What Are The Key Challenges In SaaS License Management?

SaaS license management is a way to keep track of all its SaaS licenses in the organization. It is a part of the software asset management (SAM) process and aims to give more visibility into SaaS vendor relationships. However, when a business uses thousands of SaaS apps, tracking the licenses can take time, leading to several challenges in the overall license management process.  

With SaaS license management, it's easy to keep track of license activity, manage contracts, and ensure renewals go as smoothly as possible. It shifts IT and procurement from a reactive, centralized strategy to a proactive, insight-driven one. It helps your business take ownership, be flexible, see what's happening, and hold SaaS vendors accountable.  

When companies take license subscriptions instead of acquiring ownership, they don't have to worry about software upgrades or pay for them. This makes licensing a cost-effective and more accessible option for businesses. 

This article will walk you through some of the key challenges that organizations face with SaaS license management and how you can solve them.

3 Challenges in SaaS License Management & Ways To Overcome Them

The need to track and manage the process for both new and old SaaS applications calls for more. Here are the critical challenges faced in SaaS license management due to less visibility in the organization's SaaS stack.

1. Underutilization of SaaS licenses

Companies usually need to plan before acquiring licenses and end up with several licenses. Unfortunately, with the number of other responsibilities tracking these licenses gets overlooked, and many of these tools sit in the stack unused for a long time. This leads to SaaS spend that the organization may need to be made aware of while regularly losing a portion of its yearly or monthly budget. 

A few common examples of underutilization of licenses are

• Some product licenses are used once a month by every user.

• There are tools purchased for a specific project at a particular time, and after a time, you forget it or assume that the subscription has already been terminated.

• You may pay for 200 users, but only 100 employees utilize the product. 

At times the licenses are bought and hardly ever used, even if they were considered crucial at the time of purchase, and due to no active users, the IT unit stops managing these tools. IT then forget to revoke the employees when they leave while still paying for these inactive licenses and simultaneously inviting threat into the organization. 

When there is no quality management for users, it leads to excessive users, even if some require deprovisioning. This is an expense load in case the tool's plan is based on per user basis. At times when new tools are introduced, older ones are abandoned. 

Therefore, several licenses used by previous employees keep draining your pockets. Also, the subscriptions for most of the tools are automatically billed, which makes overlooking the license management even worse. 

Evaluate SaaS license utilization

One of the safety measures that can be followed is to create efficient and proactive strategies for license management and utilization. This has to be applied for every small purchase to ensure that SaaS purchases are made through the procurement unit or after approval from the right decision-makers. 

There are also cases when only some of the users exploit the application equally; some might be making the most out of the subscription, while others might not be using it at all or have even left the organization. 

Using a SaaS management tool, a business can make valuable decisions for deprovisioning inactive users, calculate the actual total license and remove all the underutilized features and accesses. 

To measure the license utilization, you can also create a complete list of software expenditures for transparency of the total cost. This requires data and analytics features; using this type of breakdown method, the IT department can easily track license usage reports and eliminate all needless subscriptions. 

Tracking and managing SaaS is a cost-effective method in the long run, as it helps the organization keep an eye on its overall spending. 

2. Unintended auto-renewal of SaaS licenses

Companies purchase several SaaS apps every time there is a requirement that leads to renewal issues, as these tools are bought separately at different times. Many tools alert about upcoming renewals, but only some applications do that. In addition, it is necessary to track renewals and their deadlines, as most of the tools have an auto subscription. 

This disorganization leads to unnecessary spending for no longer required licenses or situations when the delay induces negotiating prices. 

Keeping this in mind, you must also understand that tracking SaaS can get confusing as it happens throughout the year at different times. Some vendors might remind you of the renewals while others may not; this results in settling terms and prices and re-evaluating the team's needs. Overspending is one of the most significant risks when you neglect tracking SaaS renewals. You can do substantial budget planning for an entire year with no room for error and spend more without your knowledge if you fail to track these renewals. 

Set reminders for SaaS renewals

An organization consists of several tools and licenses, and with so many responsibilities and renewals in hand, it gets challenging to keep all the tasks in mind. Just like setting reminders for meetings, license renewals, maintenance, and approvals also need reminders that notify through emails, calendars, or other mediums of your or the vendor's choice. 

Reminders are significant to track these critical renewal dates so you stay caught up in license and compliance management. There are SaaS management tools that send alerts from time to time as the date approaches for license renewals; however, you may require to set these reminders manually for notifications. 

Automating these reminders is one of the best ways to keep yourself updated whenever it's time for application management, tool approvals, and license renewals. 

3. Overlapping SaaS subscriptions due to employee purchases

The fact that SaaS tools are easy to access has some drawbacks for businesses, and SaaS duplicate subscription is one of them. This happens when employees buy a license for a tool that another employee in the same company has already signed up for.

Some employees or teams could buy SaaS licenses one at a time and miss out on any enterprise-level discounts that might be available. Individual teams can also buy SaaS apps that may serve the same purpose as another team. This can cause duplicate work and make it harder for teams to work together.

Because of this, a buyer will likely know that the company has previously subscribed to a favourably priced enterprise license with many accessible seats still available. Unfortunately, due to this, there are a lot of duplicate subscriptions, each of which has a larger per-user price tag, and the total cost of using SaaS soon adds up.

Identify & eliminate redundant licenses

Find out which applications serve the same purpose and eliminate them. The best SaaS management tools can put different products into different categories. This helps find spending that is duplicated or not needed. In addition, once you can see your software licenses by category, it's easy to see if your organization has more than one license that does the same thing. 

For example, if you have enterprise licenses for three video conferencing apps and two email automation apps, you have found easy ways to cut waste from your technology supply chain.

You'll need to look over your SaaS contracts and see how many subscriptions you've bought. Then, ensure that the number of subscriptions you buy matches the number of new users. 

Sometimes, the contract may need to be changed or made more significant to include new users. Before you get there, you should carefully look at how applications are used. There are often subscriptions that need to be used. New users can utilize that.

The best way to keep track of all this information is to make a SaaS catalogue that helps manage the technology already being used. Think about every descriptor, such as the vendor's name, the product's name, the version, the number of licenses, the type of license, the names of the users, and the department they work in. 

How Zluri Helps in SaaS License Management?

License management needs to be a top business priority. The IT team should make sure that there are transparent processes and procedures to follow. It becomes a regular part of the business if everyone is kept up to date and the right tools are in place. 

Zluri is a SaaS management platform that offers solutions for IT teams to discover, optimize, manage and secure SaaS applications. These capabilities include renewal monitoring, application cost optimization, and application utilization. Hence, it helps you manage your SaaS license well; thus, compliance requirements will never be a problem for your organization.

With Zluri, you can easily monitor all the SaaS applications and associated licenses.

Zluri's SaaS Renewal Calendar 

The Zluri license module offers extensive information on various license types, including subscriptions, contracts, and perpetual licenses. In addition, you are given information such as the quantity and pricing of each app, which enables you to make better judgments by comparing various applications and their licenses. 

The license module gives additional information, including the total number of licenses each user possesses, the date on which the user's license will need to be renewed, the license type, the cost, and the payment method. In a nutshell, Zluri provides IT teams with increased control and visibility over the SaaS applications and licenses they manage.

Moreover, you can obtain and monitor information regarding the vendors and contracts associated with each license.

Zluri will send you a notification in advance of any impending payments or contract renewals, providing you ample opportunity to evaluate whether or not you actually require the application.

For contracts, you get notifications 30, 15, and 1 day ahead of time. For payments, you get alerts for 7 days and 1 day. You can also set custom alerts to prioritise high-value contracts.