Getting a Handle on Software License and Asset Management
In recent years, organizations have taken significant steps to digitize their operations to become more efficient and agile. However, this has also led them to onboard an abundance of new software, some of which may not be entirely necessary.
Managing all these IT assets and software licenses can be a challenge for procurement professionals who are often stuck between end-users and the finance department. Procurement is expected to balance demands for new software with budget limitations and strategic objectives, and it can be difficult to say "No."
In this article, we will explore how procurement leaders can get a handle on their software license and asset management strategies while keeping both end-users and the finance department happy.
Understand the Software Market
By understanding the software licensing landscape and developing a comprehensive asset management strategy, procurement professionals can take control of their software spend.
Software vendors often approach the negotiating table in a one-sided manner. They'll set pricing based on their understanding of the market and demand for their product, but they may believe that there are no other products like theirs. This gives them an edge in negotiations.
In reality, there may be alternatives to the products offered by big market software vendors. In some cases, features not in use within the organization's existing software stack may be able to take the place of new software acquisitions.
In this respect, it pays for procurement professionals to understand the full capabilities of their existing software purchases before moving on to new software.
Know Your Organization's Strategic Needs
It is important to have a clear understanding of what software your organization needs to operate effectively. Work with key stakeholders across departments to get a comprehensive understanding of what software is required.
For example, a new piece of software may promise to bring efficiency to a single department, but it may not be worth the price point if it can't be used by the rest of the organization. All software and asset acquisitions must align with overarching goals, and they shouldn't be purchased just for the sake of having them.
Look Beyond the Big-Ticket Products
Often, procurement professionals focus exclusively on expensive software licenses when developing their asset management strategy. However, it's important to remember that there are many low-cost and even free software applications that can be just as beneficial to an organization.
Many organizations opt to purchase software because they are excited about specific features. Instead of paying for a large software offering just to obtain a single capability, consider searching for plug-ins or integrations that can work with your existing software suite and are less expensive to buy and maintain.
Keep an Eye on the Future
Technology is constantly evolving, and software that is popular today may be outdated in a few years. When developing your asset management strategy, be sure to consider future needs and trends to avoid overspending on software that will quickly become obsolete.
Search for software vendors that are making regular updates to their product for free and that offer real-time support without the need for paid, tiered access. These are more likely to become strategic partners in the future, as their products are better suited to withstand changes in the industry.
Managing Expectations in Software and Asset Acquisition
It can be challenging to manage expectations when new and exciting software comes onto the market. However, every asset the organization acquires must serve a larger purpose than pleasing a handful of your end-users. Technology decisions must align with the organization's strategic goals and support the company's long-term objectives.
To learn more about how your organization can manage its assets and software, don't miss the ProcureCon IT Sourcing event happening from July 18th to July 19th at the Westin Copley Place in Boston, Massachusetts.
Download the agenda today.