How to Avoid Overpaying for Software

Do you often renew software agreements without reviewing the contract terms?

It’s a common practice in the industry. When a software renewal comes across your desk, you sign it and pay the invoice because it’s an established vendor with a long history with the company.

Not to mention that extra step of checking the contract and reviewing your usage can often take days or weeks. By then the invoice would be overdue.

So you pay it in good faith.

But are you sure you're using all the licenses you're paying for? Do you know if you're using the software at all? And are you paying the right amount for it?

We once recovered $60,000 in overpaid fees from a supplier who was increasing fees beyond the negotiated amount for years. And that's just the tip of the iceberg.

In today’s video, we’ll look at how a streamlined contract management process can give you more visibility into your contracts at renewal time.

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Video Transcript

So we know it’s not always easy to find a contract - and even when you do, you have to spend time figuring out what it says.

And that time you spend can cost you - not just in compliance, but also in renewals. Organizations spend millions of dollars a year in unnecessary renewal fees.

Why? Because they’re unprepared.

They don’t have easy visibility into their contracts so they just pay the invoices, sometimes for things they’re not even using anymore.

We were doing some consulting work for a client who was using accounting software that had been running on their servers for years.

But just a year into their contract, the same supplier released an online SaaS version of the same software which was much easier to use, so the finance department signed up for the subscription, but they didn’t tell IT.

Unfortunately, when the annual maintenance invoice for the server-based version of the software would come in, it would just get paid, even though no one was using it.

Why? Because nobody was getting a heads-up that a renewal was coming so they didn’t have the chance to see if anyone was even using the software

And I know many of you are nodding your heads right now because we’ve all been through this.

The other area where organizations lose a ton of money when it comes to renewals is in annual increases

When I managed IT procurement departments, one of my mandates was that every contract we negotiated must have a cap on annual increases.

The starting position was no increase. If the supplier pushed back, we would put a cap on the increases that was tied to some measurable index like CPI, which usually hovers around 2.5%-3%

Unfortunately, those contracts would get signed and filed away somewhere and the supplier would try then sneak in additional increases, sometimes the very same year.

Last year my team recovered $60K in excess fees paid by one of our clients to one supplier over the course of 5 years, despite having clear language in their contract that capped their annual increases.

That client now manages their contracts in OneView, and they get alerts 30, 60, or 90 days before a renewal is due.

So they have plenty of time to review whether or not that product is even being used and what the renewal fee should be.

It’s an obvious and easy fix, but I’m astounded by how many organizations chose to learn their lessons the hard way.

That’s it for this video. In the next video, we’ll look at how to decrease the cost of software licenses.

And if you’d like to skip ahead and get access to all of these videos right away just go to

Also, if you’d like a free contract management process review, where we’ll show you how you can decrease the amount time you spend on contract management by up to 75%, just head over to and claim your free session.

Thanks for watching.