It is with deep regret that I have experienced too many organisations who place the negotiation of software contracts in the hands of pure procurement specialists. I have no doubt if a deal was required to drive down costs on energy or real estate then these good folks would put the providers to task and save their companies a sizeable amount of money.
Yet software is a different beast, and one that requires support from the SAM team.
To ensure that procurement is well provided for in terms of intelligence around making a contract purchase/ renewal decision, the following questions should be considered:
- What software is currently in place?
- Will the software currently in place be reaching “end of life” status during the new/renewed contract?
- What software needs to be in place moving forward?
- What licensing terms and conditions have changed since the last contract was signed?
- Have we considered any impending major platform changes that could influence licence calculations?
- What 3rd level metrics * are required to be gathered to calculate licence consumption/ spend?
- What value are we getting from the support and maintenance we provide?
- Do we have opportunities to consolidate contracts with a view to forcing economies of scale in any future deals?
- What additional terms and conditions do we wish to apply to any contract that might be signed?
* A 3rd level metric is typically consumption data that acts as a multiplication factor in any licence calculation and is set by the software vendor for the client to recover and report upon
Generating such data is not beyond the wit of SAM, but lead times need to be considered in ensuring that these reports are of the right quality to guide procurement with appropriate business intelligence.
To ensure that data flows from Governance right through to the end of the SAM operational lifecycle, SAM Charter have created a Template SAM Eco-System which should enable Procurement Teams to plug into a stable and well-run SAM framework that can provide the information above, which is available (for free) from our White papers page.
But this is a SAM view of procurement! I would be interested to hear of the issues you might experience in dealing with your own SAM team, and what perhaps, they aren’t helping you out with.