Hybrid Sourcing for SAM

Hybrid sourcing for SAM involves some mix between internal employees and an external SAM Managed Service Provider (MSP). All effective enterprise-level SAM programs follow a hybrid model.

Some functions within SAM could be successfully sourced either way, depending on the circumstances. However, certain other functions are best sourced only internally or only externally. For this reason, sole sourcing (whether internal or external) is highly unlikely to result in effective SAM.

SAM functions that are best sourced internally

The most important function that should be sourced internally is that of the SAM program head. This role involves the management and supervision of the hybrid team. An external service provider should not manage itself (performance/SLAs, contracts, payments) nor manage internal employees. More importantly, the role of SAM program head involves strategy and stakeholder management, which are vital for the program’s long-term success and must be led by a dedicated senior internal employee.

SAM functions that are best sourced externally

Gartner provided a great overview of the SAM MSP market and its drivers in their recent Magic Quadrant report. Our experience is that publisher-specific expertise is the most important competency to be sourced through a SAM MSP, as it involves expertise in the unique licensing, pricing, and compliance rules of each major software publisher/vendor. Publisher-specific expertise encompasses activities ranging from license reconciliations and production of Effective License Position (ELP) reports, identification of cost savings and risk mitigation opportunities, audit support, publisher onboarding as part of SAM tool implementation, and many others.

As discussed in my webinar on this topic, publisher-specific expertise is where the magic of SAM happens and where cost savings are achieved. A qualified SAM MSP will involve consultants with lifetime focus and expertise in each software publisher, including prior experience working for and/or auditing on behalf of that specific publisher, and visibility into hundreds of similar & recent client situations. Such expertise cannot be effectively acquired or maintained internally. This is due to the sheer number of software publishers, budgetary considerations, the level of depth and constant pace of change involved in each publisher’s licensing and pricing rules, and the fact that an internal employee is only exposed to a single organization. Of course, sourcing externally for publisher-specific expertise typically makes economic sense only for the major publishers used (as one example, the top 20 publishes which make up more than 85% of the software spend).

External sourcing also makes sense where multidisciplinary integration is needed, necessitating specific skill sets such as those combining SAM & Cybersecurity or SAM & ITSM.

This concept of sourcing for expertise is no different from how an internal general counsel would never attempt litigation but instead engage outside counsel with the specific expertise required, or how a family doctor would never attempt brain surgery but instead engage a neurosurgeon. In both examples, as in SAM, it is the principle of hybrid sourcing for expertise that produces an effective result.

SAM functions that could be sourced either way

Many other SAM functions could be sourced either way, depending on factors such as availability of internal skills, time zone requirements, time horizon (for example, a temporary project vs. ongoing), MSP costs vs. fully loaded internal FTE costs, and more. These other functions may include anything from daily SAM tool administration, ongoing software contract renewals management, SAM program governance, policy & process management and execution, and many others. A specific analysis is required for each situation to determine the best sourcing route.

Conclusion

It is nearly impossible to achieve a successful and effective enterprise-level SAM program when sourcing only internally or only externally. Rather, a hybrid sourcing approach is required. Certain SAM functions should be sourced internally, others should be sourced externally, while the rest may be sourced either way depending on the circumstances.

Sourcing Options for sample functions within SAM