DIGITALISATION, SAAS AND WEB APPLICATIONS – THE LICENCE MANAGER MUST ACT!

3. August 2021/Volker Löffler- von Strünk

The digitalisation wave has long since reached licence management. In this context, there is increasing criticism from the specialist departments that IT and licence management are slowing down digitisation projects with their cumbersome organisation and inflexible processes and are only driving up internal costs unnecessarily.

If possible, it is said, many companies would like to take matters into their own hands and have already done so.

Access to the web is available and user administration can be taken care of independently.

Manufacturers and providers also give the impression that their solutions can be set up and operated quickly, transparently and cost-effectively. No reference is made to “risks and side effects”.

But it’s not that simple. The spectre of shadow IT is haunting us.

PITFALLS AND REQUIREMENTS FOR THE ORGANISATION

Draw your organisation’s attention to the following “pitfalls” and requirements for ongoing operations and make it clear what risks your company faces if individual departments go through it alone.

Time pitfall

It is noticeable that enormous time pressure is usually built up in connection with corresponding projects. Superficially, this pressure is created by the requesting department, but it is often generated by the manufacturers.

“Sign up now, our offer is only valid until 31.07.xxxx!” The reason given is the manufacturer’s upcoming financial ‘end of the year’ or a promo that expires at the end of the month.

Don’t let yourself be put under pressure! If software is used without approval and testing procedures, without an assessment of the solution by IT Security and Data Privacy, points of attack for malware arise and the protection of sensitive data cannot be guaranteed.

The use of specialist departments’ own budgets for SaaS solutions or, even worse, billing via the company credit card lead to a lack of transparency regarding the company’s IT costs.

Dimensioning pitfall

Take the necessary time to determine the licence requirements and the equipment of the required technologies.

Don’t get ahead of yourself when it comes to licence requirements. Dig deep, the purchasing department will thank you for it.

As soon as the manufacturer has an approximate picture of your quantitative licence requirements, the discount scales come into play. As a rule, the actual demand for a new solution cannot always be determined precisely.

Everyone realises this, but manufacturers are often not interested in reliable dimensioning. They are quick to say: “If you only order xxx additional licences, we can offer you an even more interesting price scale”.

Dimensioning also includes determining the technical performance characteristics, such as line capacities and availability requirements. It is therefore essential to integrate your IT infrastructure. And yes, this may result in additional costs for your company, which software manufacturers like to reduce to “existing costs”.

The pitfall of contract terms

Longer term = more favourable conditions. That is understandable. However, we are usually dealing with unestablished solutions whose benefits, acceptance and demand have yet to be demonstrated during operation. There is no experience to fall back on.

If possible, avoid longer terms. If necessary, a gradual adjustment of the term(s) and conditions would make sense. A customer-orientated manufacturer will find a solution here.

Technology pitfall

We are familiar with this phenomenon from other software solutions. Software is installed and set up. In the administrator console, a functionality or licence type is activated by mistake or ignorance, the use of which is not part of the contractual agreement. Experience shows: Manufacturers do not prevent this possibility.

As SaaS software is operated in the manufacturer’s infrastructure, the manufacturer has direct access to all configurations and uses of the software, meaning that the errors described will lead directly to additional claims.

It should go without saying that software is not provided “just like that”. IT and licence management are familiar with these requirements and will be happy to advise you.

The pitfall of contract amendments

“Our parent company is based in the USA. They are tough when it comes to contract amendments, nothing is possible there!”

How often have we heard that? The reality is: something is always possible. Contrary to all announcements, contract amendments are now also possible with the major manufacturers.

But where is it worth agreeing something separately that deviates from the standard contract?

We have already discussed the topics of dimensioning and running times. Phase or phased plans deserve to be evaluated and negotiated separately.

Terms and conditions for acquisitions during the year are another major topic. Please also consider harmonisation of terms or subsequent integration of group companies.

The following scenario: Mrs Schmidt changes department, Mr Meier takes over her duties. The required licence is therefore transferred to Mr Schmidt. Now there are manufacturers who require an additional licence for this business transaction. Mrs Schmidt’s licence can no longer be used! This is not acceptable.

WHAT ELSE NEEDS TO BE CONSIDERED DURING OPERATION

A regular internal contract review. Proactively together with those responsible in the user departments and licence management. Do not wait until the agreed system measurement so that the provider does not have more rights than necessary.

Where do we stand? Acquired licences versus actual demand? Who is using their licences and to what extent? Of course, this should also be used to identify the need for additional licences.

HOW DO I CREATE TRANSPARENCY IN THE SAAS/WEB ENVIRONMENT?

SaaS and web applications: An increasing number of these products are not procured and managed centrally by IT and therefore escape licence management monitoring. Most licence managers are therefore unable to provide information when it comes to the question of what is used where and to what extent. How can the urgently needed transparency be created?

But there are now technical solutions for this too.

The Author

Volker Löffler– von Strünk
Co-Founder of SAMtoa GmbH

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DIGITALISATION, SAAS AND WEB APPLICATIONS – THE LICENCE MANAGER MUST ACT!

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