It's the technology equivalent of the self-timing bread maker - you know, the one that hasn't left the back of the pantry since 1997. Or the cross-country ski machine that's become a glorified laundry rack in a corner of your spare room. We're talking about "shelfware" - software that winds up sitting in some dusty file cabinet in the IS department, never to be installed, or software that's loaded onto an employee's hard drive but never gets used.
Just how much enterprise software is actually shelfware? In a 2001 survey of 100 companies that purchased customer relationship management (CRM) suites, Boston-based AMR Research found that most were using less than half the software they had licensed. Another AMR survey of 42 companies that bought supply chain management (SCM) suites found that 85 per cent were using only one or two of the modules that they'd bought. San Jose-based Survey.com, meanwhile, found that the shelfware rate for the top 10 online analytical processing software packages averages 39 per cent - and runs as high as 62 per cent.
The price tag for enterprise software packages of this ilk can easily run into seven figures. The deals typically include hefty yearly maintenance contracts that cost upwards of 20 per cent of the initial licensing fee - and that kick in whether or not a single copy of the software has been installed. Add it up, and you could be looking at millions of dollars in wasted software and maintenance fees.
Who shoulders the blame for all of this so-called shelfware? Some rests with the IS department, some with senior business executives and some with software vendors themselves. Here are the five "sins" that turn perfectly innocent software into malevolent shelfware. And, more important, five ways to make shelfware history.
Some morning ask your IT staff this question: "Who's got copies of Microsoft Access?" If you've implemented a standard software "footprint" on every PC, the IS department should be able to give you the answer. In theory, if every PC gets Microsoft Office installed on it, then every employee should have a copy of Microsoft Access. If a standard footprint policy isn't in place, expect to hear some mumbling and stammering.
Now ask a trick question: which employees actually use their copies of Access? Chances are good that no one has a clue. And chances are even better that at least some of those Access licences - or those for some other piece of software - are going to waste.
Shelfware Buster: Roll out IT asset management software that offers software usage metering.
IT asset management software keeps track of who has what hardware and software across the enterprise. Some asset management packages go a step beyond inventory-taking and track who actually uses each software application, and how much. With that information in hand, an IS department can move software licences from one person to another (rather than buying new ones), change licensing plans, or even decide to eliminate underused software packages altogether.
Estee Lauder, for example, is testing usage metering software from Tangram (the company already uses Tangram's asset management software to track software loaded on each of the company's 4000 PCs). It's looking to get a better handle on concurrent usage of Oracle's database management server software that's part of a custom-developed application. "When we have a concurrent licence with Oracle, we take a best guess at what we think our concurrent usage is going to be," says Larry Krieb, the cosmetic company's vice president of IS. "I could cut my Oracle licensing and maintenance costs if I knew exactly what usage was."
Krieb hopes to see a 5 per cent reduction in his Oracle licensing and maintenance fees and, given the size of the company's Oracle licence, "that's a lot of cash", he says (he declined to give specific figures).
Patricia Adams, senior research analyst at Gartner (US), says software usage monitoring makes economic sense for companies that have more than 2000 PCs. Most organisations that implement software usage tools should be able to shave two to three per cent off their total software budget - and should see a return on investment within the first year, Adams says.
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