M365 True-Up- Top Challenges

  • Visibility to total license counts, usage, and costs by department and/or by license type
  • Delegation of license management to departments/business units with easy to maintain cost controls
  • Operationalize a reclamation process across all departments
  • Reactive process to prepare for annual True-Up process

Tips for Success in Proactive License Management

  1. Create License Reports to show counts, usage, inactive, unused, duplicate, and oversized licenses
  2. Convert reports to KPIs
  3. Build a custom dashboard and add KPIs and reports to the dashboard
  4. Customize reports and/ or dashboard KPIs as needed for each department or business unit
  5. Develop a policy and procedure 6. for departments/business units to review their dashboard and reports to reclaim licenses prior to requesting any new licenses
  6. Add accurate license costs to the License Subscription report
  7. Review License Subscription report to managing costs within budget and with reconciling to Finance billing report for each department

Expert Microsoft Negotiation Analysis

Experts agree that a detailed analysis of licensing needs should be part of the True-Up or EA renewal negotiation process. “To minimize TCO and maximize usage rights, companies need to take preparatory steps in the months leading up to every purchase or renewal,” explains NIP in its bulletin How to Knock Your Microsoft Office 365 Purchase or Renewal Out of the Park. “When purchasing or renewing, there are a variety of important choices to be made that have a major impact on cost. In some cases, customers know about them – and are confused. In other cases, customers are not even aware of their options. As companies migrate to M365, there are steps they can take to protect themselves from costly surprises and optimize TCO – during both initial migration and in the months leading up to an EA renewal. Striking the right balance of cost and flexibility requires a full understanding of the options, license scenario cost modeling, and license scenario cost/benefit analysis.”

Rick Gibbons, a licensing analyst for the ITAM Review, agrees that Microsoft 365 licensing is not always understood by those that pay those bills. “The cloud has made it more difficult to be under-licensed, but the issue people are looking at is over-licensing,” Gibbons told Computer Weekly in their piece Top Tips to Avoid a Costly Microsoft Office 365 Subscription Bill.

Sometimes even the lowest level licenses are a perfect fit. “E1 doesn’t install locally, while E3 does,” he said. “People feel they need E3 and buy for 7,000 people, but probably only 40% of the workforce needs it. Some staff just need Exchange, and don’t require SharePoint.” Tracking ongoing usage is critical. “The onus is on the organization to understand the roles of employees in the business and the tools they need to do their jobs,” said Gibbons.

Prepare for Your Microsoft Annual True-Up (and EA Renewal) – 14 Cost Saving Tips

True-Up and Enterprise Agreement (EA) renegotiation can be a tense time. There is a lot of money at stake. Microsoft likely grasps the ins and outs of licensing far better than you do, yet neither side truly knows how many licenses are used, and whether these licenses are the right size.

There is good news, however. Significant cost savings come from identifying unassigned or inactive licenses and reducing these costs through carefully curated license management, license redeployment, re-harvesting, and the re-assignment of inactive licenses. If you do so, you will have far fewer or even no wasted licenses.

One large enterprise, – okay very large – identified $14 million in potential annual savings through the CoreView Microsoft 365 Health Check. That enterprise used CoreView’s deep license analytics to renegotiate its EA deal – much to company executives delight!

Step One – Open Your Eyes to Visibility

CoreView customers find that visibility is one of their top issues – which means seeing license counts, usage, and costs. Finance departments, for instance, send out bills – a chargeback to each of the departments or business units. Unfortunately, these departments can’t reconcile or see what they’re being billed for and why.

Step Two – Avoid Surprises

Without visibility, these over-licensing issues only arise during the annual Microsoft True-Up process. So what exactly is a True-Up? “The EA enrollment has a three-year term, with the option to be renewed after each cycle. As part of the EA, your company is required to perform an annual True-up inventory to identify the number of qualified desktops and users, servers, CPUs, computers, and other devices running Microsoft software, and take into account any licenses that may have been added during the previous 12 months. This inventory is required at the end of each of the three years of the agreement,” Microsoft explained.

During this True-Up inventory process, departments, business units, and even the entire enterprise are commonly surprised – sometimes shocked – to see the costs they are facing, wondering how license counts have risen so high.

It is only then the enterprise realizes they don’t have visibility to reclaim licenses that aren’t being utilized, whether they’re unused, inactive, duplicate, or perhaps disabled. They never knew they had assigned licenses hanging around they could reclaim rather than putting requests into buying more licenses.

Step Three – Embrace Licensing Best Practices

You can eliminate licensing blind spots and dramatically alter the licensing end game. You do that by operationalizing a best practice around reclaiming licenses before ordering new ones, and being more proactive in preparing for your True-Ups and EA renewals.

Unfortunately, many enterprises are stuck in reactive mode – taking action only when a crisis such as not being prepared for a True-Up arises. Some larger shops have a uniform set of E3 or E5 licenses with little or no variance, while others have complex matrix license agreements with Microsoft. Either way, if the provisioning and management is not going through the central IT which has PowerShell experts creating reports for the business units detailing user activity and usage, then all these licenses represent a big black costly hole.

Step Four – Forget the Easy (and Expensive) Way Out

Too many companies, concerned with keeping business moving smoothly, simply buy and add licenses as they THINK they need – just to make sure that everybody in their teams are covered.

Understanding license usages, in normal circumstances, is a very manual process. Without a solution such as CoreView, business line managers must ask central IT and their PowerShell gurus to create custom usage reports. No wonder True-Ups come with such surprises – like large unforeseen cost increases. These increases happen because the enterprise is not credited for all the unused licenses since the organization (nor Microsoft) doesn’t know they exist.

Step Five – the Proactive Approach is the Smart Way to Go

By being proactive, IT doesn’t carry unused or unassigned licenses, or pay for expensive licenses when cheaper ones suffice. Fortunately, CoreView has been working with customers on proactive best practices and processes that utilize auto provisioning, and deep license provisioning, best practices, and processes. This involves creating workflows and automating license management as much as possible.

IT should create standards for assigning appropriate licenses for particular business units, and give those units the ability to evaluate their user activities around usage as well as discovering inactive, unused, duplicate, oversized, and disabled licenses. Best practice is to have new standards, policies, and procedures for license management. These are supported by using CoreView to easily reclaim those licenses. That way, you stay within your budget as much as possible.

The only time you should request additional licenses is if there are no licenses to reclaim within your organization or what you’ve been assigned. You can only follow this practice if you know what you have and how it is used.

With CoreView you look at a simple license report dashboard to get the latest cost and usage data. Meanwhile, IT can schedule alerts to update IT and line of business managers weekly and monthly so they can stay within budget. There’s no surprises each month or quarter, especially as they prepare for True-Ups or EA renewals.

Step Six – Get Detailed, Actionable License Reports

The key to understanding M365 economics is through license reports showing the exact counts and precise usage. This should include inactive, unused, duplicate, and disabled licenses – along with the license levels such as E1, E3, E5, etc. You can convert those reports and findings into KPIs and build custom licensing dashboards.

These KPIs are in essence your reporting tool, and the resulting reports can be scheduled on a regular basis or whatever cadence the organization prefers. This way it is a much easier push rather than a pull. You can customize these for each department, each business unit, whatever works best.

Many customers have central IT develop license policies and procedures for their organization, as well as within the business units, for reclaiming licenses prior to requesting any new ones. With good procedures in place, departments no longer send license requests to the help desk – instead, follow the established licensing best practice process.

As a result, IT controls costs through reporting with accurate and detailed license costs. Each business unit sees cost and use details within their own unit – and the opportunity costs. That way units can start reclaiming and controlling those costs and stay well within the budget. Units can also align to whatever finance might be sending them as an allocation or cost to that business unit

Step Seven – Create and Leverage KPIs

We already talked about taking licensing reports, creating KPIs off of them, tying them into a dashboard, and giving you the ability to have a view into your licensing.

This means you control the metrics by which you measure license cost efficiency. You can break up the individual KPIs by categories to quickly distinguish the data that you want to see as well as directly going into the individual license details. All this data is quickly and easily available – and surfaced right in the licensing reports.

Step Eight – Track Consumption

Most finance and M365 professionals have no idea what licenses are being used, and how many of the apps and services are actually consumed – and to what degree. Here is where the consumption dashboard comes in which includes all this detail – as well as the costs. IT and department heads can see inactive and active user counts, then drill down into any department or user set to find out exactly who is using what — and what that activity has been.

Take Exchange. IT could find out who is not using Exchange across the company or a department. To take action on this data or have insight into that inactivity moving forward, you can save this filter as a KPI, and create a dashboard.

Step Nine – Take Remediation Action

Knowing you have a license problem and doing something about it are two different things. With CoreView, you can launch remediation tasks – such as delicensing people that have never used an application or their license. IT or managers can invoke a workflow to automate that license removal process.

Step Ten – Jump Into License Pools

Most M365-based enterprises have licenses in one big jumble. A better idea is to segment licenses – and license management – through pools. Once organized this way, management can examine – and tightly control – license pool costs including price per user. This way, you ensure accurate pricing is entered into the system from the beginning.

Costs can be filtered by departments, domain – or whatever way you want to slice it. You can see all the SKUs, the total costs, and how much loss is involved.

Step Eleven – Look Deep Into Dashboards

Not all people managing licenses are IT pros. That’s why dashboards are such a nice way to keep all the details in one easy to read place. We recommend looking at the dashboard weekly if you are looking to add more licenses – but at a minimum on a monthly basis to make sure groups are utilizing the licenses they have as proactively as possible. With the dashboard, managers can easily determine any change they might want to make at True-Up time – such as downgrading licenses or changing the license types to lower overall cost.

Step Twelve – Arm Yourself with Data

An accurate and detailed license analysis is a critical basis of any EA negotiation. “Heading to negotiations with the right information is a key factor in the success of any negotiation. Having current licenses, hardware, and software information gathered in advance, and having it organized in an accessible way is a critical step,” said Emerset Consulting Group in its article Top 10 Mistakes to Avoid When Negotiating with Microsoft. “When you show up to the negotiation table, having this information meticulously organized in advance helps you know where you want to go with future technology and licensing, and puts you in the leadership role vis a vis Microsoft. If the Microsoft representatives sense that you did not prepare properly, they may challenge you on your claims and demands, putting you at a disadvantage and possibly costing you valuable negotiation leverage.”

Step Thirteen – Combine RBAC and License Management

When an enterprise has global administrators managing sometimes many thousands of licenses, a lot can fall through the cracks. One solution is to designate a local, group, or departmental administrators to keep an eye on licenses. This Role-Based Access Control (RBAC) approach implements local operators, combined process and workflow automation, close and careful license management, and produces deep savings and total license optimization.

Step Fourteen – Actively Upgrade or Downgrade Licenses

License optimization is not just about getting rid of unneeded licenses, or downgrading to only pay for the license levels you need. In many cases, a license, say an E3 or E5 is not fully used – but should be. Here you can train those users to fully utilize paid for applications, and thus dramatically boost productivity. By the same token, you may identify low-level licenses, especially E1s that should be upgraded so the users can more fully contribute to the financial health of your organization.