Top 8 Software Asset Management Best Practices to Boost ROI

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Managing software assets without a structured approach can quickly lead to inefficiencies and compliance headaches. My Tech Decisions revealed that half of enterprises waste over 10% of their annual budget on software, SaaS, and cloud infrastructure. Without proper oversight, you might be paying for licenses you don’t use or, worse, facing costly penalties for non-compliance.

A strong SAM strategy helps you stay in control. With the best software asset management tools, you can optimize software investments and cut unnecessary costs. In this guide, you’ll discover eight essential SAM best practices that will boost your ROI. 

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TL;DR

• Enterprises lose over 10% of their IT budget due to poor software management. A structured SAM strategy reduces unnecessary costs and compliance risks.
• CloudEagle.ai automates software tracking, optimizes SaaS licenses, and prevents shadow IT, helping companies save up to 30% on software costs.
• Categorizing, recycling, and reallocating underused licenses prevents waste and improves cost efficiency.
• CloudEagle.ai simplifies contract management, benchmarks vendor pricing, and streamlines SaaS renewals to avoid surprise expenses.
• Regular software audits and AI-driven insights ensure compliance, eliminate redundancies, and improve ROI.

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1. What is Software Asset Management?

The software you use will help your company streamline operations, enhance productivity, and automate key processes. However, without proper management, software can become a financial burden rather than a strategic advantage. As Jason Owens, who leads global IT Asset Management at Salesforce, noted,

"Every company that has a SaaS footprint has a need for high-functioning SAM practitioners in their business."

With software asset management, you can track, manage, and optimize your software resources throughout their lifecycle. It helps you ensure compliance, prevent unnecessary spending, and maximize the value of your software investments. Without a structured SAM strategy, you may face issues like underutilized software and security risks. 

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2. Top Software Asset Management Best Practices

A. Know Your Software Asset Management Policy

If you don’t have a clear policy for managing software assets, you risk overspending. A well-defined SAM policy will help you track and optimize software while ensuring you stay within licensing agreements and regulatory requirements.

To build an effective SAM strategy, start by defining what success looks like for your company. Are you trying to cut unnecessary software costs or improve vendor negotiations? Clear objectives will ensure your policy supports your enterprise’s goals. 

However, software asset management practices aren’t just an IT concern. Procurement, legal, finance, and other departments all play a role in software management, from negotiating contracts to ensuring compliance. Bringing these stakeholders together during the policy creation process helps close any gaps that could lead to financial or legal risks.

For instance, NASA faced challenges due to the absence of a comprehensive software asset management policy. An audit revealed that the agency lacked an Agency-wide approach to manage its software assets, leading to increased risks and potential financial inefficiencies.

B. Pick a Professional and Reliable ITAM Platform

Relying on outdated solutions to manage your software assets can hinder your ability to generate real-time reports and gain meaningful insights. To streamline your software asset management process, you should use modern ITAM platforms. 

With numerous applications available in the market, selecting the right SAM tool requires careful consideration of your business needs. Moreover, You also need to determine how the tool will assist your IT team in managing applications effectively. 

When choosing the platforms, consider factors such as ease of integration with existing systems, scalability to accommodate business growth, user-friendly interfaces, etc. You can also involve key stakeholders in the decision-making process for the best software asset management practices. 

As Michael Gerber, author of The E-Myth Revisited, advises, 

"Organize around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems." 

This perspective showcases the importance of implementing robust systems to manage software assets effectively.​

C. License Categorization to Analyze Usage

Effectively managing your software assets requires a clear understanding of the licenses your company holds and how they're utilized. By categorizing licenses and analyzing their usage, you can optimize costs and enhance operational efficiency. Here are some key steps for license categorization and usage analysis:

• Organize by vendor, version, or usage rights.
• Maintain a clear inventory of all software assets.
• Prevent over-purchasing or under-utilization, leading to cost savings.
• Track how and when software is used within your company.
• Identify patterns that reveal underused licenses.
• Pinpoint areas where additional licenses may be needed.

D. Recycle and Optimize SaaS Licenses

Effective software asset management practices are crucial for optimizing costs and enhancing operational efficiency. When employees leave, their software licenses often remain unused. Reassigning these licenses to active users prevents unnecessary purchases and reduces software expenses.

Moreover, regular audits of software usage can uncover applications that are seldom or never utilized. Analyzing these patterns will help you reallocate or discontinue underused licenses, ensuring your organization pays only for necessary resources. Forbes revealed that organizations can achieve as much as 30% savings in annual software costs by managing licenses effectively.

For applications operating on a network license model, analyzing usage data helps determine the optimal number of licenses required. This way, you can balance user needs with licensing costs more effectively.

E. Implement Relevant Procurement Policies

At this stage, your organization is ready to put software procurement policies in place. Since you've already identified where policies are needed and who should be involved, the next step is to establish clear guidelines.

Here are two key policies to focus on:

• Vendor Lifecycle Management: This policy helps you manage vendor relationships from start to finish. It ensures you get consistent performance and value from every vendor.
• SaaS Renewal Strategies: Automating renewals reduces manual work and prevents missed deadlines, helping you stay on top of software updates.

According to Fortune Business Insights, the global procurement software market is projected to grow from $8.03 billion in 2024 to $18.28 billion by 2032, highlighting the increasing importance of effective procurement policies

Having these policies in place keeps your software investments under control. You can quickly identify when a tool is no longer useful, preventing unnecessary costs. Plus, staying compliant with licensing agreements helps you avoid expensive audits.

F. Create a Software Budget

A strong software asset management strategy helps you stay in control of your software budget as your business grows. By following best software asset management practices, you can forecast expenses more accurately and avoid wasting money on unused tools.  

Many companies lose money on SaaS subscriptions they don’t fully utilize. But with a structured SAM process, it’s easier to spot inefficiencies and take action. You can:  

• Reallocate underused licenses to teams that need them.  
• Cancel subscriptions that no longer add value.  

Regularly analyzing software usage helps you plan for future needs. Instead of guessing, you’ll make informed budget decisions based on actual data. This ensures your spending aligns with business goals and prevents unnecessary costs.  

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Another major benefit? Strong software asset management practices give you an advantage in vendor negotiations. When you have clear insights into usage and needs, you can secure better pricing and terms, making your software investments more cost-effective.

G. Conduct Regular Software Audits

Regular software audits are a key part of managing your software assets efficiently. They help you stay compliant, reduce waste, and optimize your IT budget.  

By auditing your software regularly, you can:  

• Keep an Accurate Inventory: Know which licenses are in use, underused, or no longer needed. This prevents unnecessary spending.  
• Ensure Compliance: Staying within licensing agreements protects you from legal risks and unexpected fines.  
• Improve Budgeting: Tracking software usage helps you forecast future needs and avoid over-purchasing.  
• Find Inefficiencies: Audits highlight areas where software deployment can be improved, leading to better productivity.  

A proactive audit process also ensures your company is always prepared for external reviews, saving time and reducing stress. As a result, your software asset management practices will start showing results sooner. 

H. Monitor Continuously

​Implementing continuous monitoring of your software asset management is vital for maintaining a secure and efficient IT environment. By consistently tracking software usage and license compliance, you can swiftly detect unauthorized installations, underutilized applications, and potential security vulnerabilities. As Andy Grove, former CEO of Intel, emphasized, 

"Measurement against a standard makes you think through WHY the results were what they were."

Leveraging automated tools for real-time monitoring enhances accuracy and efficiency, providing a comprehensive view of your software landscape. Regular audits by these tools support informed decision-making regarding software procurement and retirement.

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3. Using CloudEagle.ai for Automated Software Asset Management

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CloudEagle.ai is a SaaS management and procurement platform designed to streamline software asset management. It simplifies the complexities of handling SaaS applications, making it a valuable solution for your business.  

The platform offers comprehensive visibility, control, and cost-saving features, enabling you to make informed decisions that align with your strategic objectives. It consolidates all your software assets, licenses, and usage data in one easily accessible place.  

With automated workflows, you can optimize procurement, prevent unnecessary renewals, and reclaim unused licenses efficiently.

Application Discovery

CloudEagle.ai provides full visibility into your SaaS portfolio within just 30 minutes, allowing you to identify and eliminate duplicate or redundant applications that may be inflating costs.  

By centralizing all software assets in one platform, it simplifies app management. Direct API integrations offer detailed usage insights, helping you remove unnecessary apps and merge duplicates for a more efficient tech stack.  

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You can also configure proactive alerts to detect unsanctioned software purchases made with company credit cards, reducing the risk of shadow IT. Additionally, the platform prevents unauthorized apps from transitioning into paid subscriptions, enhancing security and control over your software ecosystem.

For example, a major media company with 10,000+ employees struggled to manage its expanding SaaS portfolio using Flexera. Inaccurate data and lack of feature-level insights made optimization difficult, causing inefficiencies and excess costs.

With CloudEagle.ai, the company gained full visibility into its SaaS stack, optimizing licenses and reducing unnecessary costs. The platform helped cut 200 JIRA licenses to 80 and downgrade Zoom users to free plans, while AI-driven contract management streamlined renewals and improved vendor negotiations.

License Management

CloudEagle.ai provides detailed feature-level usage insights for every software asset through direct integrations or Excel uploads. From a single, centralized dashboard, you can track license types, monitor assigned and active users, review login activity, and analyze spending for each license.  

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Usage-based alerts help you optimize software assets by identifying when upgrades or downgrades are necessary. Additionally, app admins can audit licenses and deprovision users to maintain efficient and streamlined software asset management.

Contract Management

CloudEagle.ai streamlines contract management by centralizing all vendor contracts in one platform. It eliminates the hassle of last-minute renewals by automatically initiating renewal workflows up to 90 days in advance and assigning them to the right stakeholders. You'll also receive timely Slack and email reminders to keep renewals on track.  

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With a unified dashboard, you can instantly access spending details, while CloudEagle.ai’s AI extracts key contract metadata, such as renewal dates, billing frequency, payment terms, and auto-renewals, providing complete visibility in minutes.  

The platform integrates seamlessly with contract repositories like DocuSign, Workday, Ironclad, Google Drive, Dropbox, and Box. You can import software assets from multiple sources, allowing the AI engine to organize and extract metadata for a comprehensive contract overview.  

Additionally, CloudEagle.ai helps reclaim unused licenses automatically. With 500+ integrations, it delivers precise usage data and alerts you when licenses should be downgraded, ensuring you optimize costs and eliminate underutilized features effectively.

Spend Optimization

As your enterprise grows, you may accumulate duplicate or unused software assets, resulting in unnecessary SaaS costs and potential sprawl.  

CloudEagle.ai gives you full visibility into your SaaS portfolio with detailed usage insights, helping you identify and eliminate underutilized apps, detect redundant subscriptions, and optimize overall spending efficiently.

Price Benchmarking

CloudEagle.ai provides unbiased price benchmarks from over 1 billion transactions, allowing you to compare your pricing with industry peers. With a database of 150,000+ vendors, you gain valuable insights into market rates.  

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Using AI and machine learning, CloudEagle.ai evaluates multiple pricing options, helping you assess whether your costs align with industry benchmarks based on company size, IT asset volume, contract terms, and average license costs.

Renewal Management 

CloudEagle.ai’s automated renewal management helps you avoid last-minute contract surprises by initiating renewal workflows up to 90 days in advance, ensuring timely approvals from key stakeholders.  

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Dedicated communication channels simplify the approval process, enabling teams to submit requests, approve workflows, and share feedback seamlessly. You can also track opt-out deadlines 30, 60, or 90 days ahead, giving you enough time to decide whether to renew or consider alternative vendors.

Vendor Research

Skip the tedious software research with CloudEagle.ai’s AI-powered vendor discovery. Just enter your requirements, and the platform will generate a curated list of SaaS vendors that match your needs.  

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All vendor reviews, including detailed pros and cons, are centralized in one place, eliminating the need to browse multiple websites. You can also compare vendors side by side, making it easier to make well-informed decisions.

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4. Conclusion

Implementing best software asset management practices is crucial for IT managers looking to optimize software investments and maintain efficient operations. A well-structured SAM strategy not only reduces costs but also ensures compliance and better control over software assets.

With CloudEagle.ai, you can eliminate unnecessary expenses, reduce downtime, and focus on strategic goals instead of repetitive tasks.  

Its affordability and cost efficiency make it a great fit for businesses of all sizes. Even startups and SMEs can leverage enterprise-grade IT asset management without stretching their budgets. So, schedule a demo with the experts today. 

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5. Frequently Asked Questions

1. What are the 3 main asset management types?

The three main types of asset management are physical asset management (managing tangible assets like equipment and infrastructure), financial asset management (handling investments, stocks, and funds), and digital asset management (organizing and optimizing digital resources like software and data).

2. What are the types of asset management in ITIL 4?

In ITIL 4, asset management includes hardware asset management (HAM) for physical devices, software asset management (SAM) for licenses and compliance, cloud asset management for cloud resources, digital asset management (DAM) for digital files, and service asset and configuration management (SACM) for tracking IT assets and relationships.

3. What is the software asset management process?

The software asset management (SAM) process includes inventorying software, tracking licenses, monitoring usage, managing procurement, ensuring compliance, and optimizing costs. A well-structured SAM strategy helps reduce risks, control spending, and improve efficiency.

4. What is the IT asset management approach?

The IT asset management (ITAM) approach involves tracking, managing, and optimizing IT assets throughout their lifecycle to reduce costs and improve efficiency. It includes asset discovery, procurement, usage monitoring, maintenance, and disposal while ensuring compliance and security.

5. What are the 5 P's of asset management?

The 5 P’s of asset management are People, Processes, Policies, Performance, and Planning. People manage assets, processes ensure efficiency, policies provide governance, performance tracks asset value, and planning aligns asset management with business goals.

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