT to recommend best practices in gauging the value resellers should add, and whether the margins they charge and the services they provide are in line with industry standards and the government’s huge demand.
Armed with that information, the gov- ernment will be well placed to negotiate reseller margins, for example, and could explore ways to gain pricing advantage by incentivizing deals between software makers and resellers.
Software inventories also can sup- port a host of information-gathering efforts to help the government man- age the demand for software licenses and relationships with suppliers. Spe- cifically, the data will enable OMB and the ESCT to:
• Identify which products are most often deployed but not used.
• Discover the percentage of unsup- ported versions of software still in use. • Reveal the amount of spending by agency and governmentwide on vari- ous types of software — desktop, database, applications, middleware and infrastructure, for example.
• Determine the value of surplus and unused software licenses per vendor, as well as which agencies have the larg- est excess inventories.
• Save money by better match- ing licenses to the needs they were deployed to meet.
• Purge or sell unused licenses or rede- ploy them elsewhere.
With inventory data, agencies and the ESCT will learn how many soft- ware assets are going unused. That information could support a govern- mentwide software license exchange for transferring surplus software among agencies.
The ability to move licenses from one part of government to another to avoid needlessly buying more can be a huge benefit of category management. Achieving it requires that inventory data be entirely accurate. The right to reallocate licenses and share all infor- mation about them also must be built into contracts with software suppliers.
Reusing licenses can produce con- siderable savings. We have seen a reuse program for a single brand of software produce annual savings of $5.8 million in a public-sector organization with a $150 million budget.
Similar or greater savings on a sin- gle software brand multiplied across all agencies could quickly add up to a sizable amount to reinvest in mis- sion-critical programs. Imagine the annual savings from governmentwide reuse of all brands of commonly used software.
With a governmentwide software exchange, agencies with surplus licens- es could reduce costs by transferring
those licenses to other agencies, which could, in turn, reduce their spending on new licenses. An exchange could also act as a check on software spending if agencies were required to look for spare licenses before they could buy new ones.
Standardizing inventory data will also help maintain software security hygiene. With a standardized govern- mentwide database, for example, the ESCT or its nominee could identify all the government owners of a software version with a newly discovered vul- nerability and alert them to make the appropriate fix or install a patch.
Similarly, the ESCT could home in on versions of software that need imminent upgrades or are no longer supported by their manufacturers and remind the agencies with those licens- es to take action.
In addition, the inventory database could serve as an idea-sharing platform for cost-saving and efficiency improve- ments, such as introducing open- source software as licenses expire.
Both the software inventory data- base and the exchange would assist in aggregating software requirements to create the conditions for agency-level and governmentwide enterprise licens- ing. Over time, that approach should help eliminate or consolidate duplica- tive contracts and assist in identifying and promoting best-in-class procure- ment vehicles. n
David Shields, former managing director of the U.K. Government Pro- curement Service, is managing direc- tor for procurement transformation and category management at ASI Gov- ernment. Tony Crawley is managing director and co-founder of indepen- dent software licensing consulting firm Synyega and former adviser to the U.K. Crown Commercial Service on software license reform.
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