Software Monetization Featured Article

Software Monetization: Getting the Technology+People+Process=Performance Process Right the First Time Around

August 11, 2016

The Holy Grail of any organization is to perform optimally in all aspects of one’s business.  It raises the question, “what goes into performance optimization?” 

A formula popularized is Technology+People+Process equals PerformanceThe challenge is that while the formula appears to be simple, getting it right is not easy, especially in a world where the only constant is  change and the speed of change is  accelerating all the time.  This formula involves such things as what steps to take, in what order, by whom, when, where, why and how. It is complicated and hard work.  It also must be part of an organization’s DNA. The reason is that all stakeholders must be onboard from the start.  There is a requirement for continuous fine-tuning to adjust to changing needs. Optimal performance results only if there is a culture that believes accommodating change is the true path to sustainable success. 

This need to get the equation right is particularly critical when it comes to the increasingly vital business   process of software licensing, an aspect of software monetization.  As the world becomes more software-centric, software publishers and hardware vendors need a clear plan for the critical role of licensing in optimizing their operational, customer experience and financial performance, all of which are tightly coupled. 

In this context, the tendency to overlook the “process” can be a major obstacle to achieving an organization’s business goals. I found this very informative infographic, Get Licensing Right the First Time: Treat Licencing like your business depends on it, from Gemalto.  This infographic can serve as a guide for companies who are striving to get the technology, people and process aligned with their licensing strategy.

The infographic begins with a quote from Jeffery Immelt, CEO, at General Electric:  “The notion that there is a huge difference between the industrial world and the software world is no longer valid…those days are over.  In today’s world, everything is software.”  And with that the infographic sets the stage for the “mission critical” role of software in business today.  Specifically, the infographic states that for hardware vendors who adopt a software-driven model-, profit margins can be two to five times greater than those who remain as a hardware business.  

If you are transforming to a software-driven business, then this infographic will provide you with enough information to treat licensing not only as mission critical but also as a business opportunity.  In short, the implementation of a high performance software licensing project needs to be properly planned and executed.

The importance of thinking through the licensing strategy and the impact on the business process is just as important as the technical aspects of how the licensing technology will be integrated with the software product.  

Based on Gemalto’s experience working with many ISV teams, they recognize that working with a trusted partner is vital in building a licensing team.   “What we find out, and what these teams find out about themselves is that they have more of a process problem than they do a technical problem…Moreover, they find that the technical problem is fairly easy to solve and then they realize that they have an integration problem – business integration and focusing on technology alone puts these teams in a bad spot” says David DiMillo, principal consultant, Software Rights Management, Gemalto (News - Alert).

The top four tips that Dave gave us for a successful licensing project are:

  1. Assign a licensing owner
  2. Establish a cross-functional licensing team
  3. Conduct regular license reviews and planning sessions
  4. Look beyond the technology to business integration when approaching licensing

The bottom line is that in every business, pricing and delivery models are evolving when it comes to software delivery and consumption.  It is why taking the time to align license enforcement with business processes, and having a team approach for extracting the real value of software monetization solution, make licensing no longer a set-it-and-forget-it function.  Indeed, following the advice to, “build out your strategy and vision before jumping into the technology part of the equation,” is the first step for optimizing performance.  And, the framework in the white paper provides practical and valuable advice on how to structure a software monetization project that gets it right the first time.  

Edited by Alicia Young