Stop burning budget: Cost-focused software asset management best practices

Is your software budget spiraling out of control? You are not alone. For many organizations, software licensing is the second-largest IT expense after personnel. Yet, studies consistently show that a significant portion of this software—sometimes up to 30%—is “shelfware”: licenses that are paid for but rarely, if ever, used.

In an economic climate where every dollar counts, software asset optimization is the quickest way to reclaim wasted spend. By shifting your focus from “compliance” to “efficiency,” you can turn your software portfolio from a cost center into a lean, optimized engine. Here are the cost-centric software asset management best practices you need to implement immediately.

1. Reclaim idle licenses (The “Harvesting” Strategy)

The fastest way to cut costs is to stop buying new licenses and start using the ones you already have more efficiently. This is done through “license harvesting.”

Many users open an application—say, a distinct engineering tool like AutoCAD or MATLAB—and then leave it running in the background while they attend meetings or go for lunch. Technically, they are “using” the license, preventing others from accessing it and artificially inflating your demand.

• The Best Practice: Implement a system that monitors “active” vs. “idle” time. If a process has been idle for a set period (e.g., 45 minutes), the system should save the user’s work and gracefully close the application, returning the license to the pool. This simple automation can increase license availability by 20-40%, negating the need for costly new purchases.

2. Optimize SaaS subscriptions

Cloud spending is often a “black hole” in the budget. The ease of signing up for SaaS (Software as a Service) means subscriptions proliferate across the organization unchecked. This “SaaS sprawl” leads to redundant tools and paying for premium tiers that users don’t need.

• The Best Practice: You need to verify the value of your subscriptions, not just their existence. Monitor login frequency and feature usage. If a user hasn’t logged into a paid tool like Salesforce or LinkedIn Sales Navigator in 90 days, that subscription should be automatically flagged for cancellation or downgrading.

3. Implement Accurate Chargebacks

When software costs are buried in a central IT budget, department heads have no incentive to be frugal. They will ask for every tool available “just in case.”

• The Best Practice: Implement a chargeback or showback model. By tracking exactly who uses which license and for how long, you can bill specific departments or projects for their consumption. When managers see the bill for that expensive simulation software, they become much more diligent about ensuring their teams are only using what they truly need.

4. Invest in a smart license management solution

To execute these cost-saving measures, you need granular data that spreadsheets simply cannot provide. Investing in OpenLM is a crucial best practice for organizations looking to maximize value, especially those with expensive engineering software. OpenLM currently supports the highest number of engineering licenses (90+), which are often the most expensive assets in a portfolio.

OpenLM’s Process Monitoring feature is the gold standard for license harvesting. It doesn’t just check if an app is open; it monitors the CPU and I/O usage of the specific process.

• Automated Reclamation: OpenLM can be configured to automatically release a license after a defined idle time. This directly addresses the problem of wasted licenses, ensuring they are available for other users who are actually working.
  
• Granular Insights: By monitoring individual Dynamic Link Libraries (DLLs), OpenLM can tell you which specific features or add-ons of a large application are being used. This allows you to negotiate better contracts, stripping away expensive add-ons that your team never touches.

The Subscription Optimizer

For the cloud side of your house, OpenLM’s Subscription Optimizer is a game-changer. It combines intelligent automation with machine learning to manage SaaS licenses.

• Proactive Reassignment: It identifies unused or underutilized licenses and reclaims them. For example, it can reassign a license from a user who hasn’t logged in for weeks to a new user who needs access now.
  
• Machine Learning: It uses algorithms to assess the probability of a user needing a license, ensuring optimal distribution and preventing wasted spend on inactive subscriptions.

Maximizing ROI with ServiceNow Integration

The integration of OpenLM with ServiceNow (or partners like License Dashboard) is where the financial magic happens. The OpenLM ServiceNow Connector allows finance and IT teams to view real-time license usage data directly within the ServiceNow interface.

This unified view enables:

• Smarter Renewals: You can walk into vendor negotiations armed with data: “We have 100 licenses, but OpenLM shows we never use more than 75 concurrent sessions. We want to reduce our renewal count.”
• Cost Allocation: With OpenLM’s “Projects” feature syncing to ServiceNow, you can accurately attribute software costs to specific cost centers or projects, simplifying budgeting and ensuring accountability.
  
• Maximized ROI: By aligning your entitlements in ServiceNow with the actual usage data from OpenLM, you ensure you are getting the absolute maximum return on every dollar spent on software.

Frequently Asked Questions (FAQ)

How does software asset management save money?

It saves money by identifying unused software (shelfware) that can be cancelled, optimizing license types (e.g., floating vs. named), and preventing audit fines.

What is license harvesting?

License harvesting is the automated process of identifying idle or unused software installations and removing them or releasing the license back to the pool for others to use.

How does SAM help with SaaS costs?

SAM tools monitor user login activity and feature usage to identify subscriptions that are inactive or underutilized, allowing IT to cancel or downgrade them.

What is a chargeback model?

A system where the costs of IT services (like software licenses) are charged back to the specific department or project that uses them, promoting accountability.

What tools are best for cost optimization?

Tools like OpenLM are best for optimizing engineering and specialized licenses via active agent harvesting, while tools like ServiceNow are excellent for managing the financial lifecycle of general assets.