Does FITARA Guidance Go Far Enough in Optimizing Software Licenses?

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Here are the four levels of software license optimization maturity -- currently in use by private industry -- can could ferret out the billions of dollars of waste in federal software spend.

Jim Ryan is the chief operating officer at Flexera.

The House Oversight and Government Reform Committee recently held a hearing titled “Government Accountability Office’s Duplication Report at Five Years: Recommendations Remain Unaddressed.”

At the hearing, Beth Cobert, deputy director for management at the Office of Management and Budget, testified. She was questioned by committee member, Rep. Tammy Duckworth, from Illinois’ 8th District, who honed in very quickly on the subject of software license optimization:

"I noted that better management of software licenses is an area where savings can be achieved.  Can you please help me understand in OMB’s view how agencies can better manage their software licenses?  Specifically, I’d like to hear how OMB believes agencies should inventory that software to see how much of it is actually deployed to end users, and how much of what’s deployed is actually being put to use.”

Ms. Cobert’s response illustrates the depths of the federal government’s lack of progress in controlling waste due to poor software license management practices. In her testimony, Ms. Colbert noted that the government is developing a system for managing and inventorying its software licenses, which are procured on a highly decentralized basis.

She noted that the recently passed Federal IT Acquisition Reform Act legislation will give the federal CIO more authority in getting agencies to better coordinate and consolidate their buying. OMB has put together its proposed guidance on compliance with this law -- which is a focus area. Ms. Colbert also said getting the software spend problem under control is a big priority for the federal CIO.  

The legislative language of FITARA very clearly calls for the government to implement best practices and technology for software license management. The law directs OMB to come up with a process for review agencies' IT portfolio to identify waste and duplication and also requires OMB to develop a strategic sourcing program for end-user license agreements. 

 But OMB’s proposal lacks guidance that would enable agencies to identify and eliminate billions of dollars wasted annually on software.

It should consider the following four levels of software license optimization maturity -- which are being adopted by private industry as standard best practice -- to ferret out the billions of dollars of waste in federal software spend:

  • Level 1 Maturity: Installation Assessed – This is the discovery phase and is characterized largely by having the ability to collect hardware and software inventory to understand what is installed in the IT environment. Processes are developed and discovery tools are deployed to ensure an accurate and ongoing inventory is maintained. 
  • Level 2 Maturity: Managed Software Inventory – The second level of maturity is having a managed environment where IT operations personnel have a solid inventory and have the ability to collect license entitlement (purchase order and contract) data, and yet are not able to proactively assess their software license position.
  • Level 3 Maturity: Continuously Compliant – A continuously compliant agency is one in which Inventory is under control and the agency has moved to being primarily compliant with its software license agreement for most software titles. Inventory data contained in a centralized repository is reliable and actionable. Processes are defined and tools are in place enabling software purchase orders to be automatically imported from existing procurement systems to allow the capture of license entitlements (how many did I buy) in the asset management repository. Software asset management and license optimization tools are also in place to aid in the license reconciliation process so basic license entitlements can be compared to installations on a continuous basis.
  • Level 4 Maturity: Software License Optimization – The agency that has achieved an Optimized Maturity Level 4 is now dynamically, proactively and optimally managing software assets, taking advantage of license entitlements including vendor-specific product use rights to reduce license consumption and achieve software cost savings. 

There is no shortcut to eliminating waste in the federal government’s software spend. Moving to the cloud doesn’t solve the problem. Centralized purchasing doesn’t solve the problem. Data center consolidation doesn’t solve the problem.

OMB guidance must not only eliminate waste in the government’s software estate but also stop duplicate spending and software license noncompliance.

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