Battling the Tech Vendors: Optimising Licence Spend and Avoiding Audit Risk Market View Report
What can enterprises do to manage software licences better?
Many firms get tempted into purchasing software with an unlimited number of licences. They focus on the comfort of knowing that everybody in the business can use the software if they need or want to, but fail to think about whether this is actually the best option for them. It is highly likely that as a result, they will spend more on the software than they actually need to. A simple step to start optimising software spend is to review exactly who in the business needs access to the software. It’s surprisingly common to find that there are still active licences for employees who don’t even work for the business anymore! Once a business has this visibility, they can speak with their software vendors to see if they can only pay for the licences being utilised. For relationships with new vendors, it is prudent to start by purchasing the number of licences that are required to begin with, and have an agreement for any extra licences required at a set amount of percentage to allow for more accurate forecasting. There may be some exceptions to this in enterprise businesses when a software is likely to be used across the business. If a diligent review shows that a software will be used by the majority of employees in very large organisations, then sometimes purchasing an unlimited number of licences may prove more valuable. Whichever route you choose to go down, make sure it’s based on the data in front of you.
A simple step to start optimising software spend is to review exactly who in the business needs access to the software.
How can business leaders make cloud adoption more successful?
Enterprise businesses are now fully aware of the benefits that the cloud brings and are actively seeking to adopt it more and more. The benefits of scalability and not having to pay for ongoing maintenance tend to get business leaders excited about the cloud, but before committing they need to consider whether it is the right time to start their cloud journey. Proper due diligence is required before committing to a cloud roadmap. For example, which applications should be placed on the cloud first? Do some applications need to stay on-premise for security reasons? How will moving to the cloud impact the everyday working life of employees and the way customers interact with your business? These are all questions that should be reviewed thoroughly with an implementation partner. Proper investigation and thought into these questions helps to prevent customer frustration and unexpected extra spend when adopting the cloud. Some guesswork can be removed from the process by simply speaking to peers in the industry about their cloud journeys, to find out what has and hasn’t worked for them.
Proper due diligence is required before committing to a cloud roadmap.
Why do enterprises waste money on software?
Software management is very rarely centralised, even in large businesses. When departments and individuals are allowed to purchase and manage their own software, the costs can quickly increase. As a result, there is rarely central visibility about how much a software is consumed across the business and a lack of active licence management. If a software contract autorenews, it is possible that the business is paying for licences or functionality that they don’t even need. When software functionality is sold as a bundle, enterprises often take the bundle because it feels like a good deal. But if they stop and really think about it, they may not need all of that functionality and could be saving money. Enterprises need to take the time to review their software functionality and consumption, making sure to only pay for what they need where possible.
When departments and individuals are allowed to purchase and manage their own software, the costs can quickly increase.
Ashima is an experienced IT procurement leader with strong experience in Strategic Sourcing and Vendor Management across technology and other indirect categories. Her success in contract negotiations, strategic sourcing, category management as well as supplier management for some of the biggest companies in the world gives her a unique and highly valuable perspective.