A handy checklist for Software Contract Renewals

A Software Contract Renewal can be a complicated process, but it’s much easier when you clearly understand what your company needs.

Read on to learn how you can ensure a seamless software renewal process.

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 3: Compare existing use to supply

Now that you know what your contracts say and what your employees are using, it’s time to figure out whether supply and demand are balanced. Do you have too many software licenses, out-of-date entitlements, or the wrong software altogether?
If you have unused licenses, choose one of these options:

  • Save money by cancelling the subscription (and/or maintenance contract).
  • Reassign the license to an employee who will use it.
Checklist and Control Spend Software Contract Renewal

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Step 4: Think about your future plans for this software

Is your company planning to upgrade, increase/reduce, or decommission the departments or equipment that use this software? Consider your company’s long-term strategy when signing a new software contract. Especially be aware of:

Upgrades:

  • If you plan to upgrade any product or equipment that uses the software in the short term, you might want to delay updating your software. Then you can buy new licenses after the upgrade. Note that this might require a shift to cloud-based solutions.
  • Consider dropping your maintenance plan if you plan to move to an updated software version in the near future. But before you do this, make sure you’re willing to give up your current contract and use rights because ending your maintenance plan may count as a break in the contract.

Decommissioning

  • Don’t give up your software licenses or maintenance contracts too quickly. Changes to strategy or delays (including unforeseen ones like the recent pandemic) can change or cancel decommissioning plans. But once decommissioning is complete, make sure you’re no longer paying for unused access.

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.

 

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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.

 

 

How can Blackbelt XP Support help you?

Our licensing optimization experts can guide you through the entire process: from understanding your current position to optimizing your software spending and protecting your investment. Let us be your partner and negotiate on your behalf so you can focus on the work you do best. We are wholly independent experts, so you can be sure we’ll get the best deal for your company.

Contact us today for a free, no-obligation consultation.

 

 

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