Top 6 SaaS License Management Best Practices For IT Managers

Your company sets a goal to reduce running costs by 10% by the end of the year. According to the management, there are way too many subscriptions and tools that are being paid for without being properly used. Consequently, as an IT manager, your task is to minimize expenditure on software licenses, renewals, and subscriptions. 

Sounds familiar, right? This is something that every IT manager has to go through every once in a while. 

While cost reduction is a common OKR set by management, a few IT managers are able to achieve it. Research shows that 67% of companies do not have an adequate system in place to manage software licenses. The majority of businesses use Excel spreadsheets to track the different types of software and end up exceeding the allocated budget. The solution is implementing SaaS license management to properly manage licenses and minimize overspending. 

What is SaaS license management?

SaaS license management is a process that involves tracking licenses associated with SaaS applications. The goal of this program is to provide full visibility into how licenses are being used across teams to eliminate inactive subscriptions and terminate expired licenses. 

In this way, software license management helps businesses acquire adequate software for the right people at the right cost– maintaining compliance and minimizing security risks. 

Common SaaS license management struggles for  IT managers 

SaaS license management can be challenging if you are not using the right tools. The majority of IT professionals feel themselves drowning in a sea of spreadsheets with scattered data and not one consolidated record of license expenditure. Some common struggles leading to disrupted license management include:

1. Spreadsheets for license management 

A common way for IT managers to retain license information is through spreadsheets. While this is an easy way to store data, it’s not an effective one. Data accuracy is a big problem with Excel as manually entering data in Excel can result in errors. Then there is the problem of multiple versions of the license spreadsheet being created by anyone who updates it.  

2. Readiness for audits

This is a huge concern for IT managers as non-compliance with regulatory requirements can result in huge fines and penalties. 56% of audits result in additional charges to compensate for under-licensing with amounts exceeding $1 million. Without accurate data, it is impossible to verify the number of licenses corresponding to the number of software being used. 

3. Increasing shadow IT 

Many employees bring their own devices to work, leading to the problem of shadow IT. As these devices are not authorized by the IT admin, there is a possibility of rogue software being installed. This leads to a security risk, putting sensitive business information in a vulnerable state. Most IT managers complain that they are not aware of the software being used on these devices and hence cannot be tracked. 

4. Budget and resource allocation

Budget constraint is a common roadblock for IT managers convincing the management to opt for a license management solution. There is a constant battle between procuring the right software and implementing a solution to manage licenses for Saas applications. 

Automated license management vs Excel spreadsheets: What’s different? 

Finding a tool that fits your license management needs and budget can be challenging. To help you understand the differences between each type of solution, here is a comparison of how Excel and an automated tool can help manage licenses. Take an example of updating a simple license for a software such as Canva. Here is how the two approaches would work:

Excel spreadsheet	Automated license management solution
You create a spreadsheet with Canva licenses acquired by the team.	Your Saas management platform integrates with a MDM device that picks up software details.
Manually add/remove an employee during onboarding and offboarding.	A new license is automatically generated during onboarding of a new employee & de-provisioned upon offboarding.
Reconciling versions of spreadsheets to determine how many licenses to renew.	Real-time data on usage is available for renewal to optimize for better pricing.
No built-in reports available depicting usage, license usage patterns, or costs involved.	Built-in and customized reports to show license costs, available seats, and expiry.

Benefits of SaaS license management and use case examples 

SaaS license management offers complete visibility into IT operations by capturing the different software being used within a network. It helps businesses track usage, billing, and active users for a secure and efficient IT landscape. Here are some benefits of implementing SaaS license management:

1. Software usage visibility 

One of the top concerns for an IT manager is consolidating accurate license data that depicts usage patterns. This problem can be addressed by implementing a software asset management solution that offers license governance. By using such a tool, IT agents can track all software assets through a centralized system. All data regarding number of active licenses, billing, and current users is updated in real-time, facilitating informed decision making and quick accessibility to critical data. 

Use case: Offboarding and onboarding employees 

Software visibility plays a pivotal part in maintaining the accurate number of licenses for employees. For instance, new licenses are only assigned when an employee is onboarded. As soon as an employee is deprovisioned, the license will be removed, eliminating chances of excess or inactive licenses. 

2. License cost management 

With haphazard license management, IT managers find it challenging to control and optimize license costs. As every purchase is documented, it becomes easier to subscribe for better deals that fit the teams’ requirements. A SaaS license management solution tracks usage for every software over time and can help estimate the ROI. Underutilized software can be replaced with better options while overutilized software can help IT admins secure better pricing deals for greater use. 

Use case: Defining team budgets 

When it comes to cost optimization, IT managers need to set a budget for each department to ensure smooth operations. A SaaS license management software provides clear insights to software costs and helps set up annual license budgets required for every team. 

3. Enhanced security and compliance 

All Saas license management tools store data in the cloud, keeping business data safe and secure. IT admins can use the SaaS license management solution to send out alerts anytime a license expires or a renewal is due. This way, software licenses can be kept up to date to meet regulatory requirements, avoiding heavy fines. 

Use case: Mitigating shadow IT risks

In cases of BYOD, your employees can be using unauthorized software on your network. This can create a vulnerable security state, putting sensitive data at risk. A SaaS license management software picks up IP addresses along with user details to alert IT admins of the activity within the IT landscape. In this way, the presence of shadow IT can be controlled to prevent further risks. 

4. Data driven insights  

Say an IT admin needs to pull up a report showing the number of active licenses over time across different teams. This data is easily available within a SaaS license management tool through reports and analytics. These reports are based on real-time data, can be used to eliminate software waste and plan innovative procurement, spending money only where necessary. 

Use case: Controlled scalability 

As a business grows, it acquires more software to cope with its growing workforce. It is quite possible to overcommit for resources without in-depth information regarding budgets, costs, and usage. A SaaS management system with built-in analytics provides a baseline for future scalability and ability to take informed decisions for growth. 

Saas Software License Management Best Practices 

A SaaS license management tool helps IT managers optimize costs, plan smart procurement, and eliminate software waste. Achieving efficiency in the IT landscape requires training to follow certain best practices. Let’s discuss some tips to ensure software license optimization:

1. Create SaaS license inventory 

The first step to ensuring accurate license tracking is to generate a comprehensive software inventory list. Understand the structure of software licensing in your organization. Gather critical details including:

• How many licenses are being used?
• Which employees are authorized to use certain licenses?
• Verify presence of duplicate licenses?
• Figure out the incidence of shadow IT or unauthorized software 
• Estimate costs involved for procurement, maintenance, and service 

2. Set up relevant roles 

When setting up a strategy for SaaS license management, it is important to define clear roles to help teams understand the workflows. Some of the common roles while implementing a SaaS license solution are:

• IT administrators: These roles are usually in charge of the SaaS application, which provides access to add and remove users. They can grant and revoke license permissions whenever required. This is usually a dedicated IT person who oversees asset distribution. 
• Saas license approver: Approve and review license requests received within a department. Justify license requests to align with goals and objectives. Usually, team leads who are in charge of team OKRs. 
• Saas user: The end user for the license with varying levels of access depending on the role governed by the IT admin. 

3. Configure reminders 

With a large number of licenses in the Saas management system, it is common for IT managers to lose track of renewals and subscriptions. Automate the process and set up reminders for X number of days prior to license expiry. Similarly set up reminders for maintenance of any bugs to ensure smooth running of operations. 

Software for managing licenses?
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4. Schedule regular audits

Software license audits help mitigate compliance risks, uphold security and optimize allocation of resources. In this way, IT managers discover the actual number of licenses being used and eliminate redundant or obsolete licenses from records. Doing so leads to efficient budget allocation, saving costs and maximizing operational efficiency.  

5. Organize renewals and contract negotiations

Organizing renewals to ensure they are sorted well before time gives IT admins a chance to negotiate better deals in the following ways: 

• Paying for real-time license usage: With managing everything in a timely manner, the number of licenses can be re-assessed to calculate actual usage and propose better contract terms to minimize costs or expand scope. 

• Improved license ROI: Regular assessments of vendor and contract terms enable IT admins to optimize license budgets and improve the overall value achieved through Saas management. 

6. Integrate SaaS management with the existing IT ecosystem

It is important to have the SaaS license management platform work in tandem with the rest of the IT infrastructure. The majority of IT asset management tools offer license governance for seamless IT operations. For instance, integration with an ITAM solution can provide updated asset lists with provisioned users to align software usage at all times. In addition to this, pronouncement and maintenance can both be managed at the same platform without having to switch back and forth. This saves time and effort – optimizing Sass license management. 

Drive successful SaaS License management with ITAM 

Dedicating a central platform for all your critical IT assets is a powerhouse for your business. Solutions such as AssetSonar offer Software Asset Management to track licenses, plan procurement, schedule maintenance, and set up robust cyber security practices in place. 

All license registration within the system is automated with regular alerts sent out for organized renewals. Other than this, IT admins can effortlessly run reports on license costs to drive contract negotiations and secure better price points. With advanced SaaS management tools, businesses can achieve their license management KPIs, improve productivity and cut unnecessary costs.