5 Steps to Maximize Software License Management ROI

While every software license management (SLM) program is unique to the organization it serves, several common steps can maximize the return on investment (ROI) made in the people, processes and technologies.

Step 1: Centralize All Software Licensing Operations

Pooling all licenses, regardless of application locations, creates a central repository where licenses can be available to meet needs as they arise. Centralizing SLM provides IT managers with a single view for more effective and efficient deployment of licenses across enterprise units.

A single view also improves visibility into licensing inventory, enabling administrators to know which licenses are available and when any given license will expire. This, in turn, permits redeploying under-provisioned licenses.

Centralizing licensing also enables proactive SLM, such as receiving alerts before license expirations. Early issue resolution supports employee productivity and lowers administrative costs.

Additionally, centralization improves IT resource utilization. Rather than employing a dedicated SLM administrator at each location, an organization can assign a single individual to manage licenses across the enterprise.

Step 2: Consolidate Licenses and Vendors

Once a central repository is established, the SLM administrator can accurately inventory licenses and compare them with licensing needs. This often results in the ability to consolidate licenses under various producer programs at a significant savings.

An analysis of sources from which an organization purchases software can squeeze out even more savings. By eliminating small purchases from multiple sources, in favor of volume purchases from a limited number of IT partners, the cost of individual licenses can be greatly reduced.

Step 3: Gather accurate usage Statistics

Legacy SLM tools frequently record only the initial installation of an application – rather than monitor its use. Furthermore, such tools don’t permit users to “check in” a license when they’re finished using an application, a situation that can lead organizations to purchase unnecessary licenses.

Fortunately, modern software license platforms permit IT managers to base purchasing and renewal decisions on accurate, detailed usage information collected over time. This can significantly minimize the errors organizations commonly make in software licensing.

Step 4: Effectively Leverage Usage Reports

Today’s software management tools can generate detailed and accurate usage statistics. This allows IT managers to segment and analyze usage statistics by location, project, user group or other categories. This provides detailed insights into actual software usage across the enterprise and enables organizations to:

• Reduce Spending on unnecessary Software. The fastest and least painful way to reduce software costs is to eliminate unnecessary, unused or underutilized software. This not only reduces purchasing expenses but also lowers update and support costs. Sometimes organizations can even trade in unused titles.

• Manage Licenses According to Peak Demand. One way to purchase and manage licenses is to determine how many licenses are required during peak demand periods. Then an organization can set thresholds that deny usage when demand spikes.

  For example, an organization may allocate 10 licenses to a workgroup of 11 users and set 90 percent as the threshold. Then peak demand will occur when either one or no license is available. By denying access to some users during periods of peak demand, the organization can see significant savings from owning fewer licenses.

  This strategy is effective if users are denied access only for a few minutes or rarely. When denials are disruptive, users become less productive and hoarding behavior can occur, where individuals refuse to exit an application for fear of being denied in the future.

  Adopting a software license tool that permits analyzing usage regarding the time of day, week or month is vital.

• Optimize Software Renewals and Remixes. By some estimates, IT organizations spend 10 to 20 percent of their budgets on unneeded software updates and maintenance. Analyzing and leveraging usage data can help avoid the erroneous assumptions that lead to these costs.

  With robust software management tools, IT managers can determine whether usage trends are permanent or part of normal business cycles and take appropriate action. For example, software licenses can be remixed in cases where a project takes one set of software applications during the conceptual phase, another set during prototyping and a third set during testing.

Step 5: Automate Software Licensing Operations

As long as organizations rely on software to do business, the need to continuously evaluate and assess licensing requirements will remain. The more timely, accurate and precise the licensing data IT managers have, the more tightly they can align software licenses to business needs and, in turn, drive down costs. Automation holds the key to getting the job done.

Software license automation also allows for establishing an effective chargeback system. Such systems not only ensure that business units are correctly charged and credited for license cross-sharing but also allow IT managers to develop more sophisticated license-sharing strategies across enterprise units. Only automation makes this possible; spreadsheets just aren’t sophisticated enough.

For more information, download Software License Management for the Modern Enterprise.