Characteristics of a Successful Software Licensing Program

Licensing is one of those programs where when it's not working well it quickly becomes a top initiative for any CEO.  A poor software licensing program can lead to revenue leakage, operational inefficiencies and customer dissatisfaction. Throw in a highly competitive product, a volatile market climate and many companies are forced to adapt their software licensing policies and strategies. Companies that don't rethink their programs could face reduced profit, loss of valuable market share and could eventually go the way of the woolly mammoth.  

Implement a successful software licensing program and you will have the necessary business tools to improve customer experience, optimize operational processes and maximize revenues.  Having worked with several software vendors and intelligent device manufactures over the years, successful licensing programs have several characteristics in common.

  1. Agile Approach

    An agile approach is by far the most important aspect of successful software licensing management.  Corporate business goals and market climate shift rapidly requiring an adaptive methodology to compete.  Programs that can quickly support new operational flows and innovative license models such as usage and cloud based metrics are critical.  An agile framework that allows the business to immediately address their "hottest licensing item" without a major IT project is a "must have" for any licensing program.  

  2. Centralized Software License Policy

    A well-defined central license policy is vital to a successful software license program.  A license policy provides a cohesive road map for defining an all-embracing product revenue model.  Mergers and acquisitions only further drive the need for a single company feel, as disparate processes leads to duplication of effort, operational inefficiencies and customer frustration for "solution/package" offerings.

  3. Single Dynamic Software Licensing Platform

    The demands of an agile approach and centralized software license policy mandate that a single "dynamic" licensing platform exist within any license program "worth its salt".  This platform should be license technology agnostic being able to easily consume new ways of licensing.  Developing such a framework from scratch can be a daunting task. The best option would be to leverage an off the shelf product such as FlexNet Embedded which provides an ideal infrastructure to create a "build as you grow" and provides a platform to capture metered license data providing some of the newest, most innovative usage-based license models.

  4. Dedicated Entitlement Management

    An entitlement management program is the loosely coupled but highly cohesive partner to the successful software license program.  Your entitlement management program should be a dedicated system and completely separate from any existing ERP or CRM system.  ERP and CRM systems are dedicated to financial and customer driven responsibilities, respectively, and make poor substitutes to a dedicated entitlement management system.  Entitlement Management for licensing should be a "hub" of all operational activities and license-based business process. 

Next time… "Characteristics of a Successful Entitlement Management Program"

 

Categories: Entitlement Management, General, License Models, Software Licensing

One comment on “Characteristics of a Successful Software Licensing Program

  1. David Mansfield on   # Reply

    While I totally agree with much of your observation about the benefits of usage monitoring I am not sure exactly what you mean by “Your entitlement management program should be a dedicated system and completely separate from any existing ERP or CRM system. ERP and CRM systems are dedicated to financial and customer driven responsibilities, respectively, and make poor substitutes to a dedicated entitlement management system.” The words “completely separate” are very disconcerting. While I understand that most or maybe all ERP and CRM systems do not adequately address entitlement information the SAM “vision” is an all encompassing program that involves everything from the software lifecycle to corporate strategy. To be effective all processes need to communicate with all other facets that affect not only software but also the company’s total financial picture. This includes information from finance, procurement and multiple IT areas from receipt of assets thru retirement. Leaving out links to these vital corporate processes in my opinion is a huge mistake and leaves many holes in the total benefit SAM can to deliver to a company. The operational elements of a SAM program needs to be part of the entire picture of the assets. I have been involved with SAM for a while and over 10 years ago had software usage as one of the elements of our total program. We used it to recover unused licenses, determine project viability, negotiate vendor terms and, in conjunction with other elements, create strategy. It was very effective and helped describe some of the ROI from these processes but to make it all work together it needed to be integrated with other elements from multiple departments to determine total ROI for SAM. Isolating into a silo one process is needed during implementation to make sure it is functions correctly in a company’s environment. In addition it also makes it easier to “quantify” its benefits. However we should never forget the “big picture”. Or maybe I just misunderstood.

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