In today’s business world, the majority of software applications are cloud-based, which offers unparalleled convenience, scalability, and accessibility.
However, this shift has also brought about a hidden challenge for many organisations: keeping track of software licences and ensuring you’re only paying for what you need.
With monthly subscriptions, tiered plans, and variable user counts, it’s all too easy to end up overpaying for licences, especially if your headcount has fluctuated.
Hidden Costs in the Cloud
One of the most common issues businesses face is continuing to pay for licences that are no longer necessary. When employees leave or departments are restructured, it’s crucial to ensure their software licences are cancelled or reassigned. These are often small amounts – perhaps just a few pounds per month – but they can quickly add up when spread across multiple platforms and users.
Since many businesses bundle their software costs into one monthly or annual payment, it can be difficult to spot exactly what you’re being charged for.
The smaller charges for unused licences often fly under the radar, especially if they are wrapped up in bulk payments or direct debits. Without careful monitoring, you may find you’re paying for licences long after staff have left the company.
Regular Licence Audits Are Essential
To avoid unnecessary expenditure, it’s important to conduct regular audits of your software licences. One simple but effective solution is to ensure that whenever new staff are onboarded, or when employees leave, their software licences are reviewed and adjusted accordingly.
This means taking the time to check that each licence is assigned to the correct individual, and that the appropriate level of access is being provided. It’s worth keeping a centralised record of who is using which software, so that you can easily manage this process as your team changes.
Are You Using the Right Tier?
Another pitfall for businesses is paying for premium licences when basic ones would suffice. Many software providers offer tiered pricing models, where users can opt for more expensive ‘professional’ or ‘enterprise’ versions of the software, often including advanced features that only a small fraction of the team may need.
For the average user, a basic or mid-level licence will often meet their needs, meaning the extra cost of these premium versions is an unnecessary expense.
Are You in the Correct Price Band?
Some cloud licenses are priced by how many you buy, that usually means the more you buy the lower the cost for each individual license. Suppliers typically have price bands and whilst they should automatically place you in the correct band, it is worth checking especially if your headcount has gone up.
Again, these may seem like relatively small amounts per person, but across an entire team, these costs can multiply into a significant sum. Reviewing the level of licence for each user can save your business a considerable amount over time.
Simple Steps to Cut Costs
- Track your subscriptions: Keep a record of all your software licences and subscriptions, noting the renewal dates and the number of active users. This will make it easier to spot when you are paying for software you no longer need.
- Audit regularly: Conduct a monthly or quarterly audit of your software licences. Compare the number of users with the number of licences and cancel or downgrade any that are no longer necessary.
- Tier check: Ensure that each user has the correct level of access for their needs. If possible, downgrade to a more basic licence to avoid overpaying for features that aren’t being utilised.
- Automate where possible: Some platforms offer the ability to automatically adjust the number of active users. This feature can be invaluable for large teams, helping to ensure you are never paying for more licences than you need.
Final Thoughts
Cloud-based software offers businesses the flexibility and convenience needed to remain competitive, but it also requires vigilance.
Ensuring you have the correct number of licences – and the right tier for each user – is a simple yet often overlooked way to save money. By taking the time to regularly review your software subscriptions, you can avoid the pitfall of paying for licences that your business no longer needs.
Being proactive in managing your software licences will not only help keep costs down but also ensure your organisation is running efficiently with the right tools in place.
If you’ve got questions about your software usage, licenses, or our managed IT services, give the iTEXS team a call today on 01223 834844, we’ll gladly help guide you to ensure you’re paying only for what you need.
