By Vincent Smyth, General Manager & VP EMEA, Flexera Software

The growth in cloud-based software services, as well as virtual environments, is increasing the licencing complexity of today’s software purchase. Coupled with this is the rising number of audits, with some of the larger software vendors such as Microsoft, Adobe, and Oracle becoming frequent auditors. Indeed in a recent Flexera Software/IDC Report 63 percent of those surveyed had been audited by their software vendors in the last 18-24 months. The money as a result of these audits (usually unbudgeted) extracted from companies as a result, stings.

So how can businesses prepare themselves for the inevitable, here’s our top 10 tips for a best practice approach to achieving compliance success:

1. Don’t boil the ocean

The 80 / 20 rule applies especially to software licence management. There are usually a handful of software vendors who provide critical (and usually expensive) software for your organisation. Even within a given vendor’s software portfolio, it is generally a subset of their products that demand the majority of focus. So when setting up software licence management processes, tools and systems – focus on the "high rollers". The “me too” applications will can be addressed later.

2. Build licence management into the fabric of your business

Unless licence management is part of your normal business processes, it will not be attended to. Licence management highlights the difference between important and urgent: it is always the former but seldom the latter (unless you are facing an unbudgeted seven figure software audit liability!). Left unattended, it will largely be ignored. Therefore, licence management must be included within signed off procedures to ensure license compliance is maintained and software costs are controlled.

3. Let each software vendor know you are serious about licence compliance

One of the most disruptive activities for any organisation is to be audited by a software vendor. You can capitalise on the work you put into licence management by letting the vendor know how seriously you are taking the subject and demonstrating that you have control of your software estate. Organisations that implement best practice software asset management and license optimisation processes and have the tools in place to help automate these processes are in the best position to defend themselves against a software audit and in many cases avoid them altogether.

4. Adopt a “continuous compliance” strategy

Too often enterprises don’t look closely enough at their compliance position until and unless they are faced with a vendor audit. By this time, it is often too late, because already there will have been one if not several instances uncovered in which the organisation fell out of compliance. And it’s these infractions that lead to unbudgeted true up fees. Best practices dictate that organisations should always be “audit-ready,” and they can accomplish this by adopting a “Continuous Compliance” strategy. This involves putting into place the necessary people, processes and automation capable of tracking software license inventory, usage data and contract terms – and reconciling this data to provide an ongoing license compliance position. A Software License Optimisation solution, for instance, can present this compliance report within a management dashboard that will show compliance position and areas of risk on a continual basis. Achieving continual compliance is the only way organisations can take the surprise and sting out of inevitable vendor audits.

5. Involve Senior Management

You will need cooperation from numerous parts of the organisation to implement an effective licensce management program. Unless you have the "buy-in" from senior management you run the risk of having to implement a flawed process due to lack of cooperation from certain areas.

6. Centralize License Management

There are many business processes and so much data associated with licence management that it is imperative that contract negotiation (and monitoring) is carried out in the most centralised fashion. The single characteristic that differentiates the best-in-class enterprises in this space is that they have consolidated and centralised their enterprise-wide licensing activities.

7. Start Early

Don’t wait until the last minute to begin preparations for a contract negotiation with a major vendor. The key to successful negotiation is to be prepared, be informed and be clear on desired outcomes. To mobilise a cross-functional team, gather information for a fact-based discussion and define a strategy that will meet business objectives can often take several months of careful, detailed work.

8. Use Tools

License management is a challenge due to the many complexities involved—licensing, IT environment, and organisational complexities, to name a few. There are numerous contracts, vendors, applications, sites and licence owners that result in a plethora of data. Unless advanced software asset management and license optimization tools are used, it will be impossible for organisations to make sense of all this data, automate key processes, manage the complexities and maintain license compliance.

9. Track progress

As I noted above, it can be easy for licence management to lose priority and focus in your organisation. So unless you start with a baseline and track your results, you will be unable to demonstrate the cost savings, cost avoidance and license compliance risk reduction that accrue from these activities.

10. Publicise wins

Publicising your successes will help build the credibility of your software asset and licence management program, motivate others and align their efforts. This is an important part of building a mature program over time. And the most mature licence management programs have the greatest return on investment.