Digital Supply Chain

The Benefits of Building an Effective

Software Digital Supply Chain

The Benefits of Building an Effective Software Digital Supply Chain

Effective digital supply chains have become the most recent cornerstone of digital transformation initiatives. The fast pace of technological change as well as the added complexities introduced by an increase in cloud consumption has meant that Procurement and Asset Management leaders are under increasing pressure from their organizations to deliver cost savings, while being receptive to the ever-changing business demands.

As a result, managing the external and internal challenges requires the right combination of technology, processes and talent to execute on an effective supply chain plan.

A software Digital Supply Chain (DSC) creates a seamless, integrated set of systems and activities across the procurement cycle of software and cloud services – from software demand to fulfillment and optimization. It accomplishes this through better supplier collaboration, joint process improvements and integrated tools and workflows – which result in process efficiencies as well as more proactive contract and renewals management. Ultimately, an effective software supply chain will help organizations get the right software for the best price, delivered to the right users in a shorter period of time.

However, not every business has an effective digital supply chain program that could allow them to realize these benefits while avoiding wasted investment that may occur as a result of inaction. Let’s look at three primary ways that an effective Digital Supply Chain can benefit an entire organization.

Greater Efficiency

Digitized supply chains create new opportunities for standardization and increased efficiency.

Having a central platform where a catalog of approved software publishers and products with clear purchasing approval workflows can be maintained enables users to purchase the software they need quicker and easier. This also allows the standardization of purchasing processes and ensures users are purchasing the right product from the right location at the right time, eliminating risk and wasted software spend. Having these standardized workflows and approval processes in place also provides a better end-user experience as software requests can be delivered in hours or days, not weeks or months.

For even greater efficiency across your entire organization, integrating automated solutions into your digital supply chain is key.

Demand Qualification & Automated Approvals

By provisioning whitelist applications and updated service catalogues, organizations can ensure users have access to an approved set of software products which can be requested and attained with reduced administrative effort and delays. An effective digital supply chain enables automated workflows that allow faster provisioning of approved products. This gives Procurement and IT teams every confidence knowing the software is secure from breach, while ensuring new software outside of catalogues is directed to the right teams for further assessment and approvals. This will in turn reduce exposure to unknown End User License Agreement (EULA) risks.

Optimize Your Costs

Strong digital supply chains provide transparency into not only licensing costs, but hidden costs like transactional spending. Users can see all their software transactions in one place with associated contract information, renewal dates and usage data for both on-premises and in the cloud. Take a look at the chart below, based off of a fictional company:

Costs
Cost optimization potential with PyraCloud, source: SoftwareONE

The red bars illustrate how much this company is spending on licenses associated with a certain publisher, while the grey line represents the number of transactions made to procure the specific product and the associated expenses generated by those purchases. Many organizations assume that the software with the greatest number of licenses is incurring the greatest amount of spend – and the graph illustrates that this isn’t always the case. SoftwareONE’s own analysis shows when it comes to high-volume tier 2 or 3 transactions, the costs associated with administration and transaction of software is actually greater than the cost of those applications. Without the right DSC strategy, the ability to volumize and consolidate these purchases is reduced and those sources of wasted spend would go undetected for a long time.

An effective platform for DSC is one that provides trend analysis and intelligent reporting over time, allowing organizations to estimate current and future demand and therefore take advantage of consolidation opportunities; via site licenses, or consolidated purchases as examples.

Proactive Contract & Renewal Management

An effective digital supply chain supported by a strong procurement platform should provide dashboards containing software and cloud subscription and contract key dates. This intelligence in turn allows Procurement and Asset Managers to proactively perform demand management and contract right-sizing, ensuring all opportunities for optimization are leveraged. These may be in form of:

  • Demand right-sizing to ensure only required subscriptions are renewed
  • Take advantage of optimization opportunities through co-termination and consolidation of contracts
  • Analyze trends and forecasts more effectively
  • Provide dashboard for stakeholder with upcoming and historical spend overview

Final Thoughts

Software procurement can be a time-consuming, expensive, and labor-intensive process. Organizations need software that aligns with long-term business goals and meshes with their existing infrastructure, but this process requires efficiency and the right mix of technology, processes and expertise to ensure wastage is minimized and overpriced or redundant technology is removed from the environment where possible.

At SoftwareONE, our DSC offering provides customers with the right mix of tools, automated workflows and experts to enable them to realize the benefits of an effective Digital Supply Chain. This is achieved through the provision of streamlined procurement processes, visibility into all software transactions, improved end-user experience and greater cloud spend management capabilities. The right digital supply chain practices can give your business a competitive advantage – are you ready to reap the rewards?

Managing Software & Cloud Spend Within the Digital Supply Chain

It can be intimidating to build a software digital supply chain solution from the ground up – but with the right guidance, your organization will be enjoying the benefits in no time. Register for our upcoming webinar to hear first-hand from our experts.

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Author

Shadi Khoshab, Blog Author SoftwareONE Blog

Shadi Khoshab

Product Manager, SLM Managed Services

Group Innovation & Technology

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