Unfortunately, enterprise software licensing environments are becoming more intricate — and most companies don’t even know where to start.
Over the years, we’ve helped thousands of businesses create and mature their IT asset management strategy. And in the process, we’ve noticed some patterns.
As businesses strive to properly manage their software assets, they tend to make the same missteps, including:
It’s easy to see why today’s organizations are making these mistakes. With traditional, perpetual software licensing, daily management of these assets simply isn’t necessary.
However, in recent years, there have been some big changes in how software publishers work with companies. Your organization can’t afford to have a lackluster licensing strategy.
Let’s talk about these common mistakes in more detail so you can avoid them in your business.
1. Lacking an IT license management plan
Organizations that purchase and renew software licenses without a proper plan are more likely to waste a lot of time and money.
When it comes to licensing, it’s essential to understand what your company really needs from its software. Find out what’s currently being used and ask different departments what their specific requirements are. Then, you can purchase the right amount of licenses from the start.
This information is even more critical during the renewals process, where failing to strategize could potentially cost you a fortune.
When renewing a licensing contract, it’s common for businesses to buy like-for-like contracts. After all, it usually seems like the easiest option at the time. However, in our experience, we’ve seen organizations pay an average of 30% more than they should because of this.
Instead, use the information about what your company needs and compare it to what you have so you can better understand which licenses you’re over- or under-procuring. By taking the time to reassess and thoroughly comprehend your business needs, you’ll ensure you’re not paying for redundant licenses.
2. Giving the job of IT asset management to just one person
The job of managing software licenses is often left to the IT manager. But the recent changes in the software industry make it unrealistic to expect a single employee to handle an entire organization‘s needs. With the switch to cloud-based services and the increasing complexity of licensing environments, it’s simply become too big of a job for one person to handle.
Overwhelmed IT managers often end up incorrectly purchasing licenses, causing either compliance issues from under-purchasing or wasted resources from over-purchasing.
Enterprises need a team capable of managing this ecosystem. Don’t try to save resources by giving this job to one individual. Instead, save them by ensuring that your software licenses are properly looked after.
3. Failing to budget
According to our software consulting services team, hardly any of our clients sufficiently budget before partnering with us. This is particularly true when it comes to renewals.
Many organizations incorrectly assume they’ll receive the same deal they had before. However, vendor priorities and the market itself tend to change, and you must be prepared for that. By planning costs adequately and understanding what the real requirement looks like for the long term, you’ll have a far more strategic outcome.
4. Underestimating the complexity of software licensing
Software licensing has changed dramatically in recent years. Where it was once fairly straightforward to purchase software for your business, it’s now a far more difficult endeavor.
One of the driving factors of this change is the switch to Software as a Service (SaaS)[AE2]. This subscription-based model has many benefits; however, it’s also proved to make managing software licensing more difficult for enterprises. In order to make sure you’re not using licenses you haven’t paid for, software publishers now have more detailed contracts. And the consequences for non-compliance with these contracts can be steep.
Because of this industry change, it’s now essential for companies to understand the nuances of their contracts and constantly manage their licensing.
5. Forgoing expert advice
Each publisher works a little bit differently and in order to get the most out of that contract, your business needs to work with a software consulting specialist.
The problem is that workers with that kind of knowledge are hard to come by. This is another testament to how complex these environments have become in recent years — there just aren’t that many people with the opportunity or desire to become experts in a single publisher. Plus, these employees are in great demand. Even if you manage to find a potential employee with experience in, say, Microsoft licensing, you may not be able to afford to keep them on staff.
In order to leverage expertise without breaking the bank, many companies work with software consulting partners who have knowledgeable employees on their teams. Working with this kind of third party means your organization has access to experts in IBM, SAP, Oracle, Microsoft and other major software publishers when you need it.