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Research shows council waste on software licences

04/02/15

Portsmouth Business School declares need for audits, benchmarking and sharing best practice

Software package - £ signLocal authorities are spending too much on their software licences and need to do better on auditing their assets and sharing best practice, according the leaders of a research project on the subject.

Portsmouth Business School and software management specialist The Business Software Centre said that councils could save £168 million a year by better managing their assets, and that there are wide discrepancies between how much different authorities pay for similar packages. They are feeding the findings in a software efficiency programme being developed with the support of Socitm.

The business school, which is part of the University of Portsmouth, ran a survey through freedom of information requests, receiving responses from 129 of the 158 councils it contacted. It asked questions such as how much they had spent in the past financial year on software licences, how many users they had, whether they measured usage and whether they used a software management tool.

They discovered a wide spread of the annual cost per user of licences at different councils, ranging from below £100 to more than £1,000 in a few cases, and that many did not have firm idea of how many people licensed to use the systems actually did so, often lacking the tools to measure usage. Many were buying an excess of licences because of worries about legal compliance without being sure they were actually needed.

"They might have 1,000 licences but only 200 people are using the system," said Phil Hames, managing director of The Business Software Centre. "That would make them 100% compliant but only 20% efficient."

The team estimated that currently councils are only making use of about 60% of their licences, and that the savings of £168 million could be achieved if all nationally could match the performance of the top 25%.

Professor Ashraf Labib of the Portsmouth Business School said: "Put simply, most councils are spending more on software licences than they need because they have no way of knowing who is using what and, as a result, most are over-estimating how much they have to pay."

He added that there appear to be no metrics or benchmarking in use, and that if these were adopted it could save millions of pounds.

The researchers also found that councils that combined in-house management of IT with outsourcing tended to get the best value, and that having a software management tool did not necessarily make them more efficient as some failed to use it effectively.

Hames said there are costs in addition to the licensing payments.

"Software licensing is a bit like the tip of the iceberg," he said. "One can observe the cost of the licences but it becomes harder to quantify the hidden costs such as maintenance, support staff, security, hardware and software updates, procurement and so on, when one purchases assets that are not used.

"If software usage is optimised it will lead to a greater cost-effectiveness through the IT of any organisation."

He said the auditing process should be relatively simple as tools that track software usage are available, and at the least councils can question their staff on how they are using the packages. But he warned that currently "nobody knows what good practice looks like and how they can measure it".

Hames said the company and the business school are now working with Socitm and talking with some local authorities to push forward a programme to develop metrics and benchmarking, and to identify and share best practice.

http://www.businesssoftwarecentre.com/

http://www.port.ac.uk/portsmouth-business-school/

Pictured: Blank E-Box for Software | Przemyslaw 'env1ro' Szczepanski, SXC

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