Guest blog by Michael Foley, IT Procurement Professional.
Mismanagement of software can be an expensive mistake. But it is a mistake that can be easily avoided with the right focus. Here are 3 simple actions I advise you take to ensure effective and efficient management of an organisation’s software
#1: Only buy what you need.
This sounds obvious; however, suppliers will try and entice you to buy more. It could be in the form of buying an extra number of licenses to hit the next tier and lower the average license cost or perhaps advertising “special discounts” for additions.
But really, you’ll just be paying for licences that you don’t really need. It may seem like a good deal and something the organisation could benefit from but stop and think – is this software really needed?
#2: Manage software usage.
After your software purchase, you need to undertake a regular review of software utilisation. This has two benefits. Firstly, a review will identify if the company is compliant in its usage and avoid any potential audit/non-compliant issues. These can be costly and will be an un-budgeted spend.
Secondly, if there is a reduction in license usage this can be factored into any supplier discussions or renewals lowering the overall cost to the company. There are SAM tools that can help facilitate the tracking of this. Alternatively, suppliers will often provide usage metrics either through a portal or as a report. It is better to work proactively with the supplier to right size the requirement rather than it being flagged to you.
#3: Build flexibility into the contract.
Always look to ensure that the contract can flex with the requirements of the company. Pre-negotiate rates for a future increase in possible licenses. If you know more will be needed in the future, factor in the increased volumes, but don’t set time constraints.
Conversely, allow for a reduction in licenses Are there any seasonal variations where the required numbers go up and down on a regular basis? Also consider if a contract clause is required for divestiture or acquisition. Make sure you are future-proofing for any big changes to the organisation without any subsequent financial impact.
Michael has over 17 years of procurement experience. His experience is predominantly in IT, with additional experience in Marketing, HR, Professional Services and direct materials. He has worked globally at senior levels of procurement in financial services, travel, life sciences, pharmaceuticals, construction, automotive and logistics. He has experience working for a range of high profile companies including Visa Europe, TUI Travel, Balfour Beatty, FIAT and Deutsche Post.