Software license and maintenance costs account for nearly one-third of IT budgets. So we’re not exaggerating when we say that your company’s software is already a big investment. If you break the terms of software licenses, you could face retroactive charges, fines, or even criminal charges.
How do you maintain software license compliance over a company with multiple departments using a range of different software products? Here are 5 major challenges for managing software license compliance, and how to meet those challenges.
1. When Employees or Departments Make Ad Hoc Purchases
When employees make ad hoc purchases, your company buys software licenses in a piecemeal manner, which can cause several types of problems. For example, if employees in multiple, totally separate departments independently buy the same software individually, you could be spending far more than you would if you bought a volume license for the software. It’s not always easy to forecast who will need what software, but if you already have a bunch of separate software licenses, it may be worthwhile to work with the vendor to see if they could all be brought together under a more cost-effective volume license. The first step to doing this is knowing exactly what software is installed on every device.
2. Lack of a Central Repository and Lack of Inter-Departmental Communication
Your company should have a central location for proof of software licenses so that they’re readily accessible. This can be a real lifesaver in the event of a software license audit. Having all software license information in a central repository makes it easier to track installation, use, and license renewal dates. A central repository also helps make up for lack of communication between departments, because a central software license management system can “see” what software is being used across all departments, even if the departments themselves are unaware of other departments using the same software.
3. Not Thinking Strategically About Software Licenses
Simply ordering software as needed without thinking ahead can be costly. Here’s an example. Suppose that right now a department needs a suite of software by a major supplier, like Microsoft, so you make the purchase. Six months later, it turns out that your company also needs a different software suite from the same supplier, so you make that purchase. Had you thought ahead when the first need arose, you could have strategically ordered software under a “bundled” license that would have cost less over the long term.
4. Not Realizing That With Licensing, Rules May Change at Any Time
Licensing rules change frequently. It’s not easy to stay abreast of changing vendor rules and regulations, but it’s easier if your company has a central software license repository and a comprehensive tracking system to keep up with all licenses. If a licensing rule changes and nobody realizes it, you could find your company out of compliance or face a costly audit from a vendor. Tracking licensing rule changes may be a pain, but it can save major hassles later on.
5. Not Making License Compliance Part of an Overall IT Asset Management Program
Software license compliance should be part of a comprehensive program of IT asset management. A powerful asset management solution contains information about every piece of hardware in your company, every piece of software installed on it, when licenses for that software expire, and to whom or which department the hardware is assigned. IT assets consist of both hardware and software, and a good IT asset management program makes tracking this voluminous and complex information far easier. Investing in a comprehensive IT asset management solution can pay off big when it comes to minimizing costs associated with software licenses.