Dealing with IBM the three key considerations to keep in mind

Author: Niall Eddery – Senior Consultant, IBM Practice Lead

From?how to plan your negotiation strategy?to the?importance and value of IBM’s License Metric Tool, our blog provides regular advice on how to get the most out of your IBM investment. With this blog, we look at three further considerations that you should always keep in mind when dealing with IBM, using real world examples to showcase best practices.

?Consideration One – Take control early on

Whether you are planning on downsizing, significantly increasing or simply renewing your IBM contract, it pays to get a handle on things as early on in the process as possible. A reactionary or last-minute approach is not going to give you the desired?control, cost reduction or?contract?terms. Instead, it pays to gain an understanding of your licensing and business requirements well in advance; this way your organization will be able to achieve its desired outcomes.

As an example, we recently assisted a large global manufacturer manage the reduction of its IBM estate. This involved reducing the?compliance?risks related to sub-capacity issues as well as gaining control over the increasing risks and costs associated with the existence of a significant amount of legacy software; both of which were key challenges for this client. The organization was also planning a data center migration, adding another layer of complexity to the project.

Livingstone worked with the client to accurately predict how the data center migration would impact its IBM usage, identifying where optimal changes could be made. Our team then mapped out a planned reduction of the client’s IBM estate by closely analyzing its deployments and licensing before scheduling the reduction at every stage of the process.

Not long after the migration and reduction, the client was audited by IBM. Thanks to the roadmap we had established, and by fully understanding the intricacies of its IBM estate well in advance, the client was able to enter the audit in a 100% compliant position. Since then, there has been a steady decrease in the use of IBM software and associated costs for this client, and it has remained compliant throughout the process.

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Consideration Two – Knowledge is key

Knowing your current IBM position, where you stand contractually in terms of licensing,?consumption?and requirements, puts you in a position of strength during a negotiation or an audit. We recently helped a large and complex global manufacturing organization get better control over its IBM estate, resulting in an optimized Enterprise License Agreement (ELA) with a significant discount.

The client originally approached Livingstone to help it through an upcoming audit, as it had limited understanding of its deployments or the company’s future IBM plans. Working alongside IBM auditors, our team of experts was able to use the audit process to gain a clear and accurate picture of the organization’s deployments and use the data to identify issues and software ownership.

From there, we worked with the client to build roadmaps for each product set, making optimized changes to reduce compliance and cost risks, and using the information collected to inform future plans for growth.

Although the organization did face a multi-million-pound non-compliance settlement due to the prevalence of?technical debt?deployed within its infrastructure, thanks to Livingstone’s IBM expertise and experience, our client was given a two-year grace period in which it could mitigate these issues without penalty.

Livingstone also helped this client re-negotiate its ELA, resulting in a contract that covered the historic non-compliance and supported the entire growth roadmap. This included IBM Cloud Paks, the vendor’s new product stack, enabling the client to effectively transform and develop its business. With our expertise and knowledge of IBM, we were able to secure over 50% discount for this client.

Because the client had a thorough understanding of its current position and future growth plans, both IBM and the organization saw optimized results – the client was able to mitigate its compliance risk, whilst also continuing on its growth journey, and IBM is working with an organization that has a solid understanding of its future IBM needs.

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Consideration Three – Maintain an ongoing understanding of your estate

For large, complex organizations with a multitude of different software, cloud and licensing requirements, negotiating a new IBM contract can be an overwhelming task. As a result, we have often seen organizations let IBM lead the way.

Take, for example, a financial services organization we have been working with. In this instance, when it became time to renew its IBM contract, the client, who had little insight or knowledge into its requirements, signed a value-based contract with a product catalogue built with little understanding of the future technology needs.

Livingstone was engaged by this client after the deal was signed, and after reviewing contracts and comparing them to the organization’s compliance position, we quickly realized that, because the organization didn’t have an ongoing understanding of its estate, it had massively over-invested in some areas and under-invested in others. This not only curtailed its flexibility for future growth, but also saw increased costs for additional software that needed to be purchased outside the agreed catalogue.

Livingstone worked with the client to re-design the deal for its next renewal, looking at how it could align products with current and future consumption and ensure greater control over its IBM estate. Negotiating the new ELA deal from this position of knowledge has not only enabled the customer to achieve its goals and satisfy its requirements, but has also meant the relationship with the vendor has improved – the organization can explain its needs more accurately and IBM can react more appropriately.

Maintaining an ongoing understanding of both your IBM position and ongoing roadmaps, and not just at the point of renewal, is essential to ensuring you have an optimized Bill of Materials to present to the vendor during negotiations. In turn, you will be able to negotiate the terms and specifics of your contract with confidence, and maintain control over your estate, both contractually and commercially, in the long run.

?At Livingstone, our experience has shown us that a managed service approach is the best way to ensure ongoing control of cost, contract, consumption and compliance of your IBM estate. To find out more about how Livingstone can help, visit out?dedicated IBM page?or?please get in touch.

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Author: Niall Eddery – Senior Consultant, IBM Practice Lead

Niall has worked in the IT industry for over 26 years and more specifically in Software Licensing for 16. His experience has taken him on both sides of the audit fence, having audited for KMPG and managed IT assets for EY and Macquarie Bank at a global level.

Niall has been a senior consultant at Livingstone for over 7 years, during which time has managed well over 100 audit projects.?His expertise is around IT?Asset Management, Software Asset Management & Licensing and he has been involved in contract compliance for?software licensing, royalty, service level agreements and channel compliance in the UK, Australia, Europe and Asia Pacific.