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Reducing your licencing costs

The economic uncertainty resulting from the global pandemic has forced organisations to finely tune their operations and look for ways to cut costs. It is important to ensure any cost savings don’t end up preventing future business growth or adapting to new working environments. 

One way businesses can save money is by reducing software licence fees. While being cost-effective in the short and long term, doing so can also improve the value and efficiency of software systems. 

Read on for some ways to reduce the financial burden of your licencing costs:

Undertake a software audit

The first step in reducing licensing costs is to conduct a careful and in-depth software audit. Besides understanding the software currently in use by your business, you will be able to determine which software is critical to your company’s day to day operations and what is not.  

Once you’ve identified which applications are critical and necessary for the company to function, you can put together a plan to upgrade or replace the less important or necessary software, thereby reducing software licensing costs.

Beyond cost savings, an in-depth audit provides comprehensive information about how each piece of software is utilised, which allows you to make smarter decisions about upgrading or purchasing new software.

When considering new software, keep these tips in mind:

  • Check if the software is being used and is necessary, and if it is still supported by the vendor. If it is being used but isn’t necessary, consider removing access or uninstalling it
  • Evaluate the cost of new software both upfront and over the expected lifespan when looking at total costs. 
  • Consider the costs of implementation, support and maintenance when looking at the cost of software. 

Optimise your existing licenses

Many organisations have software license agreements with vendors that require a certain annual spend, and if all of the allocated software licences aren’t used, future savings may be missed. IT departments can assess existing software licence utilisation to determine how much software is needed across the business. By using more of the software’s functionality, the company can increase utilisation and decrease future licence spending. 

It is also wise to check to see if any updates to your software have included automatic performance boosts or new features that may not be needed and therefore are a wasted expense. It is also possible to save a significant amount of money by removing or turning off inactive user accounts. You may also save a lot of money by uninstalling or turning off certain features or plugins in your software that your company does not need. 

reduce software costs

Negotiate a better deal

Contracts with vendors or partners may be negotiated to change to a fixed fee or pay for service. This can reduce costs significantly, as you may be paying a large cost for licences that are only used by a small number of employees. 

You might also look for partners that offer a certain percentage discount for software maintenance, implementation or upgrades. It is also worth checking to see if there are volume license programs for any business or enterprise software your organisation uses, especially if it is essential for all employees. You can often get a significantly discounted rate if you commit to buying a certain volume. 

Consider cloud computing

Cloud software solutions such as Microsoft 365 can provide significant cost savings to businesses of all sizes. Infrastructure, equipment, and software costs can all be lowered by using cloud services. Instead of purchasing and installing software on their system, users can access and use cloud-based software via the internet using software-as-a-service (SaaS). 

Using cloud computing resources rather than investing in expensive hardware, software, and licence renewal fees, you can reduce both your capital and operating costs. 

Take control of your licencing costs

Make smarter, more innovative investments in the future by making smart choices and reducing your software licensing costs. By modernising your IT, your organisation can better monitor software costs and simplify your licensing process. INTELLIWORX IT consultants can provide the best options to use your software licences and help your business succeed. 

Shane Maher

We passionately work on the IT Infrastructure of mid-tier businesses and support MSPs into cloud services. I have over 17 years of commercial experience that includes supporting and managing IT systems, developing infrastructure solutions, both onsite & in the cloud.

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