Having the right software is essential to keeping operations running smoothly in all industries but managing software investments effectively requires a robust IT asset management (ITAM) strategy — one that spans from initial procurement to renewal and beyond. Yet, as software licensing becomes increasingly complex, many organisations are struggling to keep up, often falling into the same avoidable traps.
At Synapse360, we’ve worked with thousands of businesses to refine and elevate their ITAM strategies, and through our experience, we’ve identified five common mistakes that companies make when it comes to software licensing. Let’s dive in so you can steer clear of these pitfalls.
1. Failing to Develop a Comprehensive IT Asset Management Plan
Purchasing and renewing software licenses without a solid plan is a costly mistake. Organisations often overestimate their needs, leading to unnecessary expenses, or underestimate them, risking compliance issues.
To avoid this:
· Start by auditing your current software usage.
· Engage with departments across your organisation to understand their specific needs.
· Strategically align your purchases with actual requirements.
When it’s time to renew, don’t default to a like-for-like contract — this approach often results in overspending. In fact, many businesses end up paying 30% more than necessary by sticking with old agreements. Instead, reassess your needs and renegotiate terms to ensure your licensing matches your requirements.
2. Leaving IT Asset Management to One Person
Managing software licenses has evolved into a multifaceted job. Assigning this responsibility to a single IT manager, as many businesses do, is no longer practical.
With the rise of cloud services and subscription-based software, licensing has grown far too intricate for one person to manage effectively. Overwhelmed IT managers can make costly mistakes, such as purchasing the wrong licenses or mismanaging compliance obligations.
The solution? Build a team. An ITAM team can better manage the demands of a dynamic licensing environment, ensuring your organisation remains compliant while maximising value from your software investments.
3. Overlooking the Importance of Budgeting
Software renewals can present unexpected costs, particularly if your organisation assumes it will get the same deal as before. Vendors’ priorities shift, and the broader market can fluctuate — leaving unprepared businesses with inflated renewal costs.
Avoid surprises by:
· Developing a realistic, long-term budget that accounts for potential price changes.
· Reviewing vendor terms and identifying opportunities to optimise costs before renewal negotiations begin.
4.Underestimating Licensing Complexity
Gone are the days of simple perpetual software licenses. Today’s landscape, dominated by Software as a Service (SaaS) models, demands a deeper understanding of licensing agreements.
SaaS brings flexibility and scalability, but it also introduces stricter compliance requirements. Licensing contracts are often packed with nuances that, if misunderstood, can lead to costly penalties.
To navigate this complexity, businesses must prioritise continuous oversight of their software usage and agreements. Regular reviews can ensure your organisation is compliant, while also helping to avoid overpaying for unused licenses.
5. Forgoing Expert Advice
Navigating the intricacies of software licensing can be daunting, especially when each software publisher operates differently. To get the most out of your contracts, specialist knowledge is indispensable.
Unfortunately, hiring full-time licensing experts is expensive, and their expertise is in high demand. Whether it’s understanding the fine print of a Microsoft agreement or optimising a VMware contract, these specialists can help ensure your business gets the best value while remaining compliant.
For most organisations, the best solution is to work with a trusted software consultancy. Partnering with a team of licensing experts gives you access to invaluable insights without the costs of hiring in-house specialists.
End the Licensing Horror with Synapse360
At Synapse360, we leverage over 25 years of expertise to simplify the complexity of IT asset management. Our experienced team of consultants, architects, engineers, and advisors works as an extension of your IT department, delivering custom-built solutions tailored to your business needs.
Whether you’re migrating to new systems, optimising your software portfolio, or navigating complex licensing agreements, we’re here to ensure your IT strategy aligns seamlessly with your goals.
Avoid the horrors of poor licensing management. Let Synapse360 handle the complexities, so you can focus on what matters most — driving your business forward.
Contact us today to learn how we can transform your software licensing strategy.
