For many organisations, software renewals are treated as a routine admin task. In reality, they are a strategic opportunity. Managed well, renewals create opportunities to uncover cost savings, improve performance, and reduce waste. Managed poorly, they can quietly drain budgets, create long-term issues and lock you into outdated contracts.
At bedigital, we help organisations of all sizes extract value from their IT estates with independent ITAM services. Here are the five most common software renewal mistakes we see, and how you can avoid them with a smarter, data driven approach.
1. Limited visibility into actual feature usage
The mistake:
Bundled subscriptions often appear cost-effective, but are you really using all of the included features?
Many organisations continue renewing full-featured licences when only a small number of features are in use. Without accurate usage data, it is difficult to make informed decisions or optimise your licensing.
What to do:
Review usage at the feature level before each renewal. You may find that users only need a lower-tier license, or that a standalone product offers better value. In some cases, you might not need all the bundled features, but the subscription might still be the cheapest option. A proper analysis can reveal significant savings and ensure better alignment with actual needs.
2. Poor growth planning in software renewals
The mistake:
Buying licences “just in time” might seem efficient, but it can backfire. It often results in missed volume discounts or rushed last-minute purchases. On the other hand, overcommitting to hit a pricing tier can waste budget on unused licenses.
What to do:
Plan ahead by aligning your renewal and purchasing strategy with your expected growth trajectory. Collaborate with your ITAM and procurement teams to understand your licensing thresholds and timing, especially before major contract events. While larger purchases may give discounts, it’s essential to understand the true discount breakpoints so you don’t overspend just to hit a quota.
3. Unoptimised cloud environments
The mistake:
Cloud solutions offer flexibility, but it can come with unexpected costs if not carefully managed. Choosing the wrong cloud provider or mis-sizing your workloads can lead to inflated costs, underperformance and wasted resources.
What to do:
Before migrating, take the time to optimise your environment. Evaluate your actual usage patterns rather than relying on theoretical estimates and ensure your cloud infrastructure is right sized to your actual needs. Consider how each provider charges for operating systems, storage, compute power, and other services to avoid unnecessary expenses. Take advantage of automatic scaling capabilities to increase performance when needed, without over-provisioning upfront.
4. Overlooking auto-renewals
The mistake:
Many software contracts include auto-renew clauses that can easily get missed. Without proper oversight, you risk getting locked into another term with outdated pricing or unnecessary and unused features.
What to do:
Track your contracts proactively. Set reminders at least 90 days before every renewal date. This gives you time to analyse usage, review contract terms, evaluate suppliers, and renegotiate contracts if needed. Don’t let auto-renewals drain your budget or limit your flexibility.
5. Not involving the right stakeholders
The mistake:
Software renewal decisions shouldn’t be made in isolation. While procurement may manage contracts, IT teams run the systems and end users determine the software’s value.
What to do:
Engage key stakeholders early in the software renewal process. Their input ensures the software still meets current business needs, and can uncover gaps in usage, licensing, or performance that may not be obvious otherwise.
Final thoughts
Software renewals aren’t just operational tasks. They are opportunities to cut waste, reduce costs, and align IT investments with your business goals.
At bedigital, we support enterprise organisations through every stage of the software cycle, from license analysis, to renewal strategy, supplier negotiation and beyond. And as an independent, vendor neutral ITAM consultancy, we offer unbiased expert advice to help get the best deal, every single time.
See how we can support your renewal.
