How to manage your software licences effectively 

Your guide to software licence management 

Managing software licences is crucial for organisations to ensure compliance and maintain operational efficiency. Without proper oversight, software licensing can lead to unnecessary and insidious expenses, reputational damage, legal risks, and inefficiencies. 

“If a company does not have a good picture of their software landscape, they could end up renewing $50 million dollars of licenses when they are truly only using $20 million worth of licenses.”- Erwin Yuen, Managing Director in Deloitte Risk and Financial Advisory’s Software Asset Management practice 

Software licence management is business critical. Software licences are not just expenditure large enterprise businesses need to be mindful of- all businesses, big or small, may be wasting money on under-utilised software.  

Expert software licensing services help you save costs and boost operational efficiency. For example, Surrey County Council achieved 20% cost savings through our efficient software management service; we streamlined their licensing under one contract and service procedure, meaning both licensing and administration costs were drastically reduced.  

Here are some comprehensive steps to manage your software licences to ensure they do not hold your business back. 

Step one- define your goals and policies  

Internal IT departments must establish clear goals for software licence management. These goals may include: 

• Complying with vendor agreements 

• Reducing unnecessary spending on software you do not use  

• Streamlining licence procurement and renewals 

• Avoiding legal penalties related to software misuse and non-compliance 

Having well-defined policies ensures a structured approach to licence management and aligns stakeholders. 

Step two- Take inventory of your licences 

A key component of software licence management is maintaining an up-to-date inventory of all software licences, including: 

• Licence types (whether your licence is subscription-based or not) 

• Number of licences owned  

• Number of licences in use 

• All licence renewal and expiration dates 

• All vendor agreements and terms 

Automation is key to managing this productively and effectively.  

Step three- Conduct regular audits  

After you have an inventory in place, it is much easier to  

• Compare actual software usage against licensed entitlements 

• Identify instances of over-licensing or under-licensing, where you can eliminate the ineffective software 

• Track unauthorised installations or shadow IT software, which could be a cause of mounting costs 

Regular audits help to mitigate compliance risks and unnecessary costs associated with software mismanagement. They also mean you can understand the measure required to optimise your software estate, such as software metering to monitor usage or reallocating licences based on employee needs. 

Step four- Train your teams on software licence compliance 

Proper training ensures compliance is ingrained in your culture and all employees know how to uphold this. Your training should include: 

• Guidelines on installing and using software 

• How to go through the proper channels to request new software 

• Promoting an in-depth understanding of legal and financial consequences of non-compliance across departments 

Educating all employees helps reduce the risk of unauthorised software installations and avoid potential legal issues. 

Step five- Do not be afraid to negotiate your vendor agreements 

Negotiating your vendor agreements can be an outstanding way to save on costs. The best ways for you to do this include: 

• Regularly reviewing vendor contracts to identify opportunities for refinement 

• Consolidating multiple separate software agreements to leverage volume discounts with the same vendor 

• Exploring flexible licensing options (such as pay as you go models) to adapt to changing business needs 

This helps you maximise your software assets and save substantial costs. 

Step six- Continually optimise your software licence estate 

Software licences can evolve over time, so you must continuously review and refine your licences and management strategies. Best practices include: 

• Staying informed about changes in your contracts and licence terms from vendors 

• Evaluating new tools for better pricing and more effective features to benefit your business 

• Conducting periodic reviews to identify areas for improvement 

By taking a proactive approach, businesses can avoid unnecessary expenses and ensure long-term compliance. 

The challenges faced when organisations try to manage software licences 

Managing software licences effectively is critical for cost optimisation, compliance, and operational efficiency. A proactive approach to software licensing means you set clear policies and goals, keep your inventory updated, conduct regular audits, conducting, and leverage automation. By being proactive, organisations can streamline licence management and reduce risks. This approach to licence management not only saves money but also enhances IT governance and overall business performance. 

We find there are three main challenges faced by organisations when managing software licences: 

• Understanding the often-complex terms and conditions of the licence agreement 

• Tracking the licences you have, making it challenging to ensure you are compliant with your software licence agreements. 

• Negotiating the best possible price when liasing with software vendors 

This is why we offer expert software licensing services to: 

• Negotiate the best price for the most efficient software for your needs, on your behalf 

• Assess if you would benefit from flexible options such as pay as you go models 

• Consolidate your licences into one location for easy management and visibility 

• Automate processes like software tracking, monitoring usage, and licence renewal, using real-time alerts 

• Provide expert advice to inform your software decisions 

For software licensing management that delivers tangible results for your business, trust the experts and leverage managed software services to save costs and boost efficiency- without having to use additional internal resources.