Ineffective Software License Management Costs Federal Agencies Billions, GAO Finds

Ineffective Software License Management Costs Federal Agencies Billions GAO Finds

The Government Accountability Office has discovered that US federal agencies are wasting money. The cause? Poor management of software licenses.

Federal Agencies Plagued with License Surplus or Deficit

The Government Accountability Office (GAO), which acts as a watchdog for the US Congress, has published several reports on how well federal agencies manage their software assets. The recent January report showed that agencies still struggle to track how many software licenses they use.

Government agencies under GAO’s scrutiny are either buying more licenses than they need – called over-purchasing – or acquiring fewer licenses than they require – called under-purchasing. Both can result in significant IT spending waste.

US government wastes billions on software licenses

Over-purchasing licenses wastes money on license fees and support and maintenance for unused or barely used software. These excess costs add up over time, taking away funds from vital areas. On the other hand, under-purchasing licenses can create compliance issues, possibly resulting in legal actions and hefty penalties. Under-purchasing licenses also encourages unauthorized software use, which creates security risks due to outdated or unpatched software.

Government Accountability Office: Lack of License Usage Data Alarming

Carol Harris, Government Accountability Office’s Director of Information Technology and Acquisition Management, expressed deep dissatisfaction with the poor quality of software data that they got from the agencies they examined.

“What we were tasked to do was to look at it from the product level, what were the most widely used in which were the costliest,” Carol stated. “But we weren’t able to make that determination because agency software data are inconsistent and incomplete across the government.”

One specific agency had about 140 different products in their vendor agreement, but then they couldn’t identify the most installed products and the most paid for them.

Moreover, Carol emphasized the potential financial risks of such data deficiencies during audits. She warned that software vendors might impose exorbitant “true-up fees” if discrepancies are discovered, such as agencies using more licenses than purchased or encountering shortages necessitating additional licenses.

She also added that the lack of dependable data “at this level means we really can’t pursue government-wide solutions for bulk purchasing and discounts.”

Billions of Dollars at Risk

Each year, the federal government spends more than $100 billion on IT and cyber-related projects, which include thousands of software licenses. Without a good strategy to track these assets and using them effectively, the government risks squandering billions of dollars on software licenses.

Agency software data are inconsistent and incomplete across the government.

Carol Harris, Government Accountability Office’s Director of Information Technology and Acquisition Management

The Government Accountability Office advises monitoring software licenses and comparing them with what they have acquired to identify opportunities to reduce costs and enhance investment decisions for their shared licenses on a regular basis, besides tracking software licenses.

Manage Software Licenses with a GSA-Certified Partner

The Government Accountability Office’s latest finding reveals an essential flaw in federal agencies’ IT budget management. Effective management of extensive and intricate software license portfolios demands expertise and solutions. Open iT, an expert in software license management, offers the robust solutions and services necessary for federal, state, and local agencies to monitor and optimize their license portfolios effectively.

Certified by the USA General Services Administration (GSA), Open iT provides robust solutions for comprehensive software usage monitoring, license optimization, and cost control. With detailed usage reports, precise license tracking, and seamless integration with business intelligence tools such as Power BI, Tableau, and many more, Open iT empowers government agencies to make informed decisions and drive productivity gains.

Connect with Open iT today and explore how your department can navigate software license management with confidence and efficiency.

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