A recent Flexera Software survey, prepared jointly with IDC, finds that a significant proportion of enterprises' software spend is associated with unused software, commonly referred to as 'shelfware'. More than half (56%) of the enterprises polled said that 11% or more of their software spend in the last 12 months is associated with unused software — clearly wasted expenditure.
An earlier survey, confirmed that software over-use, or non-compliance - is also creating waste in the form of software licence audit 'true-up' (software used, but not paid for) penalties.
While corporations are leveraging software to improve efficiency, shelfware and non-compliant use are IT blind spots. With software licences and maintenance typically representing one third of overall IT budgets, if optimised, corporations can save up to 25% of their software spend by eliminating shelfware and non-compliant software use.
Below is a list of the most common mistakes organisations make:
- Making ad hoc purchases - Lack of controls over software purchases is common and leads to over-buying when end-users buy software directly, rather than purchasing centrally under a volume purchase agreement.
- Not fully leveraging Global Enterprise Agreements- Over-buying occurs when, for example, software is purchased under a regional Agreement when the same software is available under a corporate global Enterprise Agreement.
- Not tracking installation and use - By not tracking installations of software and its usage, organisations unnecessarily pay maintenance.
- Not tracking and analysing detailed usage data for certain types of licences-Not optimising concurrent and named user licences due to lack of analysis to determine the optimal number and type for each user respectively, results in over-buying.
- Not tracking renewal dates - Failing to keep track of software licence agreements and renewal dates makes organisations vulnerable to lapses in maintenance, which can prove costly.
- Lack of communication between departments - IT operations often don't work with procurement to ensure that software is installed and used in accordance with the entitlements, causing licence compliance issues.
- Not purchasing maintenance at the right time - The right time to purchase maintenance is when organisations are expecting to upgrade and a new release of the software is expected during the term of the maintenance agreement.
- Not ascertaining strategic requirements - Lack of a corporate policy to define/manage approved products and standardise results in support cost and curtails the benefits of economies of scale.
- Not applying product use rights - Product use rights define how software licences can be consumed. Without applying these, enterprises are unable to optimise licences and accurately ascertain if indeed more licences are required or not.
In light of these common mistakes, and the significant risk and cost associated with them, the following best practices are recommended for any organisation seeking to minimise software spend and maximise use of existing licences:
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