COVID-19: How to Save Costs from your software licensing
Written by IntegrationWorks
Published 23 April, 2020
As software and integration experts, we see the high cost of engineering software programs as a major pain-point for many organizations from multi-nationals to small to medium enterprises. Under normal circumstances many of these companies do not have effective systems in place to monitor their software licenses or usage. This results in compliance risk and heavy financial costs, including penalties.
However, in these times, there is opportunity to reduce your software licensing costs while enhancing the value and efficiency of your software system. Read some of our tips below:
## Carry out a thorough software audit
Gain an overview and detailed understanding of the software that your business currently has in use, and analyse against “nice to have” versus “need to have” requirements, and break it down into cost savings if those “nice to haves” were migrated.
Forecast future software licence growth and do so regularly. Tie those forecasts back to business indicators such as expected growth, business changes or continuity plans. Don’t fall into the trap of not seeing the problem coming. Be aware of the licencing models for your products, and if there are any duplications in applications across multiple teams. Have visibility on how you’re charged over processor power, throughput, connections or users.
Tie everything back to spending by having a clear overview of what you’re spending and where it’s going. You will be able to communicate this back to the business and know where you can close the loop on unnecessary spend.
## Maximise your existing licenses
Are all your licenses being used to their entire capacity? Tackling these issues is undoubtedly a challenge, but with the right auditing and optimisation process, you can create a streamlined software portfolio that works for you (side sell: the IntegrationWorks expert SAM team can do this for you).
To optimise your existing software licenses, you need to have a clear overview of all the services and applications that are currently in use across the organisation. You can pick up doubling of licensing here, and also compare the contractual terms. Work towards transferring licenses within the organization and maximising the value of existing software assets both in perpetual licenses and SaaS models.
## Negotiate with existing vendors
Once you’ve identified unnecessary costs, you’re in a strong position to negotiate contracts with your existing suppliers and reduce ongoing maintenance costs for unused software.
When approaching vendors to negotiate on behalf of our clients, we would usually undertake a myriad of complex actions, but an easy-to-achieve quick wins is this:
1. We look carefully at the terms of existing contracts for our clients and compare with alternative technologies before entering negotiations;
2. We’d be discussing new contracts well in advance of the next licensing renewal date to be in the best position to negotiate. Vendors are more likely to comply now if they know there’ll still be a customer at the end of the period; and
3. We’d ask about any available discounts and lighter terms given the current economic period.
By negotiating effectively with your existing suppliers, you can reduce costs of up to 45% of your licensing. Given this time, that is a huge savings for any major enterprise.
## Consolidate your existing software and hardware
Look into whether you may have multiple software licensing agreements across different project groups or various sites. This is a common occurrence in siloed businesses or teams that work across multiple geographic zones. Separate licenses often exist because of an immediate need in the business that is not formally rolled out in a project-based fashion. Consolidating these licenses into one usage agreement can dramatically reduce costs and add in extra support from the vendor.
## Manage staff usage
Having control and visibility on how your staff use software can be a great opportunity to reduce software licensing costs. Set basic system log-off periods to reduce data transfer usage, or number of licenses at one time. Assign administrative rights for any new software installation to stop users from accessing software when it’s not necessary for business operations.
Develop software usage policies and ensure all employees understand and adhere to those policies. Context around potential costs is vital to ensure employees make sensible decisions and understand the risks associated.
Ensure that any returned computers from exiting members of staff have the software uninstalled and the license released. It could also be a good opportunity to confirm with your provider that re-installations after a computer refresh do not consume an extra license.
## Lastly, engage expertise
Oversights and mistakes can be extremely costly. An investment in expertise gives you the assurance you need that your compliance is being monitored accurately especially at this challenging time. Ensuring all software is tracked and entitlements are understood is not a trivial process. Reach out for help when you need it.
Cost containment is an ongoing challenge for any business, but by aligning with the suggestions listed above you can reduce your software costs in the light of this global pandemic and come out as a stronger IT organisation on the end of it.
If you’d like to know more about our work with any customer, please contact us here: