Accountants not techies should control software licences

Businesses are paying higher software costs and risk falling foul of the law by leaving the management and monitoring of licences in the hands of IT departments rather than accountants, according to a new survey.

More than half of the 400 senior finance professionals questioned in the Institute of Chartered Accountants in England and Wales (ICAEW) research, sponsored by Microsoft, said they leave the monitoring, auditing and policing of software use within their organisations to their IT departments.

More than two-thirds said they have processes in place to manage software assets but only one in five said they include a software audit within their financial review. Most checks are also done annually with only four per cent doing monitoring on a monthly basis.

Dr Paul Booth, technical manager at the ICAEW, warned that businesses need to take a risk-based approach to their use of software.

"They need to make a careful judgement of what they should do in the way of monitoring and control, bearing in mind the serious risks. On the one side, they risk wasting money if they are paying too much and, on the other side, they risk finding themselves on the wrong end of a dispute with a software supplier if they are paying too little," he said in a statement about the survey.

Vaughan Smith, head of software asset management at Microsoft, said it is vital that the finance department views software as an important company asset and manages it that way.

"Not only should it be good business sense for companies to know what software licences they own and what software they're using, they could be saving as much as 25 per cent on the costs of owning, maintaining and supporting this asset - but they need to gain control of it first and monitor it on a frequent and ongoing basis," he said.

Microsoft claims the benefits of good software management include financial security from unexpected licensing costs, elimination of software that is not being used but is still maintained, and good corporate governance.

"There needs to be much stronger involvement of finance departments when it comes to managing software assets," said Smith.