IRS caught evading SAM and SLO best practices

Just like most other organizations, the IRS needs help with their software asset management (SAM) and software license optimization (SLO) tools and processes. 23 of 27 software product titles chosen for an audit were out of compliance. Other software products were shown to be over licensed, highlighting waste of taxpayer money due to unused licenses.

Last week an internal audit report was released to the public by the Treasury Inspector General for Tax Administration (TIGTA). Here is a link to the brief; Desktop and Laptop Software License Management at the IRS Needs Improvement and here is the full 27 page report; Desktop and Laptop Software License Management Is Not Being Adequately Performed .

I am happy to see that there is some oversight being provided through auditing. Here is a statement by J. Russell George, the Treasury Inspector General for Tax Administration and his recommendations:

“Efficient and cost-effective management of the IRS’s software assets is crucial to ensuring that information technology services continue to support the IRS’s business operations,” said . Our recommendations are intended to help the IRS provide efficient service to taxpayers”

TIGTA recommendations for the IRS:

  • Develop policies and guidance as well as roles and responsibilities for managing software assets and licenses
  • Implement a specialized software license management tool and develop detailed standard operating procedures for using the tool
  • Develop an inventory of software licensing data and maintain the inventory with a specialized software licensing tool
  • Maintain data in the inventory that the IRS can use to more effectively manage software spending

The detailed report indicates that the TIGTA has knowledge of software asset management (SAM) and ITIL processes and best practices and made the recommendations based on these standards. IRA IT management agrees with the recommendations, for the most part. So, more good news. So what now?

Takeaway

Sadly, most organizations are in the same boat as the IRS, so I’m actually not surprised to see this report. As a US citizen, I would like to see the IRS implement a mature tool and standard processes that allow for software license optimization (SLO). Doing so could result in a yearly savings of over $70 million. According to the auditor’s report, the IRS spent $235 million on computer software products in Fiscal Year 2011. SLO can save organizations up to 30% on software expenditures.

As an IRS customer, I would like to see the IRS choose an SLO tool that offers a good mix of features and flexibility such as:

  • Native discovery and inventory or the flexibility to import data from 3rd party sources
  • Manually input or automatically import business data including purchases, contract and organizational
  • Manual or automatic linking of business data with inventory to create license positions
  • Advanced intellectual property including libraries for application recognition, product use rights and SKUs that are updated regularly
  • On premises or SaaS options
  • Vendor delivery services offerings based on the IRS’s business objectives including process creation and alignment
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