Preparing for software renewals
About 10 years ago, after it became clear to me that many organizations were failing to manage software support and maintenance renewals effectively, I carried out research and developed processes for managing support and maintenance renewals that are still relevant today. I found that, in many organizations, no one individual has full visibility of the information needed to make renewal decisions or an understanding of the process required to get it.
While many renewals are (relatively) low value, the costs soon add up … and some costs are considerable. Furthermore, the complexity created by a purchasing history spanning decades can make them daunting to investigate. For many people, paying the bill when it arrives is still the path of least resistance.
Ten years later, support, maintenance, software subscriptions, and even SaaS payments are often automatically processed – in some cases after the software has been scheduled for sunsetting, or even been decommissioned. Even for software still in use, without a robust and consistent renewals management process, easy savings opportunities may be overlooked.
Given this, we’ve put together a series of blog posts to help you manage your support and maintenance agreements or software subscriptions more effectively. By having a clear process, engaged stakeholders, and the right data, you can make the process both less onerous and more cost effective.
Before you start
As with many detailed tasks that are often overlooked, the secret to making the right decisions about your renewals is in the preparation. If you’re going to be proactive in your approach and maximize the value from the process you need to:
- Plot all renewals on a calendar. Significant opportunities for short- and long-term cost savings exist, but they require advance planning. To start:
- List the renewals you know about by anniversary date.
- Identify vendors with multiple renewal dates. These will be more complex as you should co-terminate the agreements to a single date, pro-rating payments accordingly. (Note: We don’t recommend consolidating agreements without a great deal of detailed analysis, as this can result in the loss of previously negotiated contractual concessions and modified use rights that may have more value than any reduction in renewal costs.)
- Confirm cancellation periods. Once you have a calendar, you need to confirm the cancellation period. This is usually three months prior to the renewal date (but it can be up to a year). This is the date by which a decision on renewal, cancellation, or variation must be made, and (if relevant) any changes negotiated. By this stage, you’ll be aware that your focus isn’t on immediate renewals, but on those due in around six months’ time.
- Identify stakeholders. For most contracts, the decisions aren’t down to a single individual. Multiple software products may be involved, supporting different systems and business processes. Systems owners, business stakeholders, budget holders, application managers, technology strategy, procurement, finance, IT asset managers, and other parties may need to be involved. You should communicate your plans, process, and what you will need from the stakeholders so that expectations are set, and they are engaged in the process from the outset.
Once you have your renewals schedule set out and an idea of the volume of renewals you need to manage (working on the assumption that you will find more as you go), you can work out resource requirements (data, people, etc.) and prioritization.
While you may be keen to start with the low-hanging fruit to demonstrate immediate value, by gathering this information you will reduce the risk of making tactical decisions without all the information you need. Good preparation can help safeguard against short-term savings being made that result in increased costs in the long term.
For more information on how SHI can help manage your renewals, reach out to your SHI Account Executive.