Software renewals are a great opportunity to review your goals and to determine the best path forward for your company. Decisions about software support, maintenance, and renewals are not simply about licensing or cost saving; they are also business decisions. Effective management of your renewals allows you to renegotiate your contract for more favorable terms or to get out of an agreement that no longer works for your organization.
The following seven-step process helps you determine which pathway to take in any given scenario and prepares you for renegotiation conversations should you decide to renew.
Conduct a thorough analysis of your current license utilization
Software licenses may be unused or underutilized. Analyzing current utilization gives you a baseline understanding of how your license entitlement stacks up to actual usage. If you no longer require these features, you may be able to reduce your overall expenditure.
Audit your support logs
Look into the tickets you’ve logged with the vendor’s support team and analyze:
- 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?
If a number of tickets remain unresolved or you’re unhappy with the level of service you’ve been receiving, this may be a tick in the “find a new vendor” column.
Re-read your existing contract
As your renewal date approaches, take the opportunity to thoroughly read through your existing software contract. 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.
Look for terms that perhaps no longer apply to your organization or that might restrict your usage in the future. Look for clauses like this and highlight any required changes in your renewal negotiation conversation.
Assess current pricing competitiveness
Software license renewal is the perfect opportunity to assess whether you’re still getting a good deal or if the market has shifted since you originally signed the agreement. Over the course of a three-year contract, markets can quickly become saturated with new competitors, driving pricing down. You may find that your once-competitive agreement is now not so cost-effective.
Reassess your current needs for the software
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. If, however, you still need the tool, consider your more specific requirements as they relate to the product’s features.
- Which functions do you require?
- Which do you have access to that you no longer need?
- Which do you not have access to that you wish you did?
The answers to these questions will help you determine whether a plan upgrade or downgrade might be appropriate.
Consider future growth initiatives and other changes
Before renewing any license agreements, consider how your current growth initiatives and other company changes might impact your decision to renew. Having this information in mind will help you negotiate a more appropriate contract whereby you could potentially receive a lower price per seat.
Prepare for renewal negotiations
At this point, you’ll be able to determine whether or not you’d like to renew the contract. If you are renewing, consider how you might negotiate a better deal for the new agreement.
Conversation points you can use to drive the negotiation include:
- Upgrading to a higher-tiered plan
- Upping your user count
- Past issues with customer support
- Pricing competitiveness (based on your market analysis)
- Changes in purchasing style (monthly/quarterly/annual)
If you want to optimize your organizational processes and ensure maximum value is driven back to the business, you need a comprehensive SaaS renewal management process in place. Contact us today to discuss how vendor management software can save you time, money, and stress!