Fostering CFO and CIO Collaboration in Software Asset Management
As a CIO, you’re trying to make sure your company stays ahead with the latest technology, and you recognize software asset management is vital for the health of your IT budget. Not only can Software Asset Management track your inventory and make sure that you remain compliant with your licenses, it can also decrease your software spend by 20% or more over an extended period. But how do you sell SAM to your CFO?
According to a survey performed by Gartner and the Financial Executives Research Foundation, 42% of IT departments answered to the CFO and 26% of all IT investments were approved by the CFO as opposed to the CIO, who only approved 5% of all investments.
So, the question remains, how can you convince your CFO of SAM’s importance?
At MetrixData360, the decision-makers we frequently speak with are in both finance and the IT departments, and so we are familiar with how to effectively communicate with both. Here are some benefits and talking points to use when go to sell SAM to your CFO.
Digital Transformation Makes Technology Important to the CFO
A CFO’s job isn’t simply to horde as much money as possible, they’re not a dragon. Their job is to see the company grow through smart investments.
One of the reasons why the CFO and the CIO have often butted heads in the past has been due to conflicting goals. A CIO’s job is to enhance the business through monitoring the technological systems that are in place and deploying more effective ones. Therefore, a CIO would appreciate technology and the need to upgrade older systems. Meanwhile, the CFO would see such an upgrade as an unnecessary investment when compared to the outlay of capital, if the current system performed the job adequately.
Finances and technology are now the two most important departments in the modern business world, and many CFOs, if they want their company to succeed, need to understand the value of technology.
In fact, creating a mentorship relationship between the CFO and the CIO is one way in which the CFO can gain knowledge about the importance of technology in the company’s operations, despite technology not being their field of expertise. If the CFO understands the value of technology, they can often become an advocate for it, instead of a form of adversity.
Plan How You are Going to Present Your Request to the CFO
There are actually many benefits that software asset management can bring to a CFO if you present it in the right manner. Auditboard’s article 7 Ways to Win the Budget Argument with Your CFO offers the following suggestions:
- Appeal to your company’s values – frame SAM as a gateway to savings that can be better used to improve customer service, product research, or fund new developments.
- Consider the communication style your CFO prefers – are they interested in the big picture or would cost comparisons and intricate details engage them better?
Keeping these factors in mind will help you create the type of argument that will win the CFO over.
Don’t Expect the CFO to Understand the Importance of SAM
A CFO has to worry constantly about the return on investments. For SAM, that return doesn’t seem to exist because SAM done effectively seemingly does nothing at all. A strong SAM strategy means that your business isn’t disrupted by a software audit and your department’s days aren’t wasted by data retrieval projects or long drawn out negotiations.
Most importantly, there isn’t a massive sum of money that the company suddenly needs come up with to pay off penalties for unlicensed software. In short, business carries on as usual. Such a non-tangible return might seem uninspiring to a CFO.
Before you attempt to sell SAM to your CFO, consider their role in a software audit: damage control. They’re brought to the meeting for two reasons:
- To pay the software penalties, which can be a big portion of a company’s yearly software budget. The CFO has to figure out where that money will come from (usually with a tight payment date of just 30 days after a settlement has been reached).
- When a software audit has been taken to court and suddenly the company’s reputation is on the line.
Imagine what sort of thoughts might be racing through your mind having that hot mess dropped in your lap. You’d probably be wondering how things could go so sideways so fast, and now you have what feels like someone else’s mess to clean up. Since they’re not involved in most of the process, they might not understand what role software asset management has in the IT Department’s ability to control software costs or within a software audit.
CFOs Want as Little Risk as Possible with High Return Value and SAM Can Give Them That
Despite how they want a company to grow, budgets are based on the ability to plan, so unforeseen risks and surprises are factors that make CFOs nervous.
Of course, despite how much SAM can appear on the outside to be nothing but expensive tools with difficult-to-explain returns, SAM is a perfect tool for lowering compliancy risks and avoiding a huge payout that CFOs would hate to deal with.
Here are just a few more points that can be used to sell SAM to your CFO:
- According to Snow’s article Software Asset Management & the CFO, Software audits are unavoidable, there’s a 70% chance that your organization will be audited in the next 12 months, so the only thing that you can do is prepare for its inevitability.
- According to ITAM’s article, How do you convince the CFO, CFOs judge the success of a product based on profit or loss. While CFOs tend to only remember the things that turned a profit, remember that SAM can spare a company significant costs (unneeded software licenses or maintenance is a splendid example).
- Software Asset Management tools can track the usage of deployed software, creating hard data for the software’s overall usefulness and the ability to effectively project the returns of new software.
- Software Asset Management can save up to 30% of software spending since it can detect where the company is overpaying for licenses and other general waste.
- Once again drawing from ITAM’s article, How Do You Convince the CFO?, SAM can prepare the company with an estimated license position to lower the risks of any surprises to their budget. The company may not like what software asset management finds, but at least they will understand what they have to work with long before the software audit arrives. Software asset management can be viewed as an exercise to prevent unexpected losses.
Getting the CFO on board with the software asset management strategy of a company can prove critical for its implementation. Regardless of what method you choose, you need a SAM strategy in place in order to ensure compliance and software efficiency. At MetrixData360, we have spent seven years managing risk and optimizing software licensing spending. If you’re ready to cut costs in your software asset management, then visit our Contact Us page to get a free consultation today!