Small and medium enterprises (SMEs), also referred to as small and medium businesses (SMBs), play a significant role in the 21st-century economy. According to World Bank data, SMEs constitute 90% of global businesses and 50% of global employment. Today, formal SMEs are responsible for up to 40% of GDP in emerging economies.
However, just like large enterprises, SMEs also face major challenges when it comes to proper utilization of software licenses. Here are the typical reasons that contribute to these challenges:
- Lack of awareness: Many SMEs are driven by individual owners or CEOs who have limited knowledge regarding the existence of license management and asset management software and the value it brings.
- High subscription cost leading to shadow IT: Often, the upfront cost of software licenses may seem too much to invest. To save that, resorting to shadow IT is a common practice across SMBs. It includes using unlicensed software or licensed software with unofficial credentials and can lead to hefty fines. In a 2023 study by Capterra, 76% of SMEs mentioned shadow IT as a moderate to severe cybersecurity threat.
- Lack of bandwidth: Installing and implementing an asset management solution can be considered an additional headache by organizations, as SMEs may not have a dedicated IT manager or relevant resource person.
Additional Read: The ascending intelligence: How AI is revolutionizing IT asset management
Boons of smart license management: 5 benefits SMEs can leverage
Apparently, license management is not an essential investment in a small business. However, implementing a robust license management solution offers a multitude of advantages tailored to the specific needs and constraints of SMEs.
- Cost optimization: By gaining complete visibility into their software assets, SMEs can identify underutilized licenses and reclaim them, avoiding unnecessary renewal costs. Smart license management also helps prevent over-licensing by providing accurate usage data, ensuring businesses only pay for what they actually need. Furthermore, it drastically reduces the risk of non-compliance fines associated with using unlicensed software, a significant financial burden that SMEs can ill afford.
- Enhanced security: As highlighted by the Capterra study, shadow IT poses a serious security risk. License management solutions help eliminate this by providing a clear picture of all software in use, allowing IT administrators (even if it’s a part-time role) to identify and remove unauthorized or potentially malicious applications. This strengthens the overall security posture of the SME and protects sensitive data.
- Improved efficiency and productivity: Knowing exactly which software is available and who is using it streamlines software deployment and access. Employees can quickly get the tools they need, reducing downtime and boosting productivity. Centralized license management also simplifies audits and reporting, freeing up valuable time for other critical business activities.
- Better budgeting and forecasting: With detailed insights into software usage and expenditure, SMEs can make more informed decisions about future software investments. License management solutions provide data on renewal cycles and potential upgrade costs, enabling better budgeting and financial forecasting.
- Scalability and flexibility: As SMEs grow, their software needs evolve. A smart license management system provides the flexibility to easily scale software licenses up or down based on changing requirements. This ensures that the business always has the necessary tools without incurring unnecessary costs during periods of lower demand.
While the initial challenges of awareness, perceived cost, and bandwidth might seem daunting, the long-term benefits of implementing a license management solution are undeniable for SMEs. By embracing these tools, small and medium businesses can move beyond the pitfalls of inefficient software utilization, mitigate security risks, optimize costs, and ultimately position themselves for sustainable growth and success in today’s competitive landscape.
Additional Read: Reducing Your Organization’s Carbon Footprint with Smart SAM
Frequently Asked Questions (FAQs)
Is license management software only for large companies?
Absolutely not! While large enterprises benefit significantly, SMEs often see a more immediate and proportionally greater impact due to tighter budgets and resource constraints. License management helps SMEs avoid costly non-compliance fees and optimize their limited software spending.
We are a small team; is implementing a license management solution complicated?
Many modern license management solutions are designed with user-friendliness in mind and offer simplified implementation processes. Some are even cloud-based, minimizing the need for extensive IT infrastructure or dedicated personnel. The long-term time and cost savings often outweigh the initial setup effort.
How much money can an SME actually save with license management?
The savings depend on various factors like the number of licenses, the cost of the software, and the extent of previous mismanagement. However, SMEs can typically expect to save significantly by eliminating unused licenses, preventing over-purchasing, and avoiding non-compliance penalties – often amounting to thousands of dollars annually.
What if we don’t have a dedicated IT person? Can we still use license management software?
Yes, many license management solutions are designed to be intuitive and can be managed by individuals with basic technical skills. Some vendors also offer excellent customer support and resources to guide you through the setup and ongoing management.
Will license management disrupt our current workflow?
A well-implemented license management solution should actually streamline your workflow. By providing better visibility and control over software access, it reduces delays and ensures that employees have the right tools when they need them, ultimately boosting productivity.
