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In recent times, software firms have changed from a sales model to a long-term licensing model in recent years, resulting in a shift in expense structure. Software pricing on a long-term basis can quickly accumulate to a significant expense, placing extra pressure on an already constrained IT budget.
Organisations have had to fine-tune their operations in light of the global pandemic’s economic uncertainty and seek ways to reduce costs. It is critical to ensure any cost reduction does not impede future business growth. One way to do this is to look at how to reduce licensing costs, which has the benefit of saving money and improving the efficiency of your systems.
Often licensing is overlooked by businesses because costs and licence structures can be difficult to comprehend. After a certain amount of time, the feeds aren’t as important as when the licence was originally purchased, and businesses have accepted them as a necessary expense.
Let’s take a look at how to reduce licencing costs for your enterprise:
Auditing existing software
Undertaking a thorough software audit is the first step in lowering licensing costs. It is recommended audits are done frequently enough to ensure you are maximising your current licensing position.
To conduct a software audit, you’ll want to start by collecting data from your system. This can be as simple as logging into your software and taking notes of how often you use it and what tasks you perform on a daily basis. You can also set up automated tasks so that certain data is entered when your software is used.
Once you identify which applications are critical and necessary for your organisation to function, you can put together a plan to upgrade or replace the less important or necessary software to reduce software licensing costs.
A thorough software audit provides detailed information about how each piece of software is used, allowing you to make smarter purchasing or upgrading decisions.
It’s critical to ensure that the value of the application you’re interested in deploying isn’t outweighed by the cost of maintaining it. We’ve seen companies crippled with the cost of maintaining programs that continue to rise year after year. If you have a good handle on the software you use, you can also align the cost of maintenance to match your actual use.
It is good practice to check the type of software licences for agreements that require a certain annual expenditure. If all of the allocated software licences aren’t used, future savings may be missed. To determine how much software is required across the enterprise, an IT department may assess existing software licence utilisation. Using more of the software product’s functionality can increase utilisation and save future licence expenditures.
It’s also worth checking to see if any updates to your software have included automatic performance boosts or new features that may be unnecessary and therefore wasted money. You may save a lot of money by removing or disabling certain features or plugins in your software that your company doesn’t need.
Negotiate better value
Reduce licence costs by negotiating contracts with vendors or partners to change to a fixed fee or to pay for service. This will reduce your costs significantly, as you will be paying for licences based on numbers of users, rather than company-wide when the software isn’t necessary for all employees.
It’s also worth checking to see if there are volume license programs for any business or enterprise software your organisation uses, particularly if it’s crucial for all employees. You may get a significantly discounted rate if you purchase a set volume.
Leverage cloud computing
Cloud computing resources can save you money on hardware, software, and licence renewal fees by reducing both your capital and operating costs. Software as a service such as Microsoft 365 can be used to access cloud-based resources which enable remote and hybrid work models efficiently, and are subscription-based, so your enterprise spend forecast is predictable.
Start saving on your license costs with the IT experts
Create efficiency and enhance productivity, while spending less with smart and innovative investments and power your digital transformation. The types of software license your business needs may change over time, so let the IT experts at INTELLIWORX help you utilise your software licences in the most effective way.