We have progressed far from the days where software was packaged as a product and sold in CDs. Today, with the rising popularity of cloud-based platform offerings, suppliers are more inclined to provide their product in a subscription-based model. More precisely, they provide access to their software in the form of license. Since software licensing cost takes up a majority of the cost base within an organization, procurement teams should always be on their toes to explore various licensing models and choose the right fit for their organization needs. Software licensing is complex in any organization. Companies usually purchase software entitlements for hundreds of rights, which are then distributed to several employees and machines. Software license management helps organizations to document and track an organization’s software portfolio.
Why do organizations need software license management?Software license management ensures compliance with a given software’s End-User License Agreement (EULA). EULA typically specifies how a software product can be used and how many users are permitted and penalties in the case of violation. In case the organization is being audited, procurement teams will have to spend a lot of time and resources to inventory all software usage and prove compliance. In case the organization is found to be out of compliance, they have to true-up their licenses where they buy the software at its book price. Additionally, they may also incur some fees or penalties. The company not only lose out on the financial front, but their reputation also takes a blow. Customers and clients of the company may lose faith in them, and their business would suffer. A good software license management tool will ensure compliance with all such issues and maintain business continuity.
How can better software license management yield cost optimization?
Leading procurement organizations can optimize their license spend by negotiating with large suppliers. Also, the teams should assess the role of third-party software asset management companies and the value benefits they offer. Tracking software usage and staying compliant helps procurement teams to plan future purchases wisely by knowing the software that is frequently, rarely, or occasionally used.
Conducted by SpendEdge’s procurement experts, this webinar on the 25th & 26th of Apr dealt with the following key considerations:
- What is software license management?
- Why should organizations have software license management in place?
- How procurement teams can yield cost optimization with better software license management
- Consequences of non-compliance with software licenses