Six Tips for Optimizing License Spend and Avoiding Audit Risk
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Recognising that a significant portion of organizations believe they are not investing enough in SAM, it's crucial to prioritize this area. Implementing robust SAM practices involves regularly reviewing software licenses and usage, establishing processes to track licenses, and ensuring compliance with licensing agreements. These practices can provide valuable insights into your software portfolio, leading to cost optimisation and better preparedness for vendor audits. Additionally, SAM tools can automate the tracking and monitoring of license utilization, streamlining the optimisation process and providing valuable insights into license spend.
Managing software usage and spend requires a comprehensive, ongoing approach. By fostering collaboration between IT, finance, and procurement departments, organizations can develop a holistic understanding of software consumption patterns. Regular reviews of software spend, usage patterns, and vendor agreements can help identify potential cost-saving opportunities and mitigate risks, ensuring optimal cost efficiency. It's important to view software asset management not as a one-time activity but as a continual process of optimization, adapting strategies as organizational needs evolve.
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With the growing use of cloud-based solutions, understanding the associated costs—including potential hidden fees—is essential. This knowledge can assist in accurate cost forecasting and budgeting, leading to more effective management of cloud expenditure. As our poll results indicated, forecasting costs, particularly for cloud-based solutions, is a significant challenge for organizations, making it a crucial area for improvement.
Vendor audits are increasingly common, and maintaining compliance is crucial. Conducting regular internal audits and keeping accurate, up-to-date records of software licenses and usage can help prepare for vendor audits, prevent unbudgeted software exposure, and protect the organization from audit-related risks. Proactive measures, such as regular reviews of software licenses and usage, can help in managing these costs and mitigating the risk of financial surprises.
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When entering into licensing agreements, negotiate terms that align with your organization's needs. Exploring volume licensing and enterprise agreements can also offer potential cost-saving opportunities. Effective contract management—including accurate tracking of renewal dates—ensures that organizations only pay for the licenses they need. With the direct impact of contract renewals on software spend, enhancing contract management capabilities can lead to potential cost savings and avoidance of compliance issues.
