Computer software is playing an increasingly central role in driving business productivity and performance, according to a new survey of 200 Birmingham-based information technology (IT) decision makers.
But alarmingly, the survey respondents also confess to not managing their software as a business asset because of lack of time, tools and processes - a situation which experts claim could expose them to financial losses, legal action and data security risks.
The research, carried out on behalf of the Business Software Alliance ( BSA) --www.bsa.org/uk - found that 67 per cent of Birmingham businesses understood the importance and value of software to their business, yet 80 per cent were not familiar with software asset management (SAM), while 58.6 per cent had no rules for the acceptable use of IT.
Siobhan Carroll, regional manager northern Europe at BSA said, "On the one hand, Birmingham companies are telling us software is crucial to their business, and, on the other, they're saying that they're not managing it."
The survey found that nearly a third (30 per cent) of Birmingham businesses were managing their software assets purely by 'going on gut feelings.'
When IT decision-makers were asked why they weren't formally managing their software assets, the top three reasons were a lack of processes, time and tools.
However, the BSA says that by effectively managing software assets, organisations can ensure license compliance and prevent copyright breach, legal action and fines and minimise the risk of software failure and system downtime.
It will also ensure that they will receive support services, such as security patches, when required.
Matthew Cocks, software and infrastructure general manager at SCC, Europe's largest independent technology group with its international headquarters in Birmingham, said:
"Technology assets need to be managed - just like any other major capital investment.
"Successful, on-going control of software will give the chief information officer peace of mind, not least due to the increasing and changing legal obligations of compliance.
"The benefits of effective management are tangible and include minimising hidden costs and maximising the performance of the IT estate."
He added: "A good example of successful software management is the work SCC has undertaken for one of the UK's leading telecommunications brands.
"Further to auditing the software in use, we have reduced licensing costs by 75 per cent - having established changing compliance needs and removed discrepancies.
"Moving forward, we will take responsibility for ongoing software management - a critical success factor in delivering effective asset control for business benefit."
The Business Software Alliance says that SAM also allows for significant cost savings in related process and infrastructure costs.
It prevents over-licensing, identifies over-deployment of hardware and reduces IT administration and support costs, giving businesses tighter control of software costs. SAM can also show businesses where the return on software investment lies.
Siobhan Carroll added, "Software should be treated like any other valuable business asset.
"Companies need to ensure it is legally procured, fully licensed, deployed efficiently so employees only have the applications they need, upgraded with all the latest security patches and regularly audited.
"By purchasing and managing software strategically, businesses can benefit from tax breaks and increased bargaining power over volume licenses."
A spokesman for Birmingham Chamber of Commerce added: "Birmingham's thriving business community makes a significant contribution the UK economy.
"Local businesses can contribute even more by adopting software asset management and ensuring that they are using fully licensed software to help reduce the UK's piracy problem."
To help businesses with software management, The Business Software Alliance has launched an interactive software health check tool.
Available to download at www.justasksam.co.uk, the application takes users through a step-by-step assessment of their current software management status.
Once this has been assessed, a report based on the results can be printed which provides advice on software auditing, inventories, procurement, company policies, upgrades and negotiating with suppliers.
The website also offers an overview of the legal requirement for software asset management and information on effective software management procedures.