Software is a significant and often growing portion of AEC firm costs. Changes to software costs can have a big impact on profitability. There are 3 main activities that should be part of every Finance and IT leader’s 2018 license planning.
1. Reducing the cost of licensing and maintenance to the lowest possible level
Reducing license costs requires understanding how your licenses are being used today, and matching that use to your current entitlements. For metered licenses, that means knowing both your peak use per application, and how many licenses aren’t being productively used at peak time. For non-metered desktop licenses, you need to know your true inventory and who is using what.
Once you have collected this information, you can determine how many licenses to stop paying support on. Reduce costs even further by moving specialty desktop licenses to where they are needed on a per project basis, maximizing how much each license is used. Phil Hames, Director of the Business Software Centre Limited, says “You need an accurate count and the locations of the installs for each software application along with version and supplier details. Even if you have a reasonable inventory of applications and their host devices it is worth running a check with a third party tool to establish the accuracy of your existing records” (Hames, 2017).
2. Implementing a process to identify and schedule future licenses
Planning for the future begins after your current licensing and maintenance costs (#1) are optimized. By analyzing typical metered license use for your existing employees, you can look at predicted hiring plans, and map specialty license growth to the number of employees in each position type.
Research shows that the number one top business development initiative of AEC firms is “earlier identification of opportunities and requirements” (Deltek, 2017). So consider implementing a standard process to move new standalone licenses to where they are needed. Or try applying a license request process to temporarily move licenses to user needs, rather than automatically providing licenses to new employees. It might be a little more work initially, but it has an out-size impact on profitability.
3. Implementing a process to recover license costs
Recovering license costs may be a completely new consideration for the AEC space. But think about it. Software is a billable asset. Specialty applications are tools your employees/colleagues use to complete a project, similar to how construction firms bill for the use of a bulldozer. If you can identify and report on how much they are being used for projects, you can plan for how much to charge on a per-hour basis for future projects. You can also recover the maintenance and support costs of existing applications, AND justify the cost of new, top-of-the-line applications.
With the cost and complexity of application licensing increasing, companies need to plan how to maximize their business processes. To perform the above profitability optimizing activities accurately, you will need to gather application use information, and associate time spent using an application to specific projects.
A modern application monitoring tool should be able to support all three planning activities by:
- Collecting and reporting accurate use data (peak licensing times, peak application use (per user), user activity levels, etc.)
- Allowing application use to be associated to projects at the file level.
Perhaps your list should start with doing a thorough review of monitoring tools.
You can start here by checking out the ENGEO case study on Cetrus Process Meter!
“Clarity: Architecture and Engineering Industry Study.” Deltek, Inc, 2017.
Hames, Phil. “Application Rationalisation Techniques.” IT Asset Knowledgebase, IAITAM, 28 Apr. 2017, itak.iaitam.org/application-rationalisation-techniques/?inf_contact_key=2ab146e7aba835f11c7796f41924b1fbe44674332bc8820901a24df0b9152f2c.