Here's How You Can Cut Costs on Software or on Hardware Support / Maintenance

Why are auto-renewal licenses and support / maintenance agreements an incredibly costly problem?

A majority of very typical enterprises:

• Have no trained individual responsible for closely monitoring auto-renewal agreements.
  
• Simply have no idea which auto-renewal licenses and agreements they have present in their technology environments.
  
• Do not know when the auto-renewal takes place.
• Do not know the process for canceling the auto-renewal.
• Have no process for determining if they should cancel the agreement.
• Try to purchase and implement costly and overly complex supplier-specific solutions or try to implement just-as-costly generic global standards.
  
• Have no executive support within the enterprise to extend the responsibility and authority to take action to reduce costs in a strategic manner.
• Honestly believe that they can purchase a silver-bullet solution that will resolve all their problems in one fell swoop.
  

Real World - Most auto-renewal agreements are crafted in such a manner that, if you do not cancel precisely in accordance with the terms and conditions, you will still have to pay for another year. (Yes, even if you tried to cancel.)

How do you prevent your company from being hammered by auto-renewal software or hardware support and maintenance agreement sharp practices?

• If this initiative isn't important to executive management, it isn't going to happen. If you are an owner / board member / executive manager, it is absolutely vital for you to get behind this individual asset management process. The savings can be enormous--with little or no negative impact on operations.
• Ensure that one of your people becomes trained in the methods and processes for closely monitoring the terms and conditions of licenses and agreements. No, you do not necessarily need a lawyer for this--an advanced clerical worker or paralegal could manage these on a day to day basis. (We do not teach law or profess to provide legal advice. We do, however, provide basic common sense methods for understanding the day to day requirements of technology agreements.)
• Ensure that your designated asset manager has the infrastructure present to gain access to the operational information required to effectively manage these materials.
• Ensure that all auto-renewal dates are clearly documented as well as the lead time for notification.
• Ensure that a VERY clear documentation process is in place to identify the precise dates and processes required to cancel an auto-renewal.
• Ensure that the asset manager has a credible and measurable process for evaluating the need to continue or cancel a given agreement.
• Ensure that you complete the simple, cost effective, and common sense ground work prior to considering new software, standards, or teams of consultant experts.
• Oh... And there IS no silver bullet solution. You're just gonna have to apply brain power.
  

There's more but you should get the idea. Remember, you have a choice in implementing technology asset management initiatives.

• You can choose to use the expensive-to-purchase and expensive-to-implement supplier-hype solutions involving costly international standards.

OR

• You can use a plain old normal, common sense, and a cost effective phased approach that makes sense for your unique environment. Once this ground work is in place, you can move on to more complex options.
  

I suggest you use option #2.