Compliance budget surprises

compliance cost licensing

Software licensing can be a large and sometimes unexpected IT expense. It affects your IT budget, so what can you do to keep costs down?

How Software Licensing Affects IT Budgets recently published research into the top 5 expenses that kill IT budgets. Nearly half of all respondents said that software licensing is the largest unexpected cost to unhappily surprise corporate IT departments.

This is interesting, since it seems that companies are aware of the high cost of ailing software license practices. According to Computing’s research, 34% of respondents indicated licensing as one of the top IT expenses. At the same time, however, that high cost is unexpected because many organizations reserve little to no budget to manage licenses and deploy processes, train technical staff, or hire companies like B-lay to calculate the impact of their architectural choices and help maximize the (financial) benefits of their software assets.

In the 16 years we have been assisting corporate IT departments, we are always astonished about how seldom  clients attempt to objectively measure the impact of software licensing, especially given the regular implementation of new systems and the high cost of non-compliance and inefficiency. Only occasionally organizations ask us to help this way, usually after a software vendor has announced or performed a software audit. Unfortunately by that time, most of the damage has already been done.

On top of that, many companies focus heavily on testing new software but neglect to measure the impact on licensing, e.g. did they actually build what they planned to build, and how does this affect software compliance and license management?

With software costs exceeding the cost of hardware these days, it is vital to have a complete and accurate understanding. Many unexpected software licensing costs can be prevented or decreased by implementing small and cheap actions as part of your regular IT operation. Having an accurate cost assessment process in place is the first step to lower cost, and improved efficiency and effectiveness.

Think of it this way. Before building a house, architects send the blueprint and details to a calculation firm to ensure that the plan and all materials are up to code, which is critical since correcting the foundation after it is built, is very expensive. Software license management companies like B-lay often fill the same role as the calculation firm, by challenging your design, analyzing your choices, and assessing the time and monetary cost. With a complete assessment, software licensing doesn’t have to be an IT budget buster.

This article was published on 17-08-2013