5 Best Practices for Software Licenses Management

In 2020, company spending on SaaS tools went up 50%. SaaS waste is expanding, too. Suppose your company is growing fast without a protocol for license management. You might be surprised at how many duplicated and orphaned software products you find.

Successful IT asset management (ITAM) is managing your business’s hardware and software optimization. But overseeing your business’s software licensing can be a Herculean task without the right solutions. That’s where effective software license management comes in. The right tools can help you automate your SLM to save you time and money.

What is software license management?

Software license management (SLM) refers to your company’s plan to keep track of all of its SaaS license purchases. SLM tools help track license usage and changes, ensure compliance, and accurately complete audits.

Effective SLM provides a complete picture of your company’s software stack, which helps you make better decisions that maximize your ROI.

SLM plays a vital role in any company’s overall software asset management (SAM) plan.

Why is software license management critical?

License tracking can be daunting, but the right SaaS management tool provides the metrics you need. An effective SLM is a significant component of your company’s asset management solution.

For example, according to Blissfully’s 2020 SaaS Trends Report, duplicate software application subscriptions rose by 80% from 2018 to 2019.

Employees often pay for apps your company already has due to a lack of a centralized software license manager.

Also, orphaned app subscriptions were up by almost 100% across small, mid-market, and enterprise companies. This can happen if an employee leaves your company without an offboarding process that includes reassigning their apps.

The Business Software Alliance monitors companies for non-compliance. Too few licenses can be costly—if software vendors audit your company and discover that your usage is over the license agreements, they could fine your company. In a 2014 Gartner Research survey, 68% of enterprise organizations reported at least one vendor software audit request over a year. Ensuring license compliance is one fundamental way a software license manager can benefit your business.

You might also pay for several software license agreements that offer similar features. For example, some team members might use Google Hangouts while others use Zoom or Microsoft Teams. An efficient software license manager would provide this valuable information to eliminate unnecessary licenses and help you budget more effectively.

The bottom line is that these situations create SaaS waste that you can eliminate with the right software license management tools.

What is the role of a software license manager?

Good software license managers offer a complete system that records all your apps, vendors, end-user license agreements (EULA), compliance data, and users. It should also have the workflows and automation you need to ensure software inventory changes are easy to make and record.

As workplaces continue to use more SaaS software, a good software manager should help your company manage new and complex challenges like:

  • SaaS Sprawl: If team members add or change license entitlements independently, a good SLM can track these. It can also find the ones you’re paying for in vain.
  • Decentralization: An SLM provides one clear hub for all applications. This simplicity helps reduce redundant activations and increases opportunities for collaboration. A centralized SLM is especially crucial as businesses increasingly use a combination of on-premises, cloud, and hybrid license entitlements.
  • Hiring and Onboarding: You need to know which apps your team members are using to predict the cost of new hires. For example, someone providing IT services through the help desk will need different apps than human resources personnel. Your SLM should track the SaaS tools for each employee’s access level and to what degree. It should also allow for an efficient onboarding process with easily repeatable workflows.
  • Security: A robust SLM helps you manage the varying security requirements of your company’s SaaS tools. It should minimize your risk of lawsuits, cyberattacks, and other threats that result from a lack of software license compliance.

What are some software license management best practices?

Once your company has an effective SLM in place, your team will need to implement best practices with fidelity to get the most benefit.

  • Buy-In: Software license management is most effective when everyone in the company understands its role. This principle is especially true for leadership, and managers can pass down a culture that cares about SLM. Giving all stakeholders opportunities to share input can also help increase buy-in company-wide.
  • Regular Internal Software Audits: This practice can be time-consuming, but keeping tabs on your software’s lifecycles can save time, money, and resources in the future. It’s better to have a regular system for internal audits than be unprepared for external vendor audit requests. Staying in compliance is more cost and time-effective than receiving fines or learning your company has been grossly underusing costly software licenses.
  • Role-Based Access Control: Only give app and feature access to teammates who need it. This practice can prevent well-meaning employees from making changes that would increase SaaS spend.
  • Automation: Automate as much of your software license management as possible. Blissfully’s SaaS management tool is perfect for SLM because it provides workflows, allowing you to create your own processes, like onboarding.
  • Keeping Track: A good SLM plan is like a good diet and exercise plan. You can’t just set it and forget it. It requires that you follow it consistently to be effective. Set targets based on your business’s goals and check on them and adjust the course as needed.

What are the different types of software licenses?

Understanding the types of licensing models attached to your company’s software usage is one of the first steps to intelligent SLM. When your software license manager tracks app usage company-wide, you can make informed decisions to decrease unnecessary spending.

Subscription: Subscription licenses allow users access for the life of monthly, quarterly, or annual paid subscriptions.

Perpetual: These entitlements grant indefinite software use for a one-time fee.

Named-user: This license only allows access to a specific user. You may be able to transfer access to a new user depending on the terms of the agreement.

Concurrent user: A set number of people can use the same license simultaneously.

Per device: The software is installed on one device, and many users can access it.

Network: This license provides access to all users within a given network.

Metered or consumption-based: Customers prepay for anticipated usage or get invoiced after use.

What are some risks of poor software license management?

Proper software license management is a significant but necessary investment. The lack of appropriate software license management solutions can cost your company time, money, and valuable resources.

  • Wasted spend: A lack of effective SLM can lead to an unnecessarily inflated and wasted budget.
  • Audits and fines: Too few software licenses can mean your company is out of compliance. As a result, overuse can lead to time-consuming, labor-intensive audits and expensive fines.
  • True-ups: Proper SLM can help you avoid true-ups, which are accounting reconciliations. While true-ups may be preferable to legal penalties, they still cost unexpected time, money, and resources like manual labor.
  • Shadow IT: Well-meaning teammates often purchase apps unbeknownst to IT teams. This disconnect is a major cause of SaaS waste. Streamlined SLM can help you navigate your procurement process more successfully.

How Blissfully can help

With Blissfully, teams can easily track apps, people, and spend in one place. It helps manage key license management workflows, including employee on- and offboarding, team changes, vendor approvals, renewals, app usage, and more.

Also, Blissfully’s system of record provides consistency within ever-changing SaaS organizations and empowers simpler collaboration across stakeholders. For example, it allows teams to input new SaaS licenses or import existing ones. It also integrates with vendors, such as Salesforce and Zendesk, to sync key license and user metadata into the system. So when a license is up for renewal, or an employee is onboarded or offboarded, Blissfully notifies key stakeholders about required changes or approvals.

To learn more about how Blissfully can help you manage your software licenses, request a demo.