Tips to help improve your organization’s license purchases and save on costs

The cost of doing business can sometimes exceed financial budgets with the quest to find ways to reduce expenditure further. However, mid-term budget reviews with the hope of cutting down on costs usually do not yield the expected results and yet in some instances, add up to further expenditure. One of your sure strategies is planning well from the beginning of the financial year. 

If your organization is seeking avenues to cut costs and improve budget allocations, one viable approach is to optimize your licensing purchases. By taking a strategic approach to procurement, equipping yourself with more detailed knowledge of your licensing obligations and the software licensing market and seeking the guidance of an independent software licensing expert, you can unlock significant savings and enhance operational efficiency.  

Our team of experts have over the years studied the space and understand the various licensing models available by identifying the most appropriate ones that can meet your organization’s needs.  

In this information sharing piece, we hope you are able to appreciate the various ways to save on your organization’s license purchases. However, reach out for further engagement if need be. Now let’s get into the real deal!   

1. Conduct a thorough analysis of your software requirements:

Usage patterns, and growth projections can enable you to select the most relevant licensing model and negotiate fair terms with LSP/vendors. 

Vendors and LSP’s are usually open to negotiation, and you can often get better deals if you know how to go about it skillfully. Your negotiation should not only be about beating down the cost or price as it may yield little results. Rather negotiate based on background information you have, for example about what new product Microsoft is hoping to have customers sign into and what you know the LSP stands to lose if your deal does not go through.

2. Consider buying bulk licenses:

After your analysis, with projections based on your needs, you can consider buying bulk licenses because of: 

  • Associated Discount: This comes as a good move for your vendor as it reduces administrative costs and time. For an independent expert also, this will help focus the negotiation move with Microsoft and help get a substantial (large) discount because of the number of users or devices involved. 
  • Predictable budgeting: Bulk purchasing can help your organization better predict your software licensing costs over time. Rather than having to worry about licensing costs on an ad hoc basis, your organization can plan for a specific amount of licensing costs each year, which can help with budgeting and forecasting. 
  • Simplified licensing management: With bulk licensing, your organization can manage your software licenses purchase and use more easily. You only need to worry about a single license agreement, rather than managing multiple agreements for individual licenses/users. This can simplify license tracking, renewals, and compliance. 

3. Adopt a centralized licensing management system:

This can assist you streamline your licensing operations and reduce the risk of compliance problems with license agreements. This system should encompass the tracking of license installations, usage, and expiration dates.  

The key questions are: 

  • Do you know out of the many management systems, which one will best work in your peculiar case? 
  • What will you track and how would you go about it?  
  • Are you in the position financially, to hire or perhaps train an individual to man this system?  
  • Are you able to distinguish between false reporting and facts? 

Our experts, if you engage us, will have all the above and more questions answered when we offer our services to your organization. Having real-time visibility into your organization’s license inventory can prevent unnecessary purchases and ensure that you are getting full value from your license investments.  

Again, our experts can help you identify unused or underutilized licenses, helping you to reduce your software costs by reallocating licenses or eliminating unused licenses.  

4. Consider vendor management as a way of optimizing license purchases:

It is essential you maintain a transparent and constructive relationship with your software providers. Engaging in regular communication and negotiation will help you obtain favorable prices and licensing terms. This may involve bundling licenses from multiple vendors and consolidating maintenance agreements to achieve more cost-effective solutions.  

Also spend time to be abreast with the latest happenings in the IT/software/licensing world so you can reach out to your vendor to enquire how the new add-on features can be of an advantage to your organization.  

5. Consider subscription-based licenses:

Subscription-based licenses are an option to save on costs if your organization requires changing software needs. With a subscription-based license: 

  • You pay a monthly or annual fee for the software and can add or remove licenses as needed. This can be more cost-effective than purchasing perpetual licenses.  
  • Access to the latest versions: As a subscriber you have access to the latest version of the software, which can include new features, bug fixes, and security updates. This usually will come with no additional cost.  
  • Flexible payment options: Subscription-based licensing often offers flexible payment options, such as monthly or yearly payments, making it easier for you to manage budgets and cash flow.  
  • Scalability: Subscription-based licensing can be more flexible in terms of scalability. As your user needs grow, you can easily add more licenses or users without having to purchase additional perpetual licenses. 

Achieving sustainable cost-savings and improving the overall management of your licensing assets require some amount of painstaking work and a strategic approach. You most of the time will have to take proactive measures based on analysis and forecast to curb costs before it gets out of hand and takes you by surprise.  

You may invest in a licensing management framework with the hope of leveraging your knowledge of licensing models and vendors, but how comprehensive and well-structured are you doing this?   

What we have shared with you is only a tip of the intensive work that needs to be done to get you the ultimate result; save on cost. 

Let our experts assist you effectively today!

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