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Outcome based Software Asset Management

Why would the Dalai Lama travel 8000 miles to a small city in Minnesota for healthcare when many internationally renowned hospitals were available in India, Europe, or Asia? Many of the largest global cities have great hospitals, but Mayo Clinic in Rochester Minnesota continues to draw Presidents, Premiers, Kings, movies stars, and professional athletes from all over the world for their healthcare.
Whether you talk to a Mayo employee or walk the hallways of Mayo Clinic, it is evident that their pride is in offering the best outcome based healthcare in the industry. Mayo’s focus isn’t how many doctors they can offer, the price of each procedure, or the technology available but offering the best outcome at the lowest cost. Mayo is able to provide some of the best healthcare outcomes at a cost structure significantly lower than other major hospitals.

A friend at Mayo presents a good example of general healthcare and low cost outcome based healthcare. For several years, before working at Mayo, his son had a condition that required tests, multiple specialists, antibiotics, and surgery with years of no improvement. Upon starting at Mayo, his son went to one of their specialists and, without any tests, shots, prescriptions, or surgery, the condition was permanently fixed in a few days.

What are the similarities between Mayo’s successful outcome-based healthcare and the software asset management industry? I have spent over 20 years researching software costs, licensing practices and pricing across hundreds of data centers around the world and have found that similar to healthcare, there are many good examples of data centers providing good software asset management, but there are few that are set apart like Mayo.

Like hospitals, data centers are focused on having skilled specialists, processes, tools, and good vendor discounts. They look at the specialists and assume that if the specialists have the right tools and processes, they will be successful at providing quality outcomes. However, data centers don’t know what industry best in class outcomes are as those data centers are rarely seen at conferences.
The outcome is simple: provide data center software requirements at the lowest possible cost structure. The software requirement isn’t to have 1000 enterprise edition licenses but, rather, the right quantity of the right type of licenses deployed on the right hardware architected the right way at the right time at the right price to provide the lowest unit cost available.

Having attended many software asset management conferences for over 20 years and listened to many experts and research analysts present how to negotiate a good discount or buy the right tool, I have never heard a presenter explain how to measure and manage to the best possible outcome. The measurement of a good outcome is always having the right license inventory, having a centralized inventory tool, getting the best discount or negotiating the “best” deal. That is similar to hospitals that will have a patient see many specialists, undergo many tests and prescribe many medications. Outcome based SAM requires understanding what the industry outcome standards are, which requires access to an industry database of software costs by data centers to measure the outcomes.

Until SAM departments start working more closely in an integrated model to measure their outcomes against industry best in class standards, they may be a good hospital, but will never be Mayo Clinic.

About Michael Swanson

Mr. Swanson founded ISAM in 1996 and led it to become an industry leader in Software Asset Management having managed over USD $15 billion dollars in software costs across 1000 companies worldwide. Michael’s team at ISAM has played an integral role in the software asset management industry for over 20 years by: negotiated many of the first software ELAs in the industry; designed IBM’s PRA service; and the first outside consulting company brought in by a major software vendor to assist companies on audits. Clients globally have utilized ISAM’s GreenBook® and expertise to reduce their long-term software expenses by over one billion dollars.