Turning a Software Audit into a Positive
Experience
Making Lemonade:
Boeing
Lawrence KaneSenior Leader, IT Infrastructure Strategy & Sourcing
Alsbridge
Jeff SeabloomManaging Director
www.sig.org/eval
How to Make Lemonade: Turning a Software Audit
into a Positive Experience
Lawrence Kane, Boeing
Jeff Seabloom, Alsbridge
© 2015 Alsbridge Proprietary & Confidential
3
Agenda
Why software audits are becoming more common
Triggers and red flags vendors use to identify audit targets
Software audit vulnerability and risk factors
Keys to an effective asset management* and audit response strategy
Benefits of asset management – whether or not you’re audited
Conclusion/Takeaways
* “Asset Management” here refers to software and to people, tools, processes and practices
© 2015 Alsbridge Proprietary & Confidential
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About Boeing
The world’s leading aerospace company
Provides products and support services to customers
in 150 countries
Designs and manufactures commercial and military
aircraft, rotorcraft, electronic and defense systems,
missiles, satellites, launch vehicles, and advanced
information and communication systems
Headquartered in Chicago, Boeing employs
more than 170,000 people across the
United States and in 70 countries
More than 140,000 of our people hold college
degrees, including nearly 35,000 advanced degrees,
in virtually every business and technical field
© 2015 Alsbridge Proprietary & Confidential
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The Alsbridge Difference
Pragmatic focus on expense reduction, not general management consulting
Independent—Alsbridge does not offer operation of services we source
“No divorce” track record for all agreements we have advised upon
Data-driven decisions using the industry’s most complete database
Engagements address over $5 billion in annual market spend
Chosen to World’s Best Outsourcing Advisors list by IAOP for past five years
More than 200 professionals with an average of 20 years industry experience
The Right People
Largest Provider Data
Integrated Services
PLAN
Transformation
Sourcing
Strategy
EXECUTE
Change
Management
Selection &
Negotiation
GOVERN
Vendor
Management
IT Asset
Management
ASSESS
BenchmarksOpportunity
Assessments
COST
REDUCTION
RISK
MITIGATION
BUSINESS
ENABLEMENT
© 2015 Alsbridge Proprietary & Confidential
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About the presenters
Lawrence Kane is responsible for IT Infrastructure Strategy, Sourcing,
and Asset Management execution at Boeing. He recently completed a
multi-year assignment to improve IT SW Asset Management capabilities
at Boeing. In addition, established the sourcing office, hired and
developed a high-performance team and saved more than $2.1B by
architecting the IT infrastructure sourcing strategy, designing the
proposal evaluation process, executing RFPs, negotiating with
providers and benchmarking the effectiveness of resultant deals. He is
also the best-selling author of a dozen books.
Alsbridge Managing Director Jeff Seabloom has over 36 years of
executive experience as an executive, entrepreneur and advisor
across various industries. His areas of expertise include ERP
systems and supply chain integration, business intelligence,
optimization, analytics and mobility. Jeff has a deep understanding of
global markets, both direct and indirect models for sales and
services. Jeff has held numerous executive positions including
Oracle, i2 and HP. He is active on several Boards and a Board
Partner for Pathena, a European Investment Fund.
© 2015 Alsbridge Proprietary & Confidential
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Software audits are becoming more common
Source: Express Metrics
© 2015 Alsbridge Proprietary & Confidential
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Software audits are becoming more common
Source: Express Metrics
© 2015 Alsbridge Proprietary & Confidential
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Red flags vendors use to identify audit targets*
Involvement in a merger/acquisition/divestiture
Virtualization and Cloud/IaaS/PaaS deployment
Organizational growth – without additional software purchase
Attrition of licensing expertise
Uncertainty regarding licensing position
* Source: Information Week 9/14
© 2015 Alsbridge Proprietary & Confidential
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Software audit vulnerability and risk factors
Lack of asset management governance structure and skilled people to run it
Sourcing, procurement and asset management functions don’t communicate
Discovery tool limitations
Pirating/hacking/cracking
Secure environments that preclude visibility (e.g., gov’t contractors)
Independent groups that work in isolation
Disgruntled employees who blow the whistle – Business Software Alliance
Illegal copies – users sloppy or don’t care
Change of supplier account teams
Lack of a CMDB
Bottom line: enterprises are at risk and preparedness is imperative
© 2015 Alsbridge Proprietary & Confidential
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Processes
Implement process discipline that proactively
prevents escapes
Ensure software is purchased through right
channels
Integrate sourcing, procurement and asset
management functions
• Define governance strategy
• Optimize organization and operating structure
Develop a focused sourcing strategy
• Use every event to get better
• Define what to do in-house vs. what to buy
Keys to an effective asset management
and audit response strategy
© 2015 Alsbridge Proprietary & Confidential
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Keys to an effective asset management
and audit response strategy
Tools
Acquire and deploy robust tools that fit infrastructure
• No one-size-fits-all answer
• Consider size, scope, complexity, and risk
Tool requirements
• Discovery
• Definitive media library
• Entitlement and compliance reporting
Consider phased tool deployment and data on-boarding
• Assure data quality
• Process control assessments
• Continuous improvement
© 2015 Alsbridge Proprietary & Confidential
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Keys to an effective asset management
and audit response strategyPeople
Assign the right people
• Core team with responsibility, accountability and authority to implement SW asset management
• Assure knowledge, skill, ability and interest
• Specialists are expensive, outsource as necessary to augment
Focus on stakeholder education
• Communicate importance, process, and accountability
• Provide specialized training to “admin rights” users
• Don’t forget suppliers/contractors
• Millennials may need focused training
© 2015 Alsbridge Proprietary & Confidential
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True-up by audit Manual record-keeping and
true ups
Limited IT uCMDB with
discovery tools in place
IT uCMDB with robust
discovery and tracking tools
Robust enterprise uCMDB
with advanced analytics
Few people responsible;
limited organization
Asset Mgrs assigned,
coordinated efforts
Asset Mgrs and Product Mgrs
assigned, coordinated efforts
Strong coordination; managed
virtual organization
Structured enterprise-wide
organization w/ dedicated staff
No rigorous compliance
process
Compliance based on
representative sample
Compliance with asset needs
known; forecasting limited
Compliance with asset needs
forecasting and optimization
Proactive compliance and
utilization
1
2
3
4
5
AppliedIT Today: Basic capabilities,
pockets of excellence, few
processes, tools, and
standards
ExploredNo sustained
capabilities
AdoptedIT Competency: Department
standards, basic processes,
basic integration, utility oriented
ManagedIT Proficiency: Standard
processes, cross-
organizational integration,
measured impact, service
oriented
AgileBeyond IT: supporting
The company as a
competitive advantage:
Integrated enterprise
capabilities, committed
audit and
improvement, business
oriented
Va
lue
Re
ce
ive
d
Capability
Inve
stm
en
t to
Im
ple
me
nt
Industry Maturity
Model
18 – 24 months 18 – 24 months
1 2 3 4 5
18 – 24 months 18 – 24 months
© 2015 Alsbridge Proprietary & Confidential
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Benefits of asset management –
whether or not you’re audited
Reduced audit risk – and more effective response to audits
Identify opportunities to utilize licenses more effectively
Reduced software costs through harvesting and redeployment
Knowledge and data to negotiate more favorable contracts
Align software roadmaps with sourcing strategy and technical
architecture
Define asset management sourcing priorities – what to keep,
what to let go
© 2015 Alsbridge Proprietary & Confidential
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Lessons Learned/Takeaways
A software audit is a significant risk that needs to be
taken seriously
Effective asset management enhances the ability to
effectively respond to a software audit
Asset management delivers a wide range of operational
benefits
© 2015 Alsbridge Proprietary & Confidential
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Thank you!Lawrence Kane
Senior Leader
ITI Strategy, Sourcing, & Asset Mgmt.
The Boeing Company
Phone: (425) 865-7516
E-Mail: [email protected]
Jeff Seabloom
Managing Director
Alsbridge
Phone: (612) 940 9770
E-Mail: [email protected]
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Workshop # 3
Making Lemonade: Turning a Software Audit into a Positive
Experience
Speakers:
www.sig.org/eval
Lawrence KaneThe Boeing Company(425) [email protected]
Jeff SeabloomAlsbridge(612) 940 9770 [email protected]