Best Practices & Tips for Software License Management

A decent level of knowledge and some good organisation habits can be a powerful combination in any area of business, including software license management. But it’s surprising how many organisations allow their software licenses to become an expensive black hole with ‘set and forget’ credit card subscriptions, duplicate instances of the same software, and unused seats. As long-term fans (and designers) of streamlined processes, and software licence managers ourselves, we’ve pooled our experience into this short best practice guide to software license management that you can implement today.

But first, we need to understand where things go wrong in the first place.

What happens when you ignore software license management

Every organisation uses multiple types of software to get their work done, which we roughly categorised into:

  • Fundamental tools like Windows and iOS
  • Software tools you use on a daily basis like email clients, project or task management tools like Slack or Trello
  • Team or function-specific tools for example BitBucket for developers or HubSpot for marketers
  • Apps and integrations that enhance the capacity of the software you are using

There’s a huge variety of software available in each category, much of it is versioned and most software licences have expiry dates. And on top of this, there are a plethora of vendors to deal with who all engage differently perhaps online only via credit card, annual bills or monthly subscriptions.

With a potentially complex tech stack in play, companies end up over-spending on software, reducing their productivity and losing out on collaboration opportunities because:

1. Their procurement processes are too difficult to navigate.

Each company does software procurement slightly differently. It may be centralised where all purchases go through a procurement department, or the IT department, or decentralised where purchasing decisions are delegated to senior managers who’ll buy through the finance system using a purchase order or company credit card.

There’s nothing inherently wrong with either of these options – the problem arises when these procurement processes are too hard to navigate so managers choose to purchase outside the system.  This is known in the industry as ‘Shadow IT’ where staff use or purchase IT devices or software without the explicit approval of the IT department because it’s easier. This leads to a few problems:

a) IT has no idea the software exists and is unable to mitigate data security and data integrity risks, particularly if that person/or team integrate it with other software the company owns. They are also unable to advise if the company already owns something that could do the job.

b) When the purchasing manager leaves and their credit card is cancelled, accessing license details, maintaining, upgrading or downgrading licenses becomes a challenge.

c) There is no centralised record of exactly how much money is being spent on software licensing across the organisation, making optimising a software budget tremendously difficult.

c) Team members sign up for trials of software on their own because they believe there’s a gap in what they’ve been provided leaving multiple free or cheap versions of software lying around exposing the organisation to data security breaches.

2. They don’t have a robust off-boarding process when staff leave or move teams.

Fact: team sizes change regularly – whether that’s because people move on to new roles outside the organisation, or shift internally to a new team.  Without a defined offboarding process that includes cancelling a team member’s seat on software licenses that they’ll no longer need, organisations end up paying for far more seats than they use. This step is often left off onboarding processes because of poor documentation, which leads us to…

3. They don’t have a regularly updated central register of ALL software being used at the company.

A device that sits on your desk can be seen and counted easily, however, software can feel a little intangible – particularly if it’s SaaS. Without a central register that gives you visibility of the details of each item in your tech stack, you’ll miss opportunities for reducing costs, increasing collaboration (either by using integrations or consolidating teams onto the same platform), and improving data security and integrity.

That said, even with a register, unless it is governed correctly, incorporated into IT, Finance and HR processes, and maintained regularly, everyone is still in the dark.

The result: a lot of mess and a lot of wasted money.

Software license management practices to keep your house in order

The scenarios above may seem overwhelming, however, there are some simple practices you can set up today to pull your organisation out of a licensing black hole.

Embed the SLAM mindset into your organisation

At DI, using Atlassian’s Jira and Confluence, we’ve created a streamlined way of managing software licenses which we call Software License Asset Management, or SLAM for short.

This means treating your software licenses and managing the overall costs the same way as physical assets like computers, phones and cars. You’d never purchase a company car without thorough, centralised records about the purchase, required maintenance, insurance and drivers (and who has the keys that day!). So, when we spend thousands of dollars on software licenses, we feel it makes sense to do the same.

To put SLAM into practice, you’ll need to create and manage an asset register that contains information for each piece of software license:

  • license number
  • license owner (technical contact)
  • cost
  • expiry date
  • renewal dates
  • licensing agreement
  • payment method, terms and currency
  • vendor
  • version
  • number of seats purchased
  • active versus inactive seats
  • who each seat is assigned to
  • which apps/integrations it works with

This register is incredibly useful for auditing and will keep you compliant with license terms and conditions e.g appropriate device usage, seat numbers etc.

To make it easier to manage, make sure it’s accessible by all teams and use a tool like Jira and Confluence. And ensure it is governed correctly by making it part of your onboarding, offboarding, finance and IT workflows.

Tip: This task can be overwhelming initially, so save yourself the time and stress and ask our team at DI to do it for you!

Develop easy-to-use offboarding processes

If you have a fleet of company cars, your HR offboarding process includes getting the keys back if someone leaves the organisation. With a SLAM mindset, getting the software ‘seat’ back when someone leaves is no different.

Get offboarding right (whether they are leaving the team or organisation) and you’ll save yourself thousands in inactive or duplicate licenses. But make it as easy and automate it if possible – even a checklist will suffice to get you started. If you’ve got a complex process, it won’t happen.

Tip: If it isn’t already automated, ensure IT work with HR to do a regular user clean-up.

Make your purchasing process easy

We can’t stress this enough – if a purchasing process is too difficult and a credit card is available, people will buy software themselves.

Ask the team not to purchase on their own, BUT make it super easy to request trials and navigate a centralised, streamlined process so it’s all recorded and managed correctly. (See our notes on setting up a register above).

Give people a clear step-by-step process for making requests, approving requests, purchasing and installing software, each with short timeframes. Nothing puts people off complying with a process like knowing their productivity will be impacted or a project delayed because they have to work within long timeframes.

The best way to do this is by bringing finance, IT and line managers together to identify a single vendor to make purchasing easier and define a process that is short and works for everyone.

Make software licensing a strategic consideration

When the company is planning a major growth strategy or a new direction, or even just for general financial year planning, IT needs to be at the table to ensure teams are resourced correctly and budgets are allocated accordingly.

Furthermore, the software license asset register, combined with HR information can be used to analyse the ratio of the price of software a team member uses and their salary. It could be worth investing more money in software to improve their productivity and get better ROI from their salary.

Review regularly – don’t just let things lapse/get out of control

Just as important as keeping your software licence asset register up to date is reviewing and analysing the information to reduce costs and improve efficiency. Get into a regular habit of reviewing your software licenses to identify:

  • any duplications that can be cancelled to save the organisation money – are A and B using different instances of the same software? By consolidating teams onto the same instance you’ll get a higher account level, reduced prices and facilitate better digital collaboration between teams
  • any opportunities to use cheaper software options or better software that can do more than one job. Many software developers are creating platforms that can be used by multiple teams which improve collaboration and reduce your software licensing costs at the same time
  • any possibilities for integrations or apps to enhance the functionality of your existing tools. New apps and integrations come out every day, so this is worth keeping an eye on
  • if there are any unused plug-ins which can be deactivated to avoid unnecessary spending 
  • where usage is dropping or increasing so you can right-size your user accounts

Bring in the experts to do SLAM for you

If this all feels overwhelming or you just don’t have the resources in-house to manage it, ask for help. The cost savings, efficiency and productivity improvements you see will be worth your while in the long run.

DI offers SLAM as a service for our clients.

We know the software inside out, are familiar with the vendors and their purchasing portals and can manage different currencies. We partner with you to:

  • Audit your existing software licenses
  • Create an easy-to-use asset register
  • Work with vendors to purchase software licenses for you
  • Manage your records
  • Send you reminders about expiry dates
  • Provide single billing in the currency of your choice
  • Find discounts that you mightn’t have access to yourself
  • Undertake total cost of ownership scenario planning

The final word on managing your software licenses

Managing your software licenses doesn’t have to be as tedious or difficult as it seems. Stay organised. Make purchasing and managing licenses as easy as possible. Centralise your information. And call in the experts who can save you a lot of time and money.

 

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