While enterprise software can help streamline and centralize your business operations, you must ensure you have the correct licenses required to run these solutions.
License management isn’t always easy or straightforward. There are potential issues that could make the process more challenging than it needs to be.
Today, we’re sharing some of the most common enterprise software licensing challenges you may encounter, and how to resolve them.
Why Do Software Licenses Matter?
At its core, enterprise software is a type of intellectual property. To access and use it legally, businesses must establish licensing agreements with authorized third-party vendors.
Each time you sign a licensing agreement, you’re verifying certain rights and responsibilities. Your rights include the ability to use the software as you see fit if you abide by certain guidelines and restrictions. Your responsibilities include keeping up with all licensing costs, including maintenance.
These terms can vary depending on the type of enterprise software you implement, as well as other key factors, such as:
• Software version
• Software edition
• Software vendor
It’s within this software licensing documentation that some companies can run into roadblocks.
Based on the experience of several of our software expert witnesses, we’ve outlined some of the most common problems that can occur:
4 Challenges of Managing ERP Software Licenses
1. Finding and Following the Right Document
When you implement enterprise software, there’s quite a bit of documentation to sort through. This can make it hard to determine exactly which licensing document you should follow.
Well-known vendors, such as Microsoft, publish multiple versions of these documents each year, and you need to make sure you’re working from the most up-to-date and accurate one.
Unless you’re a dedicated software expert, it can be difficult to stay informed on all documents that apply to your software infrastructure. Even if you were to devote hours to this task, it could deeply cut into business productivity.
As a result, many organizations inadvertently move ahead with the wrong documentation. When this happens, a few problems can occur.
First, the company could be under-licensed, without sufficient coverage for the solutions they’re using. Or, they could have the wrong licenses in place altogether.
To avoid these issues, hire a software expert. This expert will know how to keep track of any licensing changes that occur while you’re using the solution. They can also make sure that your company is in full compliance throughout each phase, so you can avoid costly penalties and software litigation.
Contemplating litigation?
We have multiple software expert witnesses available for provision of reports, depositions, and testimonies.
2. Navigating Licensing Metrics
When it’s time to determine how many software licenses you need, there are a few key metrics to follow.
In theory, these calculations should be simple to conduct and easy to scale. Yet, the exact opposite often holds true. Most software companies issue metrics that are difficult to follow. They can also be volatile and hard to compute.
Take the Authorized User metric, for instance. An Authorized User is given access to the software program. The program may be installed on several different computers or servers, and each Authorized User will have simultaneous access to any number of those servers at one time.
While this metric is fairly clear-cut, it gets murky when vendors put their own spin on it.
For example, IBM implemented what’s called a “Concurrent User.” This is a person who is accessing the software program at any certain point in time. In essence, IBM describes this as a floating license that can be used at the same time (concurrently) by a pre-determined number of users.
In addition, there are other license variations available, including FUSSI, which stands for Floating User Single Session Single Install.
When faced with all these options, it’s easy to see how organizations could get confused.
3. Understanding License Restrictions
Even if you can figure out your user metrics, you might still have some confusion or challenges surrounding software restrictions.
Do you know exactly how and where you can use yours? If you plan to virtualize any of your operations, this may be a central discussion.
Some companies, such as Oracle, will not allow users to reduce the number of processor licenses they need, even if they shift some of their processes to the virtual realm. This means that if you’re using any type of Oracle software and decide to virtualize, you’ll still need to increase your license demand.
This is true even if you’re still allocating the same number of cores onto your virtual machines as you’re currently using on the physical platform. In concept, you’re not increasing any part of your technical usage, but the uptick will still cost you.
Before moving ahead with any type of software vendor, it’s important to understand what could happen if you decide to digitize or virtualize any part of your workflows.
4. Managing Licenses Effectively
Without proper license management and oversight in place, it’s common to wind up with too many or too few licenses.
When you have an overabundance, that leads to unnecessary IT spending, which can cut into your budget. Over time, if you don’t track license expenditures, it can significantly hurt your finances.
Inefficient license management can also lead to non-compliance. If you’re found to be working against the terms in your contract, it could result in hefty fines.
The right software experts can help your organization achieve the following goals:
• Properly record and manage software licenses
• Reduce unnecessary IT spending
• Evaluate compliance and audit readiness
Avoid These Enterprise Software Licensing Challenges
Licensing agreements are critical parts of the enterprise software puzzle. While they may be complicated to navigate, you need to ensure you have the right licenses in place before you go live with your solution.
We’ve outlined some of the most common enterprise software licensing challenges you may encounter. However, there are many more potential snares. Our team is here to help you work through them, understand your requirements, and implement your systems successfully.
To learn more, contact our enterprise software consultants below for a free consultation.
