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Managing M365 licenses & economic survival in the Covid era

(Image credit: Image Credit: StockStudio / Shutterstock)

Businesses around the globe have proven resilient to the Covid-19 pandemic as they have been able to keep quarantined employees productive while acclimating to their newly remote workplace. As the world begins to take phased approaches to reopening, IT leaders are continuing to adjust their 2020 plans to coincide with freshly trimmed budgets and C-level directives. Some waste is typically considered the cost of innovation when times are good, but a non-starter when organisations must rebuild a decimated sales pipeline. This is why smart tech leaders are currently evaluating every app, process, and investment to ensure they fit into a leaner, more ROI-focused environment.

Shops that were up and running with Microsoft 365 (formerly Office 365), were already ahead of the business continuity game given that the platform was designed to be catastrophe-proof. The M365 service has physical redundancy in extra servers and multiple network cards, as well as data redundancy through replication across multiple data centres. M365 is also continuously monitored by internal Microsoft teams for performance and operations to quickly diagnoses any issues.

While it’s no secret that cloud adoption and M365 enthusiasm bodes well for overall business productivity, challenges have arisen during the massive cloud transformation we’ve recently witnessed. Unfortunately, the platform is only beneficial when properly used and the Microsoft 365 License Optimisation Report found many enterprises are struggling with M365 application adoption, which has led to unnecessary costs through poor license management. Organisations often fall into one of three traps: IT departments commonly err on the side of caution and purchase too many licenses, pay for inactive licenses instead of assigning them to new users that join the organisation, or purchase licenses that contain apps that don’t align with current employee usage.

Even though M365 runs in the cloud and is not dependent on on-premises tools and applications that can fail, inactive M365 licenses deplete budgets as companies are required to pay for users through individual licenses, whether selected users have adopted the applications available to them or not. This responsibility to track and optimise licenses falls solely on IT departments, which is an extremely difficult task and causes immense monetary pressures on businesses.

There are three primary categories of mismanaged licenses:

  • Inactive licenses: M365 licenses that were previously assigned but have not been used within a prescribed number of days.
  • Underutilised and oversized licenses: Licenses containing productivity apps that are not being used because employees either do not need them or have not been properly trained how to use them.
  • Unassigned licenses: Licenses that are available to the company but have not been given to new employees.

In fact, the Microsoft 365 License Optimisation Report also found that 44 per cent of M365 licenses are either underutilised or oversized due to the fact that employees either don’t need to use apps that are included in higher-tier licenses or they aren’t adequately trained in how to maximise their use. Whether businesses would be better served eliminating redundant licenses or training employees is up to each organisation, but the fact remains that many enterprises are driving up cloud costs simply by not paying attention to this seemingly innocuous area. If you want to truly benefit from the M365 pricing model, you must not only commit to the appropriate number of licenses needed, but also only assign licenses to legitimate, active users and properly identify the right plan for each user and your business.

How to better manage licenses

License management problems stem from a lack of visibility into enterprises’ cloud environment and not understanding the dynamic licensing needs of the organisation.

Simply put, IT departments and executives are not equipped to effectively manage licenses without a deep understanding of their workforce, each departments’ needs, and the amount and status of M365 licenses that are – or could be – made available. Having a better grasp on the environment also helps IT to do a better job at delegating access, automating administrative workflows, and partitioning license pools – all of which simplifies the management of permissions, calculation of chargebacks and audits.

Data from the report also shows that organisations are not paying enough attention to license management and, on average, could reduce M365 costs by 48 per cent by improving how they purchase and better manage inactive licenses through either eliminating or reassigning them to new users. Having this actionable view into SaaS environments enables businesses to transform a mundane task into significant cost savings and productivity boosts. 

Upskill and train employees to get M365 benefits

I touched on this earlier but deciding whether employees are fine using a basic E1 M365 license or one with more advanced capabilities is an important decision for businesses. Organisations that purchase higher tier M365 licenses must be prepared to commit to upskill and train their people to generate productivity gains from these licenses. While it will be difficult, if not impossible, to run training seminars for employees remotely, many businesses use Just-in-Time Learning (JITL) strategies to fill that gap. JITL tools and policies provide workers with answers to their technology questions within the normal workflow of the M365 workloads rather than via more formal trainings - experts found that standard training (classroom and eLearning) are not optimal and users forget 70 per cent of what they learned within 24 hours.

The next question often asked is, “how does the IT department identify the best plans and limit the number of inactive users?” Implementing technology solutions that uncover inactive, oversised and duplicated M365 licenses and can cancel or reallocate them is an important first step. While the data demonstrates there is much room for improvement when it comes to managing licenses, making these small but impactful adjustments will stop IT from overspending and help to identify teams with low application adoption.

To thrive in today’s highly competitive business climate, organisations must continue to support cloud-based apps wholeheartedly and devote more time to driving application adoption by clustering users based on service usage and behaviours. As we’ve covered, this can lead to targeted adoption and training campaigns that increase usage, while maximising companies’ M365 investment.

Michael Morrison, CEO, CoreView

Michael Morrison is the CEO of CoreView. As a growth-stage operating executive within global business analytics organizations, Morrison has led several companies through critical stages of transformation, predictable revenue growth and successful exits, delivering notable returns for public shareholders.