The Best Hard and Soft Savings in your Cloud and On-Prem IT Environment

Oh, hey there. Thanks for clicking on this video. In this video we're going to talk about the differences between hard and soft savings in the software asset management and cloud industry. It's no secret that in the software asset management industry it can be hard to differentiate between soft savings and hard savings, and these two types of savings can even cause controversy in your finance department. However, before you go investing six figures into a software asset management solution or a third party service provider for optimization, it's essential to know what types of savings you'll get, how you'll justify those savings to your boss or your team, and which types of savings would be best for you to go after right now. But don't worry, in this video we'll explore just that, the definitions of hard and soft savings, the different types of hard and soft savings, and software asset management on premise or on the cloud computing environment, the common pitfalls of cloud savings initiatives and on premise savings initiatives you may run into, and how you can approach your next software asset management engagement with the best results possible. But before we jump into it, there's one last thing I want you to know. If you'd like to see the complete list and guide of the 12 most common hard and soft savings that we see with our clients, feel free to check out this hard and soft savings guide in the link below in the description. This PDF outlines the 12 most important hard n soft savings which you can use to your advantage in your next SAM initiative or cloud savings initiatives to get a jump on the savings and ROI you're looking for in your environment. You can download it for free in the link below. Now let's roll that intro. Just as a refresher. Before we go into hard and soft savings into the SAM industry, we need to define it at the basic financial level. Let's take a look. Hard savings refer to activities that have a direct impact on the business's profit and loss statements. To be hard savings, it must be auditable and measured in dollars. For example, maybe you're decreasing your software maintenance costs. Hard savings can be any activity that directly impacts the business's bottom line. Now if you follow me and we jump over to the soft savings, it can be a whole different ball game, which may scare some people away. But trust me and I'll tell you why we must not turn our nose up at the soft saving just yet. Often soft savings don't affect the organization's bottom line right away or at all. In some situations, for example, soft savings can be intangible things like reduced frustration, heightened customer satisfaction or even increased safety compliance, which doesn't necessarily contribute to the financials right away, but could pay off later down the road in the form of something like avoidance of legal costs due to those safety instructions you implemented years ago. For example, your IT team says the new SAM team initiative costs $400,000 a year, but since its implementation they've not been audited by a software vendor in three years. With their average software audit costing them over a million dollars in audit penalties and hours lost, they've returned to their company at least 1.8 million in soft savings over the three year period, thanks to this $400,000 yearly investment of a SAM team in your organization. To determine whether you're getting harder soft savings, consider this rule of thumb. If your plans have a direct impact on your business's financials within the next year, then it's highly likely it's hard savings. If the savings initiative depends on multiple assumptions and may only produce a return down the line and might not even affect the bottom line right away, then it's safe to assume you're looking at a soft savings. However, both are equally as valuable. Now it's time to talk about what you came here for. The different types of hard and soft savings found in the SAM and cloud computing industry. In software asset management, savings are what people typically think make the industry go round. However, there's more to the game than just bottom line numbers and cost cutting savings initiatives on the profit and loss statement and let me show you where they are. Let's look at the common soft savings you can achieve by implementing a software asset management process or cloud optimization process in your IT environment. Number one Avoiding purchasing shelfware the avoidance of purchasing shelfware or software which you might not need down the line is a great form of soft savings. If you had a SAM service provider, maybe they'll advise you not to purchase certain software licenses that you may that you may already have in storage or are not using or or by a little bit of optimization, you could cover users that might be under licensed as well, allowing you to avoid buying thousands of dollars of software, which you may have done if you didn't know about it in the first place. Number two on the soft saving list is audit penalty avoidance. Imagine having the knowledge to avoid that parking ticket before you even park there. Pretty cool, huh? And that's exactly what would happen if you implemented a SAM tool in your environment. It would warn you beforehand that you may be over licensed or under licensed for a certain set of users in your environment, allowing you to buy more licenses to cover that discrepancy in your next contract renewal or true up down the road, keeping your relationship with your vendor tight and avoiding the triggers that may cause another audit down the line. Number three Freeing up Working Hours let's say you no longer have to delegate software asset management or cloud savings initiatives to your IT workers that are busy on other projects. Shifting the responsibility from your IT team who has other tasks to focus on to a dedicated software asset management team is a great way to get soft savings in your environment. This is because those working hours would be freed up from your original IT team to work on what they originally meant to do. And this means projects get pushed through the door at the correct date and the innovation continues at the fastest pace possible. And Number four A soft savings that you may not even think of, which is building a strong relationship with your software vendors in the first place. It can be hard as software vendors may feel adversarial to your best interests, but if you work at IT or maybe even have a third party service provider work at IT for you and show you how to talk to the software vendors in the correct way while maintaining a good strong relationship, this could go a long way in the form of possibly even avoiding a few audits, getting better deals in the future, and even causing less stress for your workers who have to work with these vendors down the line. Number five Strong Software Contract Governance policies this is another simple one that goes back to freeing up employee resources. By having a strong governance policy around your software contracts, you won't spend hours digging through your entitlements or looking through who owns which data and where they're located in your company. Making this process simple means that employees will likely be less hesitant to jump on the project if needed, saving you thousands of dollars in working hours cost and streamlining the process as a whole. And now let's talk about hard savings in the software asset management and cloud industry. For hard savings, you'll hear things like saving costs through software license optimization. For example, you're taking a look into your company's software usage and negotiating a fair rate based on the data. Two right sizing your cloud's VMs perhaps your company is only using 20% of their VM compute power, which means that you can switch to a lower cost VCPU to handle those workloads at a cheaper rate, reducing cost and instantly Number three Removing zombie resources in your cloud environment. Zombie Resources is a tactical cost reduction strategy. Looks at resources on the cloud that aren't really being used or that aren't secure that you can decommission, for example Decommissioning compute power that no one's using. Now that you know the multiple ways people are saving or getting an ROI on their software, asset management or cloud savings initiatives, you may feel like you want to jump into one of these third party service providers or just implement a SAM tool right away to get those savings out as fast as possible. But before you do that, let me tell you not all SAM solutions or cloud solutions are built the same, and they won't all give you the value you're looking for. Let's look into why this happens by checking out the top pitfalls of software cloud savings Initiatives. Believing a SAM Tool Will Solve Every Problem with the slick marketing SAM tool developers push out, it's easy to believe their products will solve all your vendor woes. However, this is a rarity. SAMtools may only give you visibility into one vendor in your environment. There could be dozens. SAMtools also require the users to be trained to software asset management and cloud savings methodologies as well as on the software itself to get the most return on investment of the SAM tool in the first place. Users that have both these skills are rare or they take a while to get to that stage in the first place. Number two Starting a SAM or Cloud Savings initiatives Without the Right Data to successfully develop your company SAM initiative, you you must have the right people, processes and tools in place. Without these key pillars, you're bound to fail as goals will be unclear, cost overruns will run rampant, and data will be scattered like Legos on the floor. Number three Simply relying on a cloud observability platform to monitor your cloud savings initiatives or to find cloud savings initiatives in the first place. In the age of FinOps Cloud Financial Operations, managing your company's cloud expenditures takes more than a single usage tool. It truly takes a team. You must be able to account for each department's spending, analyze it, know where it's coming from, how to optimize it, to save on it at a daily rate, and be able to communicate these issues to the C level. An observability platform may cover just one check mark in the process of truly implementing a cloud savings strategy, which is why it's often a pitfall many people fall into four Looking at SAM service providers or tools without first defining your savings goals. Without naming your software and cloud savings goals, you won't get the best ROI out of your investment, nor will you be able to capitalize on alternate savings opportunities should they come up. And number five not having the proper software licensing, governance and accountability structure set up before starting your SAM savings initiatives in the first place. If you're unsure who's in charge of which vendor, who manages the negotiations, and who has access to the usage data before you start your SAM or cloud savings project, you're going to have a bad time and so are your teammates as they will be searching for all these documents where they're located in your organization. Who has access to them, wasting hours of their time and costing your company thousands of billable hours as well. With no real guarantee on an roi, no accountability means no action, so it's essential to get your software licensing ducks in a row before you start anything on a savings project. So you're probably wondering how can I start my SAM savings initiatives or cloud savings initiatives with the best results possible? Many service providers and SAM tools preach results, but don't mention the learning curves or technical processes involved in truly getting an ROI on savings from their services. We've seen the friction that rapidly implemented SAM tools and service providers can cause SAM teams and cloud teams in the enterprise space. So to make sure people aren't bringing their work home at night or feeling chained to their desk even after they invest hundreds of thousands of dollars into their savings savings project, and to make sure they can do it on their own in the future, we've started offering our software asset management and cloud optimization services that teach our clients how they can do this on their own and in their environment for years to come down the line. Unlike most SAM service providers, our SAM and cloud services are built to educate the user on how they can continually keep savings coming in and how to defend against vendor audits and vendors underhanded business practices with data from their own organization. This process has proved worthwhile as we've helped our clients save over 1.5 billion on software contract renewals alone and hundreds of thousands on their monthly cloud spend. If you're interested in learning more on how you can bootstrap your own software asset management or cloud savings initiatives in your organization with the best results possible, I want you to click the link in the description below and book a meeting with the software licensing Experts@Metrix Data 360. If you're not ready for that yet, please check out the PDF down below on the top 12 hard and soft savings that we see in our clients cloud and software asset management savings environment. As always friends, thanks for tuning in to the channel. Please slap a like on this video if you enjoyed and don't forget to add a comment if you feel that we've missed anything while making this video. And you if or if there's hard and soft savings that you find that are generating a great ROI for your team, please share it with your colleagues as well. Spread the love and the joy of the soft saving. Thank you for watching. And remember, keep your software safe and your assets managed.