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Don’t boil the ocean: Taking the sting out of software license audits

Fri 14 Jul 2017
FYI, this story is more than a year old

Each year, every major department store across the country conducts a stocktake.

Thankfully, stocktaking physical items, such as a pair of jeans or some t-shirts, can be as simple as scanning a barcode.

However, stocktaking becomes problematic when it comes to non-physical assets, especially software, as tracking and keeping inventory can be very difficult.

In recent years, software audits have become even more complicated as businesses now need to track software in complex environments, like the cloud and on mobile devices.

Businesses must also consider the dynamic nature of their organisation and how they are going to track software usage and ownership in the midst of mergers and acquisitions, and employee hires and departures. 

With changing licensing models, it has also become essential that organisations track how the software is being used and whether or not this usage is in compliance with the software contact.

For instance, license agreements all now contain Product Use Rights that define acceptable software use, this could be the number of devices the product is installed on or the number of users accessing the product. 

If usage exceeds those terms, the organisation would be considered out of compliance, and therefore subject to expensive and unbudgeted “true-up” penalties.

A recent report from Flexera Software explores the Software Asset Management challenges organisations face. Consider the following:

  • 75 percent of enterprises are out of compliance with regards to at least some percentage of their software
  • 65 percent of enterprises faced software license audits from their software vendors and 61 percent were audited or underwent a license review by Microsoft
  • 93 percent of organisations report spending money on at least some software that is under-used – i.e. shelfware

In light of these challenges, here are some strategies to help take the sting out of audits and reduce their potential liability and risk:

1. Don’t boil the ocean

The 80 / 20 rule applies, especially to software license management. There are usually a handful of software vendors who provide critical (and usually expensive) software for your organisation. 

So when setting up software license management processes, tools and systems – focus on the "high rollers." 

2. Build license management into the fabric of your business

Typically license management isn’t part of normal business operations and unless it is, it will not be attended to.

Therefore, license management must be included within signed off procedures to ensure license compliance is maintained and all software costs are controlled.

 3. Negotiate measurable contract terms and communicate Internally

More often than not, there is a lack of communication between IT Procurement—the contract negotiators, and IT Operations—those who deploy and manage the software.

Since there are multiple parties involved, seamless communication across these groups is crucial to ensure software license compliance considerations are incorporated into all decisions.

 4. Let each vendor know you are serious about license compliance

You can let each vendor know how seriously your business is taking the subject of license compliance and also demonstrate the control you have over your software estate.

This enables the business to capitalise on the work that is invested into license management.

5. Involve senior management

You will need "buy-in" from senior management to implement an effective license management program. 

6. Centralise License Management

There are many business processes and so much data associated with license management that it is imperative that contract negotiation (and monitoring) is carried out in the most centralised fashion. 

7.  Start Early

The early bird gets the worm! And the key to successful negotiation is to be prepared, be informed and be clear on desired outcomes. 

Start early, because it takes time to mobilise a cross-functional team, gather information for a fact-based discussion and define your strategy.

8. Use Tools

A manual approach to license management is extremely difficult.

Thankfully, IT teams have a number of tools at their disposal like advanced Software Asset Management and License Optimisation tools. These types of tools are able make sense of all this data, manage the complexities and maintain license compliance.

9. Track progress

It’s important to start with a software license management baseline and track your results, so you can demonstrate the cost savings, cost avoidance and license compliance risk reduction.

10.  Publicise Wins

Publicising your successes will help build the credibility of your Software Asset Management program, motivate others and align their efforts.

Article by Hugh Darvall, director, Australia and New Zealand at Flexera Software

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