Times are tough for IT departments. Talk of recession is widespread, and the fear of an economic downturn is already having an effect on organisational spending, with predicted job cuts and budget tightening.

When crisis threatens, CEOs are faced with the tough task of maximising revenue while reducing their outgoings, and often the IT department is the first port of call when it comes to cutbacks, despite its ability to increase efficiency and provide significant cost savings.

Software licensing and effective Software Asset Management (SAM) can provide IT departments with the key to making these savings. In simple terms, the trick is to avoid two common mistakes - under-licensing or over-licensing.

Said like that, it sounds very simple, but in truth managing licenses is somewhat more demanding. While there will always be a small minority of CIOs who turn a blind eye to licensing laws, in the hope that the savings made will outweigh the potential risk of an audit, it is more likely that mis-management of software is done through ignorance rather than complicity.

One organisation that has seen the benefits of SAM first hand is the Telegraph Media Group, publishers of the Daily Telegraph.

The Group saved £100,000 on over-licensing through implementation of SAM. With 1,000 employees and even more desktops, laptops and servers at five sites across the UK, the Telegraph Group implemented an automated software solution, which allowed the IT department to more accurately determine how much software was on the network and therefore what their licensing position was.

In this case, they were immediately able to see that they were significantly over-licensed, allowing them to renegotiate their license contracts and redistribute any licenses which weren’t being used.

It is easy for those responsible for the organisation’s compliance to lose sight of how software is being deployed and used across the IT estate. The ease with which software can be downloaded, installed and shared across multiple PCs means that even if the IT department thinks it has software procurement under control, actual usage can quickly outpace planned deployment.

But while this shortcoming is unintentional, it can still be seen as illegal activity and can leave businesses perilously at risk from vendor audits and subsequent fines. Alternatively, they may be so aware of the potential legal proceedings they over-invest on licences, just to be on the safe side. As such, what is needed is a solution that gives the IT department complete governance of their networks.

SAM offers the key to both minimizing the risks associated with under-licensing as well as eliminating wasted purchases of software or renewal of unfavourable maintenance contracts. SAM is based on having both technology in place to understand what’s happening on the network as well as adopting best practices to manage IT operations, thus forming the foundation for effective Software License Compliance.

Adopting best-of-breed SAM technology can quickly provide CIOs with a clear understanding the IT assets deployed across their IT infrastructure - which in its own right can lead to a significant ROI as redundant purchases are avoided and under-used assets are re-deployed.

The right SAM tools then make it far easier for CIOs and senior IT staff to record license entitlements and compare these against actual usage, giving an at-a-glance view of whether money is being wasted through unused software or whether the firm is at risk through over-usage.

In reality, it is likely that both under and over-licensing will be found - meaning that while some new licenses will need to be purchased, the cost of this can be offset by savings in surrendering unnecessary software or renegotiating support contracts.

Tracking software usage (as opposed to simply detecting whether an application is installed) is critical to spotting opportunities to save costs. For example, removing unused software will eradicate potential over-licensing or re-deploying the application elsewhere in the organisation will avoid duplicate procurement.

The main thing, however, is that armed with this information, CIOs can rapidly take steps to put the situation right - simultaneously avoiding risks and driving savings.

In the past, there has been a perception that it is hugely complicated and unwieldy to deploy a SAM project. However, recent developments which combine technology and best practices in an integrated ‘package’ have dramatically simplified SAM adoption and sped up the time to see a return on investment.

Not only can businesses save money, but knowledge of IT assets can also improve productivity by increasing visibility across the company and ensuring that everyone is using the appropriate software efficiently. Since IT networks are prone to regular change, it is not enough to carry out a solitary audit and assume that the findings will remain the same.

In a time of uncertainty and instability, organisations cannot afford to take a gamble on software licensing, and with effective Software Asset Management in place, not only can this situation be easily resolved, but the CIO can actually prove their worth to the business by demonstrating tangible ROI.

Matt Fisher is Centennial Product Manager at FrontRange Solutions