Last month I mentioned that I was excited by the recent announcement about HP’s launch of ITPS and that I would blog about one of my favorite Asset Manager KPIs. Let me set the context first by sharing with you a KPI that I have seen occasionally that is definitely NOT my favorite KPI: “percentage of software licenses deployed”.
I have seen this KPI in a couple of places and when I see it I am reminded "There are three kinds of lies: lies, damned lies, and statistics."
On the surface this KPI might seem to be a very reasonable one. It is simple. It pertains to an area of significant expense in IT as well as to an area with important compliance requirements. So why is this not my favorite? Because it lies. Because Software asset management is different that storage management.
As Nicolas Rousseau has pointed out many times and as any ITAM professional worth their salt knows, Software Asset Management is not just adding up the number of entitlements from a given vendor and then comparing that to the number of deployed entitlements associated with that vendor. That would be like having half my body in boiling water (212 degrees) and the other half frozen solid (-40 degrees) and then saying because my average temperature is 86 degrees, I must be comfortable.
So what is my favorite? I like what I call the Over-Under SAM KPI. This KPI is simple. Like my least favorite KPI, it pertains to an area of significant expense in IT as well as to an area with important compliance requirements, but unlike the first KPI, this one quantifies the issue so auditors and management can understand if the KPI points to a concern that is material and worth their time considering.
I like the Over-Under KPI most when it is split between two numbers. The first number is the summation of the product of each instance where compliance reconciliation shows that a given entitlement has been over purchased multiplied by the purchase price of the entitlement or license. The second number is the product of the purchase price and each instance a given entitlement has been under-purchased.
A trivial example to illustrate the point: if I have a hundred licenses purchased of Microsoft Office 2007 professional and only fifty copies installed (I am assuming a MSFT installation based license, I know there are other license models, but I want to keep this simple.). If I have purchased a hundred but only installed fifty, then I have fifty licenses too many. If I have fifty entitlements to Adobe Acrobat Professional and only twenty instances installed, then I have thirty too many. Multiply the fifty copies of Microsoft Office 2007 Pro by the purchase price of MS Office 2007 Pro and thirty by the purchase price of Adobe Acrobat and I arrive at my “Over” number when I add these two products together. Do this for all titles that I have over-purchased and I can quickly see how much money I have wasted on licenses I don’t need.
As I mentioned, to get at the “under number” do the same thing, but this time add up each product of the purchase price and the under-purchased entitlement. These two (over-under) numbers let me know (and the CIO know) if I have spent too much money or too little and how much in each direction. For the KPI purist out there, one can then take these two numbers and add them together to get a single quantified dollar value of how well a company is doing around SAM.
Besides this being a simple KPI that I can trend over time, I also like this KPI because it lets me know if my auditors are going to care about how I am doing with SAM. For example, let’s say a large multi-national had this KPI and it was $50K over and 50K under. I would interpret this to mean no one will spend their time worrying about SAM compliance. $50K for an enterprise with hundreds of million in software spend just is not material. On the other hand, perhaps this KPI (at 50K over and 50K under) was in a small business. Well, in that case, perhaps it would be material and so worth spending time on.
It is also my favorite KPI because it is real. HP Asset Manager can do it today!
So there you have it, one of my favorite ITAM KPIs. What are some of your favorite KPI’s…and more importantly why?