MYTH 7 :

Using IBM's Workload Licence Charge (WLC) pricing will give you the lowest possible IBM software costs.

Reality: It seemed the answer to a prayer when IBM first announced WLC — and certainly many saw the notion of only having to pay for the capacity when the products were running as the mainframe industry's software saviour.

Not so, says Swanson, and he has the price books to prove it.

"IBM has gone out there saying: 'We can reduce your software costs by going to WLC'," he says. "My response is: If WLC can cut your costs by, let's say $100, but there are other things out there that can cut it by $200, did you create a savings by going to WLC? Well yes, relative to where you were, but no, in that there were other options that were out there.

"Although WLC is frequently a better option than most data centres currently have, it is rarely the best option that's out there in the sense that there are other things that they can do that are even better."

[Editor's note: Swanson's company ISAM (Information Systems Asset Management) provides services for optimizing mainframe software. One trademarked service is the IBM Pricing Audit, where "ISAM studies your IBM software and invoices to determine the most advantageous pricing metrics and product bundling options to minimize cost and maximize overall value".

MYTH 8 :

Best-in-class companies save the most money.

Reality: Many CIOs dream of following in the footsteps of the individual or company that boasts of the millions of dollars they have beaten out of the software vendors, thinking large savings equals best-in-class. The irony is that if those companies were truly best-in-class, there would not be large amounts of money to be saved, Swanson says.

"We don't view the most improved athlete as the best, yet we think of the most improved SAM manager (as measured by software savings) as the best. If you want to become a world class athlete, you don't emulate the most improved athlete, but rather set your sights on the best athlete. Once you reach elite status, it becomes more difficult to obtain that incremental improvement. The reality is that in benchmarking hundreds of companies, most best-in-class companies are rarely seen or heard of in SAM circles," Swanson says.

So when companies stand up and talk about all the money they have saved in the past year, Swanson takes that as a measure of how badly they were managing before. And, as he says, if any organization is that bad, why should anyone listen to them? "I want to hear stories from somebody who says: 'There's nothing left to save'," he says.

As Swanson points out, it is often the quiet SAM manager, unrecognized by management, who is doing the best job controlling software costs.

CREATE A ROAD MAP

The moral of the story is that while there might be a proper role for software asset management, traditional SAM methods are no panacea, Swanson says, and to dispel the eight myths is to prove it.

To achieve best-in-class status, SAM managers need to understand the software asset management landscape and the mainframe and distributed environments then create a road map.

"Until you know where you're going, any road will get you there," Swanson says. "And how do you know where you're going, if you don't know how good best-of-class is? What I say is first find out how good is good, and then find out why they're that much better than you, and in what areas they are better than you, and then create a road map to get there.

"In creating the road map, assess your situation. Benchmark, build a plan of attack, execute and then measure and repeat it. Just because you did well a year ago means nothing today. You can't sit on your laurels. You have to constantly be going back, and you have to take a phased approach on this. Don't try to do it all at one time. Look at what can be done in the immediate terms, medium and then long term, and then try to tackle them one step at a time.

"When I came up with the eight myths, some of them are specifically directed at various institutions out there that are promoting a specific idea to gain revenue and I think a plan of action helps."

You should ask yourself whether it is enough to simply reduce costs or run at the lowest possible cost. But having the technical knowledge isn't enough, Swanson says. And there, he says, is the rub: most people are simply not aware of the savings waiting to be realized.