The software renewal checklist: 7 factors to consider

Decisions about software support, maintenance, and subscription renewals are not simply about licensing or cost saving; they are also business decisions about how to get the best possible value out of technology investments. Effective management of your renewals allows you to streamline the process, reducing internal overheads as well as eliminating waste and ensuring that the subscriptions, maintenance, and support you are paying for meet your needs.

To help identify opportunities for savings and maximize your software investments, we’ve identified seven key factors to consider before renewing your agreement. However, make sure that you’ve done the preparation we mentioned in our last post before you start.

The software support, maintenance, and subscription renewal checklist

Once your team is in place, you need to work together through the following checklist.

1. Find your entitlements. It’s important to understand the standard Ts & Cs for the various products, and any non-standard terms that may have been negotiated in the past. These include:

• Details of your last maintenance payment(s) and any purchases made since this date
• Product terms and conditions (current and historic)
• All contracts going to back to the original transaction with the vendor

2. Gather inventory data. This isn’t just about what’s deployed, but also about who is using it – and in some cases, who could potentially use it, regardless of whether they do. Many vendors also require licenses for non-human users such as IoT devices or chatbots and indirect access by third-party applications. You need to know:

• What’s deployed within your environment
• Who (or what) can access software or cloud services, and how they do so

3. Understand your utilization. Once you know what is deployed or available to users, it is important to understand whether (and how) it is being used. In particular, you want to identify software that is under- or unused, and not delivering business value.

4. Compare entitlement to consumption. Only once you have a complete picture of your entitlements and the way in which you are consuming the software, can you compare the two. This is the point at which you can work out whether you have too much software, too little software, or could use what you have in a more efficient way. If there is no license shortfall and a product isn’t being used by an individual, the obvious solution is to either:

• Cancel the subscription (or support and maintenance) making a direct saving, or
• Redeploy the license elsewhere (avoiding additional costs) if there are other users who need it

However, there is also an opportunity to get a broader understanding of how products are being used across the organization and make recommendations to rightsize your contracts.

5. Understand the roadmap for the products covered Are there any plans to upgrade, replace, or decommission any products or systems using the products? This will determine strategy when it comes to maintaining perpetual licenses.

• Decommissioning – Maintenance should not be cancelled too early during a major project, as changes to strategy, delays, or acts of god (such as the current pandemic) may mean that changes are delayed or cancelled. Likewise, subscriptions should not be cancelled until decommissioning is complete.
• Upgrades – If upgrades are planned in the immediate future, then maintenance should be continued. If these plans are longer term, consider dropping maintenance and paying back-maintenance at a later date (if contractually permitted), or buying new licenses when the upgrade goes ahead (this is likely to necessitate a move to cloud-based solutions or subscription licensing as a minimum). Importantly, if you want to retain current contractual and use rights, then maintenance should be paid to ensure there is no break in the contract.

6. Understand support requirements. In many cases, it is possible to decrease support costs. But in others, increasing support levels may be the best option. While this may increase the renewal cost, it could reduce downtime and improve productivity along with end-user and customer satisfaction, having a net-positive balance sheet impact. Talk to the teams who support and manage the systems that use the products to understand:

• The current support offering and any issues with it
• How it is used (number of support calls, timing of calls, etc.)
• Business needs, based on criticality (do you need 24/7 support and a 1-hour response time, or working hours and
• an 8-hour response time?)
• Does the vendor offer different support levels?
• Does the vendor allow different support levels to be applied to different licenses, order documents, or contracts?
• If support requirements vary by system, can licenses be reassigned to reflect needs better?

7. Make recommendations. It is important not to act on this information without engaging stakeholders. For example, some products may show as unused in a 30- or 90-day usage report but may only be needed for year-end activities. Likewise, users may be on extended leave of absence for parental leave, sickness, or sabbatical and still need assigned licenses for keep-in-touch activities. Make sure that your process allows time to engage with business and IT stakeholders before coming to a decision.

For more information on how SHI can help manage your renewals, reach out to your SHI Account Executive.