As businesses expand and evolve, license management might seem like a tedious administrative task, often overlooked as your business grows.
However, neglecting proper license management can have significant financial and legal consequences.
Here, we explore the pitfalls of inadequate license management, the importance of staying compliant, and how implementing an effective license management procedure can save your business from unnecessary costs and complications.
Pitfalls of inadequate license management
One of the primary pitfalls of inadequate license management is the risk of non-compliance with licensing regulations. Many software vendors have strict rules regarding the use of their products, including limitations on the number of users and eligibility criteria for different types of licenses.
For example, the Microsoft A3 and A5 licences and Microsoft 365 for non-profits all have limitations. In addition, if you want to control certain enhanced security features, you have to have all employees on a certain package.
Fines and legal penalties
Failure to adhere to these regulations can result in fines and legal penalties.
For instance, some licenses may have a maximum number of users—Microsoft 365 business basic, standard, and premium all have limits of 300 users each before you have to start moving to different licence types.
Using the software beyond this limit can constitute a breach of contract, or it can stop working. Additionally, educational licenses may restrict commercial use, leading to compliance issues if used outside their intended scope - and Microsoft can force you to do an audit!
Wasting resources with license management
Failing to track licenses effectively can result in wasted resources. Businesses may continue paying for licences for employees who no longer work for them or overlook cost-effective annual licenses in favour of more expensive monthly payment options.
When an employee leaves have you disabled the account and archived them? Have you bought more than is required by the user?
Staying compliant
To ensure compliance and avoid unnecessary expenses, businesses must regularly assess their license needs and usage. This includes determining whether they have the right licenses for their current workforce, reviewing licensing agreements annually, and optimising costs by choosing the most suitable licensing options.
For example, businesses can save money by switching to cost-effective annual licenses instead of opting for costly monthly subscriptions. Take Microsoft's subscription model, for instance. By opting for yearly subscriptions, businesses can benefit from lower per-user costs and avoid the hassle of monthly payments.
Implementing effective license management procedures
Businesses need to establish robust license management procedures to streamline license management and mitigate the risks associated with non-compliance and overspending.
This involves creating profiles for each member of staff, detailing their software requirements, and ensuring that licenses are allocated accordingly.
When we worked for one company that had 200 users on a licence, we sat down with them and pulled together a spreadsheet on what each employee required - it turned out that of 200 staff, they had 100 members of staff who only needed access to email and Teams - which was around £4 per month - whereas about 15 members of staff needed the £60 a month 365.
- During onboarding, ensure the correct licence is assigned to them according to what type of role they are doing.
- Periodically generate reports about what services they are using and if any are not required.
- During offboarding, a procedure needs to be in place to ensure licencing is dealt with correctly.
Reviewing license usage
Line managers play a crucial role in this process, reviewing license usage periodically by checking and making adjustments as necessary to generate reports on usage - however, this is something that can be done by an MSP. We work with clients to regularly review licences to ensure effective management.
By maintaining accurate records of license usage and proactively addressing any discrepancies or issues, businesses can stay compliant and optimise their licensing costs effectively.
Effective license management
Neglecting license management can have serious repercussions for businesses, especially during periods of growth.
By staying vigilant, ensuring compliance, and implementing effective license management procedures, businesses can mitigate risks, avoid unnecessary expenses, and set themselves up for success in the long run.
Your license management
If you would like to find out more about how to implement effective license management procedures please do get in touch with our team.JTNDZGl2JTIwaWQlM0QlMjJzbGlkZUJ1dHRvbiUyMiUyMGNsYXNzJTNEJTIyc2lkZS1idXR0b24lMjIlM0VHZXQlMjBJbiUyMFRvdWNoJTNDJTJGZGl2JTNF
