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Comprehensive IT Asset Inventory Essential to Avoid Major Financial Risks

August 16, 2016

Managing inventory is one of the fundamentals of conducting business, and most organizations are well versed in keeping track of their inventory, whatever form it may take. Hardware and software assets are typically not categorized as inventory, but perhaps they should be, considering the myriad licensing and management challenges most companies face when trying to keep track of their IT assets.

Flexera Software, which focuses on helping companies optimize and manage their hardware and software assets, knows all too well that most companies are challenged when it comes to tracking their IT assets and licenses. The company discussed those challenges in a recent blog post, emphasizing that effective software asset management (SAM) must begun with a comprehensive inventory of all deployed hardware and software assets.

The alternative to having an accurate IT inventory, according to Flexera, is exposure to a number of risks. One of the most serious and most expensive of those risks is the dreaded software audit. The company’s research indicates 65 percent of organizations were audited at least once over the past year, with 23 percent of those companies audited more than three times. Nearly half of those audited ended up paying more than $100,000 in fines and fees, with 20 percent paying out more than $1 million.

An additional risk of failing to keep an accurate inventory of software and IT assets is wasting money. Flexera’s research indicates 62 percent of companies queried let at least 10 percent of their software assets go unused. Of those surveyed, 30 percent allow more than 20 percent of their software to go unused. That amounts to wasting hundreds of thousands of dollars that could be allocated to revenue growth and other investments.

A final risk associated with not keeping a proper software inventory is security threats and exposure to malware. Software vulnerabilities can be devastating for any business, with the cost of the average cyber attack at approximately $11 million. Unlicensed software creates vulnerabilities, and a recent survey from the BSA indicates 39 percent of all software installed globally is not licensed. Perhaps even more frightening is the finding that 25 percent of software used in the banking, insurance and securities industries is unlicensed.

Simply put, businesses can’t afford the risks associated with failing to maintain a proper inventory of their IT assets. Any effective SAM program must begin with keeping a comprehensive and up to date inventory of hardware and software assets to properly mitigate the financial devastation associated with unlicensed, out of compliance and unused IT assets.

Edited by Maurice Nagle
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