A handy checklist for Software Contract Renewals

Step 1. Understand your existing contracts

Before you can decide what you need, you need to be clear about what you have. For each software program identify:

Assessing use at your company can reduce software costs, but that requires precise data. So make sure your data is:

• When does your software contract expire?
• Do you have a maintenance contract?
• When did you last make a payment (for software and/or maintenance)?
• Do you understand your contract terms and conditions? Were any non-standard terms negotiated in the past?

Also be aware of entitlements. Unlike a license that specifies a number of installations, an entitlement specifies the machines and/or users to which those licenses are assigned. You may need to change them during contract renewal if your staff or equipment set up has changed.

Step 2. Gather data about software use

Who is using the software now, and who might want to do so in the future? Besides a simple user inventory, consider:

• Does the software have any non-human users? Many vendors require licenses for users like chatbots or IoT devices.
• How are software and cloud services being accessed? By whom?
• Are your current software programs the best fit for the work your staff is doing?

Remember too that it’s crucial to identify under-utilization. Paying for unused software is like throwing money away.

Finally, make sure you take a long-term view when gathering data. Some products may not be used every month or even every six months, but they might be critical to annual processes. And consider that some users might be on an extended leave of absence but still require software access during or after that leave.

Step 5: Understand support needs

No one wants to pay too much for software support but cutting support your employees need doesn’t make good business sense. Giving them the right support options can reduce downtime, increase productivity, and improve customer satisfaction. Sometimes increasing support levels (with associated increased renewal costs) can actually improve your bottom line.

Before you make any changes, talk to the teams that use and manage the software about how they are using the current support:

• Are there any issues with the current support offering?
• How are they using it? Quantify measures like number or timing of support calls.
• What does the business need? Some departments might need 24/7 support and a one-hour response time, while others may be fine with support during business hours and an eight-hour response time.

And make sure you understand the options:

• What support levels does your software vendor offer?
• Can different levels be applied to different licenses or contracts?
• If support needs vary by system, can support licenses be reassigned?

As a possible next step, carefully negotiated software license agreements are a crucial component of your IT organization’s bottom line. We look forward to help and strengthen your negotiation position. With experts of Blackbelt XP in software licensing and dealmakers for every software vendor.

Wondering how to negotiate with your software vendors? Read 10 Tips in the blog about: Software Contract Negotiations.

Step 6: Make recommendations

Once you’ve taken the time to engage with your stakeholders and collect data, you are ready to analyze it and make recommendations about software contract renewals, renegotiations, or cancellations.

But how can you be sure you’re negotiating the best contract? Let our experts at Blackbelt XP negotiate on your behalf. Our contract specialists can help you develop a software roadmap and negotiate for you to ensure the best prices and conditions.