Software License Management: What Is It and Why Does It Matter?
Gartner analysts have projected that worldwide IT spending is projected to total $4.2 trillion in 2021, up 8.6% from what was spent in 2020, according to the latest forecast. Analysts expect worldwide IT spending to reach $4.5 trillion in 2022. Enterprise software purchasing represents the highest-growing category of IT spending in 2021, with 13.2 percent growth.
As businesses and organizations continue to experience digital transformation, it is no surprise that more organizations are spending more money on software. However, how much of that money is being used properly?
A previous study that covered 149 companies, 16 industries, and 4.6 million users to gain clear insight into the cost of enterprise software waste determined that 38 percent of software licenses that are purchased by businesses and organizations are deployed to a desktop but not used or used infrequently. The findings discovered the amount of enterprise software waste in the United States totaled $28 billion, or $247 per user.
Businesses and organizations that fail to properly use software they have purchased may find themselves under scrutiny by software vendors for noncompliance. When discussing software license agreements (SLAs), noncompliance happens for a variety of reasons, including license overuse. If your business or organization is ever placed under the spotlight due to concerns of noncompliance, it can become a major and expensive disturbance to your regular business operations.
If your business or organization wants to consistently comply with software licensing agreements and successfully manage software-related purchases, your organization needs to implement a software license management (SLM) solution. If your organization is currently managing your software licenses through complex spreadsheets, this process can certainly be overwhelming and time-consuming. Thankfully, there are less complex solutions for software license management.
What is Software License Management?
Software license management is the process of tracking and documenting software used in an organization. The software licensing management process allows software vendors to accurately track how software is being used. Effective software license management can be used to improve revenue by assuring that licenses are being used appropriately, and the licenses are being used on the correct terms. Generally, software license management is one part of a larger software asset management (SAM) strategy.
Software license management helps businesses and organizations determine how many licenses need to be purchased, and ensures that each license is deployed to impactful areas in the organization. Deployment of software licenses can be completed through consistent usage monitoring of the software through software license management. At a later stage in the software life cycle, organizations can use software license management resources to determine their current compliance status with software license agreements.
An effective software license management consists of processes and tools that businesses and organizations can implement to effectively manage software licenses throughout the software’s life cycle. Organizations can break up their software license management implementation into several stages. Software license management plays a critical role in ensuring that every stage of the life cycle is efficient and effective.
For businesses and organizations of all sizes, efficient software license management is a necessity. Working towards the implementation of software license management best practices will allow you to identify a comprehensive software inventory. As a result, workplace teams will not only be better informed but will allow organizations to operate within legal guidelines.
Why Does Software License Management Matter?
While efficient and effective software license management is indeed an attainable goal, many organizations are not sure where to begin or which software license management strategy will produce the best results. Software installation, software configurations, and software monitoring will enable organizations to minimize software expenses due to duplicate software license purchases or fines and penalties for being under licensed. A software license management solution can be used to create metrics that can be used to make the best software licensing decisions.
Successful software license management will allow organizations to do the following:
- Organize and manage software licenses and inventory
- Document the procurement processes
- Inventory all systems
- Determine software usage
- Measure the number of licenses that are needed per software usage
In today’s ever-changing and fast-paced workplace, software licensing can pose a major challenge. Some organizations will decide to shift control from one main department to several smaller departments, which could offer some flexibility, but this can also lead to unnecessary costs.
To avoid unnecessary costs, organizations can use a software license management solution. This solution can lead to organizations making more impactful decisions about licensing and purchasing. One of the most important steps to software licensing management is identifying the software installed in your network. Software license management will give organizations a clear view of all the existing commercial and non-commercial software.
Make Software License Management a Priority
Every organization needs an effective software license management strategy. An effective software management strategy is not just a good approach, but it is great business. The proper steps should be established so that every employee will be aware of the steps that should be taken in various situations.
Every team should have a clear understanding of the software license management strategy. When everyone within an organization is on the same page, software license management will become an essential part of business operations. When you can keep up with where you stand with software compliance, you will have the peace of mind you need. You will no longer have to worry about fines and penalties resulting from an audit because you have a software license management strategy that works.
Baroan Technologies can help you keep track of software licensing with an effective software license management process. Once an effective software license management plan is in place and you are operating in compliance, you will be able to manage, track, and create reports on your software licenses. With a software license management solution, you can continue leading your organization with ease and with the peace of mind that your organization is operating efficiently.
Contact Baroan Technologies today and find out how we can help you simplify your software license management process.